There are currently three states that have regulated online gambling: New Jersey, Delaware, and Nevada. In 2013, these were the first states to in the country to legalize online gambling with the hope of gaining a substantial revenue. One year later the actual revenues, which were reported for fiscal year 2014, are not what was expected from the states representatives. In fact, the revenues fall far below the original expectations.
New Jersey has regulated online gambling with the hope of making a generous revenue. However, the expected revenue turned out to be far lower than anticipated. The first projections had New Jersey making more than $12 million within the first several months of online gambling, and the numbers are nowhere near this figure.
The governor of New Jersey, Chris Christie, predicted the online gambling revenue would boost the state’s economy by $180 million in 2014. At the end of May, New Jersey had gained $9.3 million dollars in online gambling revenue, which was one month before the end of the fiscal year. The inaccurate prediction from Governor Christie is because he made predictions too soon, according to financial analysts. However, state officials blamed the slow revenue for payment issues, and technology problems and glitches. For whatever reason, the turnout is far below what was originally expected by government officials.
State officials in Delaware reported a revenue below New Jersey’s in fiscal year 2014. The state officials had projected an additional $7.5 million in revenue in fiscal year 2014; however, state officials reported the state only gained $1.2 million in revenue. Delaware’s state finance secretary, Tom Cook, stated after vendor fees and additional costs the state only profited $318,000. Delaware also collets the first $3.75 million of revenue for each year, which is a concern because such a high amount could cause casinos to market in New Jersey or Nevada.
Although revenue figures for fiscal year 2015 do not appear much better than the previous year, state officials remain hopeful that revenues will increase. There has been a steady increase in revenue in April and May, and many of the technological bugs that caused problems are close to being fixed. There has also been an agreement between Delaware and Nevada, which will allow additional revenue by allowing the two states to share virtual poker player pools. The Interstate Pact Agreement enables individuals in each state to play poker against one another, and this was the first interstate gaming agreement in the United States. State officials report they are working diligently to boost online gambling revenue.
Nevada did not make online gambling revenue predictions for fiscal year 2014. The state only regulated online poker, and there are currently three regulated poker sites in the state. The reported revenue in April 2014, decreased by 14.5% from revenue in March. However, during May revenue increased by 8.84%. Two of the poker sites, Real Gaming and Ultimate Poker, made over $1 million in revenue during June. The increase of revenue could be because of the World Series of Poker, which is held every summer in Nevada.
The online poker revenue for Nevada is also expected to increase due to their Interstate Pact Agreement with Delaware to share an online poker player pool. The Gaming Control Board approved a multi-operator poker player network, which enables the two states to share online poker player pools. The Interstate Pact Agreement is a way for Nevada and Delaware to increase revenue and growth in the online gambling market.
Online Gambling in Other States
There have been several states to introduce bills that will legalize or prohibit online gambling, such as California, Mississippi, and New York. However, the bill to legalize online gambling in Mississippi did not make it past the government committee. Pennsylvania recently presented a bill to legislation that will prevent online gambling in the state. There was also a bill that was introduced in Washington that will reduce the penalties for individuals caught gambling online. Colorado recently passed a law that prohibits the sale of lottery tickets online, and a law allowing online gambling in Florida did not make it past government committee.
Does online gambling have a future? According to financial analysts, it is still too early to say if revenues will increase and how many new states will legalize online gambling. State officials from Delaware and Nevada remain hopeful, and they continue to work to boost online gambling revenue. Only time will tell if online gambling will be a profitable resource for the states that have made it legal.