Inside Asian Gaming

inside asian gaming JUNE 2015 30 Online Gaming Net Gain? A udaces fortuna iuvat is an old Latin proverb that, loosely translated, means “Fortune favors the bold.” For centuries it’s been used as a motto for various branches of the military service and in family crests. It’s also often used to describe a “first-in” business strategy. After all, the early entrants into a new market almost always get to dictate how that market will evolve, in addition to capturing the lion’s share of the proceeds while everything is new, exciting and full of potential. But while being bold or first may lead to fortune, these attributes don’t necessarily guarantee that the path to success will be easy or obstacle-free. This observation has been born out in any number of industries over the years, one of the latest being the nascent for-pay online casino gaming market in New Jersey. When the re-interpretation of the Wire Act by the Department of Justice in 2011 cleared the way for states to consider the legalization of various forms of online wagering, New Jersey quickly planted its flag in this virgin gaming territory, becoming in 2013 the first—and still the only—US state to approve both Internet poker and casino games. Under the measure, only Atlantic City casinos are allowed to host iGaming sites in New Jersey. State officials claimed it would provide a much-needed shot in the arm to the ailing industry—there are now only eight Atlantic City casinos left after four were shut down last year, with a fifth narrowly escaping the same fate. The officials estimated New Jersey’s online gaming revenue in the first year would amount to $1.2 billion, providing the state with $180 million based on the 15% Internet gaming tax. Enticed by both the opportunity and potential profits, six Atlantic City-based casino operators applied for and received Internet gaming licenses and authorized iGaming platforms officially went live in November 2013. At that time, as the first state to approve and launch casino-style gaming on the Web, New Jersey’s iGaming forecast appeared sunny. But fast forward a year, and the Garden State’s Internet gaming gambit appears anything but successful and secure. Indeed, gross revenues for the industry’s first full year of operation in 2014 amounted to US$122 million, only 10% of the $1.2 billion initially predicted by the state, leaving officials to try and determine what went wrong and what is needed to bring the market up to predicted revenue levels. “Even one year into the process with the experience which has been gained, Internet gaming is still in its early stages of development One year in, New Jersey’s online gaming experience shows the promise and potential pratfalls of establishing iGaming operations within the United States By Paul Doocey