Study says iGaming is bad for New Jersey’s economy

Posted on: January 5, 2024, 2:34 am.

Last updated on: January 5, 2024, 2:57 am.

Online gambling has had an overall negative impact on New Jersey’s economy, according to a new study.

New Jersey, Online Gaming, Atlantic City
New Jersey’s gambling industry reached its 2016 peak in 2022 with the help of the online gambling sector. But a new report suggests this may be a mirage. (Picture:

The NERA Economic Consulting research concluded that the state would be about $180 million worse off in 2022 than it would have been if online gambling had never been legalized. However, not everyone accepts the methodology.

2022 was a banner year for New Jersey’s gaming industry, as total revenue of $5.2 billion matched the state’s all-time high set in 2006.

That was just before the explosion of casino gambling in neighboring states, particularly Pennsylvania, destroyed Atlantic City’s hegemony on the East Coast. The economic downturn in 2008 and the recession that followed led to the closure of a quarter of the city’s casinos.

This time, nearly half of the state’s gross gaming revenue – $2.4 billion – was generated by its online gaming sector, which was founded just over a decade ago.

“Success is an illusion”

The new report commissioned by the Campaign for Fairer Gambling finds this success illusory. If New Jersey’s online gamblers had funneled $2.4 billion into other economic activities such as retail or restaurants, more of that money would have flowed back to the state’s residents in the form of wages.

According to NERA, online gambling employees in New Jersey received $110 million in 2022, generating an estimated $22 million in new spending across the state’s economy.

But if the $2.4 billion had been spent on other economic activities rather than online gambling, it would have resulted in about $1 billion in additional wages, resulting in $200 million in new spending, according to the report -dollars would have led.

While online gambling in New Jersey brought $385 million to the state coffers in 2022, NERA calculated that the social costs of increasing gambling addiction could cost the state $350 million through health care, welfare, homelessness and criminal justice.

Campaign for Fairer Gambling founder Derek Webb said The guard The findings suggest that federal legalization of online gambling in America is “based on false assumptions.”

“Fundamental misunderstanding”

The NERA report directly contradicted a 2019 study commissioned by iDEA Growth, an iGaming industry advocacy group. That report concluded that online gambling in New Jersey had a “direct and indirect” economic impact of $2 billion in its first five years. This was accomplished by creating 6,552 jobs, $401 million in wages and $259.3 million in state and local government taxes, the study said.

Jeff Ifrah, founder and general counsel of iDEA, said the NERA report’s conclusions were “wrong and inaccurate” and ignored the exponential growth of jobs in the industry over the last decade.

“The NERA report is misleading for many reasons and betrays a fundamental misunderstanding of the most fundamental aspects of the legal iGaming industry: without legalized iGaming, consumers turn to illegal offshore sites that offer no protection to players and no economic benefit to the state. Ifrah said.

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