The Taxman Not Happy With New Jersey Online Gambling
As the months pass by it becomes clearer that online gambling is not the golden egg that the state of New Jersey was hoping for, and placing blame on denied credit card transactions and geolocation software not functioning 100% can only carry so much weight, as in all honesty, shouldn’t these issues have been considered before launch rather than after the green light was given. The fact that many of the major credit card issuers in the US will not handle transactions to New Jersey’s online casinos is of course a huge blow, however it’s a punch that could have dodged with regards to online gaming tax revenue estimations. Online gaming is legal, however thanks to the poorly worded and oft misunderstood UIGEA ruling, banks are not permitted to do business with online gaming companies...this was known before launch. For the third year running it is looking highly likely that the tax revenues projections will not be met in the Garden State and the Casino Revenue Fund, who collect taxes from both Atlantic City casinos and online gambling operations has cut its forecast by $126 million, and State Treasurer Andrew Sidamon-Eristoff bluntly stated that, “Clearly, the results so far have not met our expectations.” He is however still optimistic for the future believing that in the long term, things will improve, but that’s unlikely to be the case unless banks start doing business with online gaming companies in the state. To date, from launch, online gaming has generated $4.2 million with small rises being seen each month and budget officer David Rosen has stated that he expects that rise to continue and for the $12 million figure to be reached this year, with $48 million in returns coming in the following year. Clearly, and with all due respect, Mr Rosen hasn’t taken a look a current numbers of players on tables in regulated New Jersey poker rooms, which have started to drop as seasonality kicks in and the better weather drags people from the tables. Most online poker rooms see a drop in the amount of players in the warmer months, it happens every year and will continue to do so. According to reports, a total of 248,000 accounts have been created in New Jerseys online casinos, as to how many are funded and are revenue creating accounts is unsure, how many players have used the free cash and never intend to deposit and how many players simply cannot deposit due to credit card restrictions is also unsure. While not wishing to throw too much doom and gloom the way of New Jersey and its new online venture, there appears to still be, in many observers opinions, many factors that have not been figured in when projecting online gaming and tax revenue, you simply cannot predict that numbers will continue to rise when so many potential hurdles have yet to be jumped. Get through the summer months, attempt to facilitate CC deposits and then things will become clearer.