New Jersey gaming head takes aim at online gaming opponents as the state’s revenues soar Buck Wargo, CDC Gaming Reports · May 18, 2020 at 6:00 am The director of the New Jersey Division of Gaming Enforcement said the “staggering and impressive” online casino revenues in April show it’s “no longer a nascent industry” and took aim at “dinosaurs” and those he said were hypocritical by their moral objections. Since COVID-19 shuttered casinos in mid-March, online gaming has been strong in New Jersey, Pennsylvania and Delaware — the three active states that allow online casino games. David Rebuck emphasized that strength Friday at Clarion Gaming’s ICE North America digital conference, calling for iGaming’s expansion across the country. Online casino gaming has been approved in Michigan and West Virginia, but yet to be implemented. In April, during the first full month of the closure of New Jersey’s nine casinos, overall gaming revenue fell 69% from $265.4 million to $82.6 million compared to April 2019. Online casino games made up $79.9 million of that total in April, up 118% from $36.5 million in April 2019. Online poker rose 209% to $5.1 million. “If you continue to build out the monthly numbers and if continue at the rate they are today, you’re looking at an industry that’s going to surpass $1 billion in gross gaming revenue just in the state of New Jersey,” Rebuck said. “Whether that continues or not when we have the retail side of the business back, I think that remains an unknown and that’s a real challenge for our operators, because the growth in gaming is not just coming from people who are gambling more. The data show a significant number of people entering the marketplace for the first time and it’s not just people crossing over from sports who didn’t have an online account in Internet gaming. It’s also new clients.” With sports wagering celebrating the two-year anniversary of the U.S. Supreme Court striking down a federal law that banned full-fledged sports betting outside of Nevada, Rebuck expressed that gaming jurisdictions are more willing to take a risk with sports betting over the online casino market that has been in place in New Jersey since 2012-2013, he said. New Jersey is among the states fighting in the U.S. Court of Appeals a Department of Justice interpretation of the 1961 Wire Act that has the potential to stop online wagering, and Rebuck said that case is discouraging some states from moving forward with online gaming and sports wagering at this time. He’s optimistic, however, about the case holding up. “The messaging coming out from some of the naysayers and those opposed to online gambling, in some cases, is extremely hypocritical,” Rebuck said. “They offer online sports wagering in their jurisdictions and might even offer online sports wagering from their properties, but for some reason, they have moral issues with online casino gaming. I think the honesty of their arguments has to be presented. I understand the concern people have for their business being cannibalized and concern that they don’t want the competition.” Rebuck said online casino gambling is a viable business opportunity across the country. In seven years of operating in New Jersey, there hasn’t been any cannibalization from brick-and-mortar operations. “Actually, the reverse is happening,” Rebuck said. “We see an expansion of gambling. We have people interested in online gambling and not interested in the retail environment and people who want to do both. Cannibalization is a false positive by naysayers who fear change and fear they wouldn’t be able to successfully compete against the online gaming operations.” Rebuck said that those who argue New Jersey’s brick-and-mortar operations would be even stronger without online say it’s not possible to get an extra $500 million to $750 million a year in retail revenue. “That’s never going to happen in New Jersey, and I doubt it will happen anyplace else,” Rebuck said. “That’s a significant amount of money to increase over a $3 billion retail product. Where are your customers coming from? Show me? You can’t.” New Jersey, which has online operators partnering with brick-and-mortar casinos, is an example for states to follow with “its robust regulatory practices.” Even with online registration and play, New Jersey casinos are able to verify a player’s identification, age, source of funds and how that money is wagered — standards that are stronger than when someone goes into a casino in Nevada where registration must be done in casinos before there can be online play and sports wagering. Jurisdictions can be fooled by counterfeit identifications in person, he added. “I think the New Jersey model is stronger,” Rebuck said. “I will put our system against any in-person verification of people.” Rebuck, who said there’s significant improvement in credit card acceptance over the last five years, said the bad debt from online gaming has a lower risk than department-store charge cards. Sports betting, with a shutdown of most of the world’s biggest leagues, reported only $2.6 million in gaming revenue compared to $21.6 million in April 2019. New Jersey, like other jurisdictions, added ping pong and other obscure sports and leagues to their sports betting menu during the pandemic. Rebuck said the shutdown of traditional sports betting has given regulators an opportunity to look at events they’d never considered before. He said it will be interesting to see how much demand for those sports exists once traditional events returns. There could be demand, since many international events take place across multiple time zones when American sports aren’t playing, he said.