Financial Investor Moody’s Sees “Big Boost” From Online Gaming For New Jersey Casinos
Although the state of New Jersey only passed their online gambling and poker bill earlier this week, one of the major investment firms is already hailing it as a “big boost” to the twelve casinos that operate in Atlantic City.
The investment firm Moody’s Investors Service stated that internet gambling would provide “much needed help” to the Atlantic City operators, the third largest in the United States behind only Nevada and Pennsylvania. “The law is a shot in the arm for the existing Atlantic City operators,” Moody’s vice president Peggy Holloway stated to Associated Press writer Wayne Parry on Thursday. “They have been struggling with weak gaming revenues and competition from other states.”
Holloway’s report doesn’t put an exact amount on the new revenues that will be brought into the New Jersey gaming system, but points out many avenues that will be beneficial to them. “It is difficult to estimate how much growth it will generate for the New Jersey gaming market, which last year raked in about $3 billion of gaming revenue,” Holloway’s report stated. “The new internet capability will surely draw to gaming some people who don’t currently visit casinos. Operators will also have the opportunity to offer online players incentives to visit their facilities in person.”
Parry cites Holloway’s choices for “winners” under the new online gambling system in New Jersey. With four of the twelve casinos in New Jersey, Holloway says that Caesars Entertainment would be the biggest beneficiary of the new law. Caesars would have the most to offer its players with its ownership of the World Series of Poker and could move quickly to opening up an online offering with its partnership with 888 Holdings PLC, which provides its software platform internationally. Boyd Gaming and MGM Resorts International, the co-owners of the Borgata, could also see some benefit, according to Holloway.
Not mentioned by Holloway, but something that lurks in the background, is the potential purchase of the Atlantis Casino and Hotel by the powerful online poker company PokerStars. If the purchase of the Atlantis by PokerStars is approved by the New Jersey Casino Control Commission (NJCCC), PokerStars would bring an influx of money to improve one of the poorer-performing casinos on the Atlantic City Boardwalk. It would also bring its potent online poker operation (and other gaming options) to the New Jersey online gaming industry.
The new law, passed rapidly by the New Jersey legislature and signed by Governor Chris Christie earlier this week, is more than just online poker. The new law allows Atlantic City casinos to offer any game online that is currently offered in their establishments (it also doesn’t require players to be New Jersey residents, only that their computer is physically located in the state). An analyst with Wells Fargo Securities, Dennis Farrell, noted to Parry that online gambling in New Jersey could be a $1.5 billion industry within five years, which would provide a tremendous influx of capital to the Atlantic City casinos.
That industry could potentially grow if the current wave of interstate compacts comes into existence. The New Jersey law allows for interstate compacts to be signed with other states to increase the player pool. Nevada’s online poker law originally left the potential for interstate operations in the hands of federal authorities but, recognizing the gridlock in Washington, D. C. and the inability to pass federal online gaming regulations, moved forward in late February to allow Governor Brian Sandoval the ability to negotiate pacts with other gaming states to increase player pools. (Delaware, the other state that has passed online gaming regulations, also has an interstate clause in its regulations.)
While only three states currently have passed online gaming and poker regulations, several other states are beginning (or continue) to entertain the idea. California (the largest state in the U. S. by population) recently introduced online poker legislation in its General Assembly, while the state of Iowa has passed an online poker bill through a Senate subcommittee and is expected to act on that legislation in the near future. Other states may jump on the bandwagon as the state-by-state regulation of online casino gaming and poker picks up speed.
Want the latest poker news in your twitter feed? Follow PokerNewsDaily on Twitter.