New Jersey Releases Study Profiling Online Gamblers In The Garden State
The State of New Jersey’s Division of Gaming Enforcement recently released a detailed study of online gambling consumer habits.
Some of the information contained reaffirmed long held beliefs about the habits of online gamblers, but other statistics may come as a surprise.
A total of 378,103 players initially signed up for accounts at NJ gambling websites. However, only 28 percent of the account creators actually played any game.
This was most likely due to only a small portion of the player’s accounts having been created by individuals living within the United States. The majority of the non-player accounts were created by individuals living in other countries.
So who is gambling online in New Jersey?
Sixty-nine percent of the accounts created were men, 27 percent were women, and 4 percent had no gender information.
Those statistics don’t come as a surprise to anyone who has spent a considerable amount of time around the gambling industry, but when it comes to the “top 10 percent” of gamblers, you may notice something unexpected.
Of the top 10 percent, 53.39 percent were female. This shows that while fewer women gamble online, the ones that do actually do so at a significantly higher rate than their male counterparts.
Another unexpected result of this study was that the top 10 percent of gamblers didn’t gamble at higher stakes than other online gambling consumers – they simply gambled at a much more frequent rate.
When are people gambling online?
The majority of online casino bets were placed between the hours of 3 p.m. and 12 a.m. The number increases as the hours progress, with 9 p.m. until midnight containing 21.45 percent of all wagers placed.
The largest wagers, interestingly enough, were most often placed between the hours of 9 a.m. and noon.
Who uses responsible gaming features?
The vast majority of people across all gaming types (casino, poker, and tournament) did not use responsible gaming features. In fact, only about 14 percent of gamblers used the feature at least once. Of those 14 percent, the majority of players using the features fell into the 25 to 34 year age group.
It’s also interesting to note that although RG gamblers oftentimes placed smaller wagers than non-RG gamblers, the number of wages placed by RG gamblers was much higher.
By far the most popular RG feature was self-exclusion from online gambling, which came in at 58.49 percent of total usage.
The typical NJ online gambler
The average New Jersey online gambler tends to be younger than their land-based peers; they tend to be male, outnumbering females by 3:1, and they usually fall into the 25 to 44 age group.
Younger as well as older gamblers are underrepresented, with older gamblers playing vastly less online than they do at brick and mortar casinos.
Much To The Dismay Of Residents, Sports Betting In NJ Still Illegal
Last month, the United States Court of Appeals for the Third Circuit thwarted New Jersey’s plan to operate sportsbooks out of its casinos and racetracks.
The court threw out a law that was passed by New Jersey back in 2014, and that would have provided a potentially significant revenue stream to a struggling Atlantic City economy.
A recent poll by Seton Hall University stated that 63 percent of the population believes that sports betting should be legal, and 68 percent of people that responded to the survey said that sports betting’s legality should be decided at the state level.
Despite the combined efforts of a group of New Jersey sports betting proponents, which included lawmakers, casino owners, international sports book operators and members of the general public, the court upheld the Professional and Amateur Sports Protection Act (PASPA).
The defeat was a blow to New Jersey’s already-crumbling economy, which counts on gambling revenue for a large portion of its income.
Reactions to NJ sports betting’s lost legal fight
Geoff Freeman, president of the American Gaming Association, was one of the most vocal in his distaste for the result:
A federal government prohibition has driven an illegal, and occasionally dangerous, sports betting market of at least $150 billion annually. Law enforcement, mayors, leaders in sports, fans and many others agree that it’s time for a regulated sports betting marketplace that protects consumers, communities and the integrity of sports we enjoy.
Sports betting in New Jersey would bring a much-needed influx of revenue for the state. In Nevada, where sports betting is legal, the state grossed $4.2 billion dollars in wagers just last year.
Worldwide, the number of wagers placed annually is a staggering $150 billion.
Many sports organizations, including the NCAA, have been strong opponents of legalized sports betting in the state and have argued the legalization of sports betting would damage the integrity of sport in America. They even went so far as to sue New Jersey back in 2012, saying that the expansion of legal sports betting would lead to more fixing of games.
Recently, however, many professional leagues, including the National Basketball Association, have acknowledged that the country is moving towards legal sports betting and that opposition may have significant negative effects.
Starting as early as 2017, formal lobbying efforts on Capitol Hill may begin for the expansion of legalized sports betting, but for the time being, sports betting in the New Jersey will fall in the hands of illegal bookmakers.
Image credit: Cheryl Ann Quigley / Shutterstock.com
The Battle For North Jersey Casinos Continues
If you’ve watched television lately in the state of New Jersey, there is a good chance you’ve seen a recent anti-North Jersey casino advertisement featuring Rockaway Township Councilwoman Patty Abrahamsen.
The advertisement attacked the referendum stating that Patty Abrahamsen trusted her pension would be there for her family, but that the Trenton politicians broke their promise. Instead of funding pensions, the politicians gave big contracts to Wall Street.
The advertisement then goes on to say North Jersey casinos would be no different. Politicians would break promises, special interests groups would get rich and, when the casinos fail, we (the residents of New Jersey) would pay the price.
The group responsible for the September 6, 2016 advertisement, Trenton’s Bad Bet, describes itself as “a diverse collection of concerned New Jersey community leaders, unions, businesses and residents.”
At the time of this writing, the airwaves have been dominated with anti-casino advertisements, but the proponents for the referendum are expected to pick up the slack as we head further into September.
Who’s leading the pro-North Jersey casino fight?
The Standardbred Breeders and Owners Association of New Jersey have hired MWW, a leading East Rutherford-based public relations firm to advocate for the passage of the referendum which would allow for two casinos to be constructed in the area between New Brunswick to the New York state line.
The SBOANJ have stated that they will task MWW with the following:
Convincing the public to vote favorably for the ballot question through a series of public relations, media, and advertising events sanctioned by SBOANJ. Additionally, the firm also will highlight individual Association members and the benefit they bring to their towns and communities.
If the referendum passes in November, according to a website created by Our Turn NJ, construction would begin on a $4 billion dollar luxury complex located at 100 Caven Point Road.
The complex, created by billionaire Reebok founder Paul Fireman, would be a “world-class resort with gaming that will bring jobs and economic opportunity to Jersey City and the surrounding region.”
Early polls seem to suggest that voters aren’t in favor of the expansion, but the margin is close and as we get closer to the November vote, the issue is bound to heat up – and additional voters will make up their minds.
According to Matthew Hale, a Seton Hall University political scientist, some parts of New Jersey may get to play a deciding role in determining the fate of the issue:
The casino ballot initiative really is going to be a fight between the north and the south, and maybe Middlesex County and Monmouth County get to play the tiebreakers about how that’s going to go.
The role of NJ online gambling in the debate
It’s not clear exactly how online gambling in New Jersey would or wouldn’t change should expansion move ahead.
Much would depend on the companies that end up populating the expanded area if the initiative meets with success; if it’s simply an extension of Atlantic City operators like Caesars, Tropicana, and the Borgata, then the question becomes moot.
But if new operators enter the fray, they may want access to the online market along with Atlantic City’s casinos, a demand that could prove contentious given the legal and regulatory structure of New Jersey’s market for regulated online casino and poker.
Casino for North Jersey Maybe Closer Than Ever
As we’ve discussed here before, the debate continues to rage on over whether building a casino in North Jersey is a good idea. On one side of the debate, South Jersey lawmakers argue that such a casino would only siphon revenue from an already ailing Atlantic City. On the other side, critics make the point that Atlantic City’s rivals are New Jersey’s rivals when it comes to gambling revenue, and they’re pulling players out of New Jersey and into New York, Connecticut, and Pennsylvania.
In 2011, Governor Christie declared a moratorium on discussing the construction of a casino outside of Atlantic City until 2016. This was part of his five year plan to rejuvenate Atlantic City. Late last year, the governor changed his tune.
“It’s a conversation I’m willing to have,” he said in reference to State Senate President Stephen Sweeney’s proposal to begin the discussion of bringing a casino to North Jersey, possibly involving a November 2015 ballot question about it for voters.
“This was always going to happen,” said State Senator Paul Sarlo, a democrat from Wood-Ridge, “it was just a matter of time.”
We will see a casino in North Jersey in our lifetime. That’s a fact. The real question is where it will be built. Northern New Jersey is among the most densely populated parts of the country. Land here is expensive and, especially in northeastern New Jersey, difficult to come by. Proponents of a casino project have suggested various sites around the upper half of the state, each offering unique challenges and benefits.
Jersey City is a strong candidate for New Jersey’s first casino outside Atlantic City for a number of reasons. The first, perhaps the most obvious, is its proximity to New York City. Jersey City is only a short PATH ride from the greatest metropolis of the western hemisphere.
“We’re closest to Manhattan. A casino here would be the highest grossing in North America, bigger than any Las Vegas casino,” said Jersey City mayor Steve Fulop said in The Record.
The other is that it’s rapidly gentrifying. Jersey City’s waterfront is currently undergoing a renaissance and having a tourist attraction along the Hudson’s banks would only spur this renaissance further. Jersey City is hip. People want to be there. And in the tourism and recreation industry, you’ve got to be where the people want to be.
The Meadowlands is the other obvious choice for North Jersey’s first casino. This option has been discussed to death. It’s the one everybody knows about–the one that’s gotten the biggest cut of the ongoing discussion. And for good reason. As we’ve discussed before, the Meadowlands is an activity hub for its region. It’s right off three major highways, nestled in one of the densest places in the United States. Heck, it’s even got a resort-sized complex more or less ready to inhabit, just standing there in limbo. And it’s all a mere thirty minute train ride from Manhattan.
This is Sarlo’s goal. He wants to completely redevelop the Meadowlands into a destination with sports, shopping, and entertainment. Earlier this month, Governor Christie signed the Hackensack Meadowlands Agency Consolidation Act, which merged the New Jersey Meadowlands Commission and the New Jersey Sports and Exposition Authority to create the Meadowlands Regional Commission.
By placing control of Liberty State Park into his new commission’s hands, the governor opened the previously-protected land to private development. And that’s the problem. The Meadowlands is home to a fragile ecosystem. Academics and environmentalists alike have decried the governor’s decision and called for a revision to the bill. Moving forward with a Meadowlands casino would not only be difficult due to the backlash, but potentially disastrous for one of New Jersey’s most endangered biomes.
Other Options in New Jersey
Jersey City and the Meadowlands aren’t the only proposed homes for a new casino. Individuals and lawmakers have pitched sites across the state, such as Newark, Secaucus, Monmouth Racetrack, and sites in Morris county. Like the aforementioned proposals, these all have their pros and cons.
Although Monmouth Racetrack seems like an easy choice because of the racetrack, it’s too close to Atlantic City. The two are only about eighty miles apart, which is approximately a 1.5 hour ride on the Garden State Parkway. It’s not distinct enough from Atlantic City to be a draw on its own.
A casino in Newark could be a great thing for the developing city, but there’s one major drawback: it’s a city. It’s built up, roads and their traffic patterns are in place, and the issue of simply finding a spot where a resort would physically fit, then developing that land would be a headache. Newark’s not like Jersey City – it’s moving forward, but it’s nowhere near the point that Jersey City has reached in recent years.
Secaucus? Maybe it could work. It’s right off the turnpike. NJ Transit’s train hub is there. But Secaucus lacks the lustre of a Jersey City or even an Atlantic City. It’s suburbia. There’s nothing wrong with it, but there’s nothing especially appealing about it. It’s just kind of there.
Then there’s the western half of North Jersey. Morris county, Hunterdon county, Warren and Sussex counties could all be great spots for a casino.
What This Means for New Jersey
It means new jobs created in the wake of all the jobs lost in Atlantic City. The dealers, cocktail servers, technicians, and hotel staff who have been displaced by the closures would have the opportunity to follow their industry north and secure work in their field. A casino in North Jersey would also mean jobs for construction companies, livery drivers, maintenance workers, and the peripheral industries like food service and public transit. It can also create an immense opportunity for investors, giving them the chance to invest in New Jersey. This revenue would also be nothing but a boon to the state’s struggling gaming industry. And that, regardless of where it occurs, would be a great thing for all of New Jersey.
Credit Card Codes: Too Late for NJ Online Casinos?
If you’ve played in one of New Jersey’s online casinos since their launch in late 2013, you’ve likely faced an issue with getting your credit card to work with them.
Between making the account, proving that you’re actually located within New Jersey’s borders, and connecting your bank account to your casino of choice, you probably felt like tossing up your hands and shouting “eff it!” after your second, third, fourth or subsequent error message.
You are not alone. Credit card payments have lagged as online gaming gained acceptance. In 2013 and 2014, VISA payments to online gaming venues were only accepted approximately 73% of the time. During that same time period, only about 44% of Mastercard payments were accepted.
Online gambling in New Jersey and the rest of the United States was already suffering from an image problem. This just made it worse. Skeptical prospective players became frustrated non-players and online gambling revenues remained much lower than initially projected.
What is a Credit Card Code?
Merchant category codes are the codes that banks assign to merchant types to clarify where and how the credit card is being used. These codes are comprised of four digits.
For example, Mastercard initially assigned online gaming operators the code 7995, which is also its code for lottery tickets, racetrack wagers, and poker chips.
Banks would see this code and, unable to differentiate gambling at a legal online venue from sending money to an offshore site, block attempted transactions due to a concern over illegal gambling activity.
To prevent this from happening to players attempting to legally gamble, Mastercard introduced a separate code for legal gambling venues: 9754.
New Jersey lawmakers have decided to follow Mastercard’s lead and introduce a new credit card code to make it easier for players to access the state’s online casinos.
This new code, specific to New Jersey’s online gaming industry, will create a unique category for these enterprises, preventing any confusion like in the Mastercard example.
The code was created through an agreement between the New Jersey Division of Gaming Enforcement and the state’s Department of Banking and Insurance.
It will be fully implemented by the spring of 2015.
Security and Legality Concerns
Online gambling only became legal following a new interpretation of the Wire Act of 1961, which prohibits the electronic transfer of funds for wagers on sporting events or contests.
This act banned certain business models based on the interstate transmission of money. In 2011, the United States Department of Justice officially stated that funds transferred for use in online casinos and poker rooms are not in violation of the act.
However, many banks remained skeptical of this ruling and the newly-legalized online gambling it brought. These banks refused to authorize transactions related to legalized online gambling.
Two examples of banks that did not allow their credit and debit cards to be used to play online, stating concerns of violating the Wire Act and the Unlawful Internet Gambling Enforcement Act of 2006, were Bank of America and Wells Fargo Bank.
Concerns About Gambling Addiction
Critics of these new credit card codes and alternatives point out how making it easier to play online can enable gamblers’ addictions. By accessing online poker rooms and casinos with little to no roadblocks, it can become dangerously easy for at-risk players to lose everything.
In New Jersey, regulations are in place to protect these players. Once a player’s online gaming account reaches a balance of $2,500, the casino is required to block any further contributions until the player acknowledges how much he or she has in the account.
Some casinos take this requirement further, limiting the amount of money that a player can add to his or her account or giving players the opportunity to set their own limits before contributing. But advocacy groups like Stop Predatory Gambling feel this is not enough.
“Their business model is based on people who are addicted or are in the process of getting addicted,” said Les Bernal, the group’s national director. “If you’re a bank in this business, you’re essentially profiting from blood money.”
Alternatives to Credit Cards
To work around these issues, New Jersey legislators as well as the casino operators have opened access to alternative methods of paying for online gaming.
Lawmakers approved the use of Skrill, a digital wallet provider, as a way to transfer money to online casinos to play. Skrill can be linked to a bank account or loaded with a credit or debit card. Once the money is in the digital wallet, players can use it to easily gamble online without giving the casino their personal information.
Players can access their Skrill wallets through the provider’s smartphone app.
Another way to avoid having to use a credit or debit card to gamble is to use a prepaid card. Golden Nugget Online Casino took this direction to solve issues players had with using their own cards while it was still in operation.
Better Late Than Never
Saying that New Jersey’s online casinos have faced ridiculous obstacles is like saying the Atlantic Ocean is cold this time of year – of course they have. This issue with the credit card rejections was just one in a series of many, many stumbling blocks for the industry.
But will the adoption of new credit card codes be enough to alleviate the problems online gambling in New Jersey has faced? Not by itself.
But it’s coming at a time of remarkable growth for New Jersey’s online gambling industry. The failing casinos are closed, the websites that weren’t making ends meet shuttered, and now only the strongest players in the game remain.
They’re poised to keep trending upward and if the end of 2014 and beginning of 2015 are any indication of the next stage for the gaming industry in the Garden State, the future looks bright.
Late 2014 Surge: Online Gambling Revenues up In NJ
That’s right – New Jersey’s online casinos and poker rooms enjoyed a very fruitful holiday season. Following a year of dismal news stories covering everything from Atlantic City’s plight to international poker websites pulling out of the Jersey market, this is one bright spot for the gambling industry in the Garden State. It was also not the only surprise the industry had in store this winter.
“According to a University of Las Vegas Center for Gaming Research study, New Jersey online gaming accounts for over 90% of the legal U.S. online gaming revenue,” David Rebuck, director of the New Jersey Division of Gaming Enforcement, said in a recent press release summarizing his thoughts about the first year of legal online gambling in New Jersey.
“Although Nevada and Delaware started Internet gaming operations several months before New Jersey, New Jersey’s authorized Internet sites, from January 2014 through October 2014, generated $25 million or 75% of the total Internet poker revenue in the U.S. They also generated $78 million or 98% of all Internet non-poker casino revenue. From the inception of New Jersey’s Internet gaming operations on November 21, 2013 through November 30, 2014, Internet gaming win was $120.5 million.”
New Jersey Online Poker Revenues
All poker websites available to New Jersey players saw a revenue boost in December 2014. PartyPoker NJ and BorgataPoker.com both saw an 11.3% spike in revenues. WSOP.com NJ and 888poker NJ both enjoyed slight more moderate successes with spikes of only 7.8%.
Still, that’s great compared to how they were doing only a month earlier. November 2014 was the worst revenue month on record since online gambling became available to New Jersey players, with only $1.87 million in profits.
In 2015, PokerStars is coming to New Jersey. PokerStars is the world’s largest poker website and the host of the World Championship of Online Poker. As a powerful force in the online poker world, PokerStars brings brand recognition to our state, lending a sense of legitimacy to any remaining skeptics about online gambling’s safety.
Sudden Spike in Gambling Revenue? Why Now?
There’s no way to say for certain why New Jersey’s gambling websites had such a successful month after seeing revenues decline over the previous three months. Maybe the weather had something to do with it? It’s cold out so you’re inside more, reaching for your laptop or tablet for something to do.
Visits to Atlantic City and other shore areas drop every winter, so this might have just been regular Atlantic City gamblers choosing to log in from home instead of braving the cold and icy roads to get to the gaming floors. Lots of employees take time off during December as well, and what better way to escape from familial holiday obligations than finding a quiet spot to play a few hands of blackjack?
Maybe it had something to do with the recent trend of Atlantic City casinos closing – if those regular players’ favorite gaming haunts are closed, they might choose to play from home rather than find a new place to play.
Another theory is that people are playing more because they have more money to play with. Currently, gas prices in New Jersey are hovering around $1.70 per gallon. The last time we saw prices like this, it was 2008. Spending less money at the pumps means more money in New Jersey pockets; more money to spend on online gaming.
A Great Start to 2015
In total, poker websites earned $29 million from New Jersey players in 2014. The online casinos earned a total of $122.9 million.
Online gambling revenues are projected to continue to grow through 2015 as mobile use among players grows. Bitcoin and other cryptocurrencies are also set to be part of the growth of online gambling this year. As casinos and other outlets begin to accept these currencies alongside traditional money systems, consumers will become more comfortable using these currencies and more apt to spend them.
To put it mildly, the gambling industry in New Jersey hasn’t had the easiest year. The spate of casino closings, the disappointing start for its online gambling marketplace, and the constant back and forth in the state legislature about allowing the development of a gaming resort outside of Atlantic City have created a sense of uncertainty for gaming entrepreneurs and gamblers alike.
But this late-2014 spark brought a little bit of hope.
Maybe we’re past the worst of this rough patch and moving toward a better future as a leaner, more efficient industry. Maybe 2015 will be the year that goes down in history as the year of New Jersey’s gaming revival.
Sports Betting Recap: 2014 in Review
In New Jersey, legalized sports betting is stuck in a perpetual game of tug-of-war between state lawmakers and our nation’s professional sports leagues. Just when it seems like the current ban may be lifted, legal obstructions and challenges appear and maintain the status quo. As of November 2014, sports betting is illegal in New Jersey and facing an appeal of the most recent ruling, which came from a federal judge just before Thanksgiving. Now the case is heading to the federal Third Circuit Court of Appeals.
A Short History of Sports Betting in New Jersey
In 1992, the Professional and Amateur Sports Protection Act (PASPA) was passed. This federal law, also known as the Bradley Act, was created to legally define the status of sports betting in the United States and limit future state laws allowing this type of gambling. This act included a one-year window from its passage date during which individual states with active, licensed casinos were permitted to enact laws allowing sports betting. This window closed on January 1st, 1993. This window was created with New Jersey in mind, which ultimately did not take advantage of the opportunity to become exempt from the regulations set forth by the Professional and Amateur Sports Protection Act.
Under this ban, sports betting is illegal in all but four states: Oregon, Nevada, Montana, and Delaware.
In 2011, New Jersey voters approved the Sports Wagering Act. This law partially repealed the existing prohibitions on sports betting in the Garden State. The NCAA, MLB, NFL, NBA, and NHL responded by taking legal action against the state on the grounds that the law violated the PASPA. In 2013, an appellate panel in Philadelphia ruled in favor of the sports leagues. New Jersey lawmakers continued to pursue the case.
A Bill Becomes Law
In 2014, Governor Chris Christie signed the Sports Wagering Act into law. This act allowed New Jersey’s casinos and racetracks to facilitate betting on all sporting events except those involving New Jersey college teams or any other college sporting events hosted in New Jersey. All professional sporting events were fair game, and legal wagering was set to begin in mid-October at Monmouth Park racetrack.
Then, the sporting leagues created another hurdle for the fledgling sports betting industry. A federal judge granted them a temporary restraining order to continue hashing out the issue in court. Legal sports betting has still not begun in New Jersey and will not for the foreseeable future.
Opposition From Sports Leagues
Pushback against legalized sports betting comes from concerns about sports leagues’ reputations and image with fans who might be morally opposed to gambling. This is understandable. Gambling is a vice and just like other vices, such as alcohol and tobacco usage, can be harmful and addictive. But following the reports of doping, domestic violence, racism, and fraud found in our nation’s collegiate and professional sports leagues, making bets on games seems almost wholesome.
A famous exception to this opposition is NBA Commissioner Adam Silver. In November 2014, Silver’s pro-sports betting essay, “Legalize and Regulate Sports Betting,” was published in the New York Times.
A New Approach to Sports Betting
“I believe we need a different approach,” he wrote in the opening paragraph of the essay.
Silver’s stance is that legalizing sports betting will make it safer for individuals who choose to participate in the activity. Currently, gamblers place their bets through offshore websites and unregulated booking services. These are illegal and can be very risky for gamblers. Legalizing sports betting would bring much-needed regulation of the popular pastime.
“Times have changed since PASPA was enacted,” he wrote. “Gambling has increasingly become a popular and accepted form of entertainment in the United States. Most states offer lotteries. Over half of them have legal casinos. Three have approved some form of Internet gambling, with others poised to follow.”
The Magnitude of Illegal Sports Betting
Illegal sports betting is no small issue. In Silver’s piece, he states that Americans wager an estimated $400 billion illegally on sports every year. Think about that for a moment. $400 billion. For comparison’s sake, Walmart brings in about $352 billion in revenue each year.
Legalized sports betting is part of Christie and other New Jersey lawmakers’ plan to revitalize the state’s gambling industry and help our long-suffering Atlantic City.
“The economic impact that sports wagering can have on New Jersey is far too important to simply shrug our shoulders and move on,” said Senator Stephen M. Sweeney in response to the most recent block to the law.
In addition to the economic benefits for New Jersey, Silver argued that the legalization and regulation of sports betting can help betters and the outlets that offer this service. Regulating sports betting would require all operations to be licensed and monitored, creating a transparency that could help catch any instances of fraud. It would also ensure that all gamblers are of age and within New Jersey’s borders through age verification and geolocation technology. Finally, revenue from legalized sports betting could be used to fund programs that help gambling addicts recover from their addiction and other resources such as gambler education programs.
All About the Money
It’s about the money. It’s always about the money. I’ll bet you all the money I’m no longer able to spend at Taj Mahal that if the professional sports leagues and individual team franchises within them could get a cut from the bets placed on their games, sports gambling would be legal in all fifty states.
Real Money Social Media Games?
Some big changes are coming to New Jersey’s online casinos. Just last week, the New Jersey Division of Gaming Enforcement issued four amendments to our current gaming regulations. These amendments will allow the companies behind the current online casinos to offer new types of games to New Jersey gamblers. But the type of games they’re now able to offer might surprise you.
All Your Facebook Favorites
That’s right. You’ll soon be able to fund your in-game Candy Crush Saga and Words with Friends purchases directly from your online gambling account balance.
This does not mean that you’ll be able to play Candy Crush Saga for money. Believe me; if that was a possibility, I wouldn’t be sitting here writing articles about it. What it means is that there are new rules for the licensing of affiliate marketers associated with online casinos and these rules, among other changes, now allow game developers to create new games and license them exclusively to online casinos. Unlike under the old rules, new games are not required to be made available to every casino. That means that if, for example, Borgata hired a development team to create a series of puzzle games, those games would be offered exclusively through Borgata’s website.
All we know so far is that game developers will be able to combine social and skill-based gameplay with traditional games of chance. How much of the game may be skill-based versus how much must be chance-based has yet to become public knowledge.
What is Affiliate Marketing?
With affiliate marketing, businesses work with marketers to promote themselves to a larger audience. These marketers are known as affiliates and they run advertisements for these sponsoring businesses on their own websites. The business rewards its affiliates by paying them either a flat rate or a per-click fee for every visitor who uses the ad to reach their site.
The laws that govern online gambling in New Jersey recognize two different categories of affiliates: vendors and ancillary casino service enterprises, or ancillary CSIE’s. Vendors are the companies that provide goods and services to casinos, such as gaming equipment and repair services. Ancillary CSIE’s are directly supply casinos with support services for their operations. Examples of the services ancillary casino service enterprises may provide are junket enterprises and their representatives and the licensing of authorized games.
What Other Changes Did These Amendments Bring?
The rules regarding affiliate marketing for online casinos weren’t all that changed with these new amendments. Most notably, one of the original Casino Control Act revisions’ restrictions was loosened.
The initial revision to the Casino Control Act that allowed internet gambling companies to offer gaming to New Jersey players required all online casinos’ servers and other operational equipment to be housed within brick and mortar casinos in Atlantic City. When the wave of closures began earlier this year, this requirement posed a problem for certain gaming websites.
Betfair and Ultimate Casino were both partnered with Trump Entertainment Resorts’ properties this way. Ultimate Casino, which was partnered with Trump Taj Mahal, decided to exit the New Jersey online gambling sphere after an accusation of a contract breach regarding its partnership with the Taj Mahal. Betfair, which was partnered with Trump Plaza, had to scramble to find a new partner when its host folded. Under this month’s revision to the Casino Control Act, gambling websites may now house their servers elsewhere. They’re still required to keep this equipment within Atlantic City’s municipal limits, but may keep them in any location as long as it’s secure and leased or owned by the casino that operates the website it serves.
The First Native American Tribe to Run An Online Casino in New Jersey
The other big change is more of a milestone for the New Jersey gambling scene. For the first time ever, a Native American tribe will operate an online casino in New Jersey. The Pala Band of Mission Indians, a tribe from San Diego county in California, will soon operate Pala Interactive, LLC, through the Borgata Hotel Casino & Spa. Operating a casino is nothing new for the tribe, which operates the brick and mortar Pala Casino in San Diego, California. Only time will tell if the tribe’s success with a land-based casino will translate to success on the internet, serving a market on the continent’s opposite coast.
The Year in Review: 2014
These changes are a lot to process. They’re all part of the trial and error that come along with launching a new industry.
As a New Jersey gambler, I’ve got to say, it’s been a trip. Here we are only a year since New Jersey’s online casinos launched and in that time span, we’ve seen closures both online and on the boardwalk, union disputes, family-friendly attempts to pump life back into our aging oceanfront playground, and the continually evolving debate over bringing casino gambling to other cities in the Garden State brought up, shot down, and brought up again.
As a millennial and a self-proclaimed smart phone junkie, I’m looking forward to playing games like Candy Crush Saga and Words with Friends using my online casino accounts. With new games and different ways to play, this legislation gives the creative minds behind popular casino games a new platform on which to express themselves. Alongside that, it gives serious and casual gamers alike new ways to interact and have fun together through the internet.
Betfair Switches Casino Partner as Online Sites Scramble
The brick and mortar casinos along the Atlantic City boardwalk aren’t the only casinos shutting down this year. Following the rather underwhelming response to online gambling that we’ve seen in New Jersey since its launch in November 2013, internet gaming hubs are closing their virtual doors and packing up.
In New Jersey, all online gambling companies are required to partner with a physical casino to be allowed to operate. This requirement is written into the Casino Control Act that allowed online gambling companies to offer their services in New Jersey. It states that all internet gambling sites available to New Jersey players must physically house their servers in one of Atlantic City’s casinos.
Interestingly, the act does not specify what happens to a virtual casino when its brick and mortar partner shutters. Now, as the mass shut down of Atlantic City’s casinos continues through the final quarter of 2014, we’re left to wonder what will happen to those virtual partners. Specifically, we’re left to wonder about what will happen to those paired with casinos that will close or already have. The two I’m referring to are Betfair and Ultimate Casino, both of whom are partnered with Trump Entertainment Resorts’ properties.
Trump Plaza, one of Trump Entertainment Resorts’ final two properties in Atlantic City, closed in September 2014. One property remains, but is slated to close on November 13. Ultimate Casino sued Trump Taj Mahal earlier this year, claiming it had breached important contracts held between the two companies.
Ultimate Casino’s Closure
Ultimate Casino’s last day of operation was September 21st, 2014. Its website currently states that the company is in the process of refunding any player balances that were left over when the website stopped offering games. Additionally, all U Point balances are accessible to players until November 22nd. Players are being directed to Golden Nugget Casino’s website to continue to play online slots and table games.
Although Ultimate Casino’s revenues lagged behind other poker websites like Borgata Online, it still managed to bring in an average of $500,000 per month while it operated in New Jersey. The New Jersey site’s closure will not affect Ultimate’s operations in Nevada, where it continues to enjoy healthy operation.
Betfair’s Still Open – For Now
Although Betfair’s physical partner, Trump Plaza, is closed, Betfair continues to operate. This is because it was given a special reprieve from the New Jersey Division of Gaming to remain open while it attempted to find a new partner. It found a new partner in Caesar’s. This partnership is short-lived, however, and is set to expire in six months.
The UK-based Betfair casino has enjoyed a fairly strong year of profits in New Jersey. It offers slots, poker, and other tables games like baccarat and roulette.
Other Online Casinos in New Jersey
Betfair and Ultimate Casino are only two of the many online casinos available to New Jersey players. As we’ve discussed in previous articles, it’s inevitable that some of the pioneering online casinos won’t make it. It’s the nature of any fledgeling industry – early companies make mistakes, falter and fail, giving new companies insight in the process. Newcomers to the New Jersey online gambling scene can look toward these casinos and avoid making their same mistakes, just like the existing brick and mortar casinos can look toward Showboat, Trump’s properties, Revel, and the Atlantic Club to avoid making the mistakes they made and power through Atlantic City’s current slump.
The Fall of the Trump Casinos of New Jersey
The recent downturn for Atlantic City properties has not been kind to Trump Entertainment Resorts, the parent company behind Trump Taj Mahal and Trump Plaza. Once one of the most powerful forces in the region, slowing sales and weak customer engagement have left Trump’s properties gasping for market share, failing, and finally closing. In September, Trump Plaza closed its doors after thirty years of operation on the Atlantic City boardwalk. Now, Trump Taj Mahal is set to close its doors on November 13, 2014, if it does not get the concessions it’s seeking from its employees’ union, Local 54 of Unite-HERE.
Taj Mahal’s Final Days
Trump Entertainment Resorts has claimed that its excessive union fees have choked it into bankruptcy and it must be relieved of these costs for the hotel and casino to continue to operate beyond November 13th. 2,800 union workers are employed by the 24-year-old casino, which cannot meet its costs because of the lack of profits coming in through its hotel rooms, retail, dining, and gaming floors. In October 2014, the company went before a judge in Delaware to request tax breaks and union concessions from Atlantic City and the state of New Jersey. It proposed a complete reorganization of the company, fueled by an influx of $100 million from its majority shareholder, billionaire business mogul Carl Icahn. Under this plan, Icahn would become the casino’s new owner.
Understandably, union members are reluctant to allow Trump Entertainment Resorts out of its contract. Although Local 54 of Unite, the largest casino workers union in Atlantic City, offered to accept reduced pension contributions from the company, it remains adamant that the casino operator be held to its contractual obligations.
Trump’s Boardwalk Glory Days and Their Downfall
When Trump Taj Mahal opened on April 2nd, 1990, the climate in Atlantic City was worlds different that it is today. Eleven casinos operated within the city and brought in $2,951,581,000 from 31,813 customers that year. This was coming off Donald Trump’s explosive career in real estate during the 1970s and 1980s. Famous projects like the Grand Hyatt and the Wollman Rink in New York City launched Trump and his company, The Trump Organization, from a regional real estate developer to a household name. Taj Mahal was Trump’s third property to open in Atlantic City, following the Trump Marina and the Trump Plaza. In 1996, the Trump World’s Fair joined the lineup until its closure in 1999.
It took Trump’s company two years to complete the renovations to the building that was originally constructed by Merv Griffin’s company as Resorts Taj Mahal. It was the center of a controversy in 1988 when Resorts postponed the project indefinitely due to insufficient funds. Trump offered to purchase the property , Griffin refused, and a lengthy battle between Trump and Griffin ensued. When the dispute was solved and the Taj Mahal finally opened, everyone in attendance was treated to a live performance by Michael Jackson. At the time, the Taj Mahal was the most expensive, opulent casino in Atlantic City. It remained the city’s most profitable casino until the Borgata opened in 2003.
In 1995, Trump created Trump Hotels and Casino Resorts, which eventually was renamed Trump Entertainment Resorts. Its financial health began to falter in the 2000s and the company filed for bankruptcy in 2004, 2009, and 2014. 2009 was the year Donald Trump stepped down from his position as chairman of the board of directors at the company. Initially, Trump stated that he would fight the company’s ownership team, investors Carl Icahn and Andrew Beal of Beal Bank, to have his name and likeness removed from his former properties.
The Man and the Brand
Donald Trump is a powerful brand, and Icahn and Beal knew it. Although Trump stated that he’d never allow them to continue to use his name and likeness in hotel and casino advertising and décor, he settled for 5% stock in the company plus an additional 5% stock to allow them to continue to use his name and image.
Trump’s Properties Aren’t the Only Ones Suffering
The Trump Marina and potential Trump Taj Mahal closures are merely part of the larger trend of casino closures this year. The Atlantic Club, Revel, and the Showboat all closed for good in 2014, leaving conspicuous holes in the Atlantic City boardwalk.
Various factors contribute to Atlantic City’s downturn. The most significant factor is the recent construction of casinos in New York, Connecticut, and Pennsylvania that draw away clientele that historically visited Atlantic City. With more casino resorts, such as the Horseshoe Baltimore, offering modern, clean, safe alternatives to Atlantic City’s aging boardwalk offerings, the pressure for New Jersey’s casinos to retain their customers only becomes more intense each year.
Physical casinos aren’t the only threat to Atlantic City’s properties, though. Since late 2013, Internet gambling in New Jersey has changed the landscape for gamblers in New Jersey by allowing them to play slots, blackjack, and poker from the comfort of their own couches.
And the final factor, possibly the most fatal because it’s here for the long run, is that Millennials, young adults born in the 1980s and first half of the 1990s, just don’t visit the casinos the way their parents and grandparents did. Today, millennials account for 1/3 of the United States’ population, and their lack of gambling habits will only increasingly hurt casinos’ bottom lines in the future.
Once Trump Taj Mahal closes, Trump Entertainment Resorts will no longer have property in Atlantic City. Whether or not this happens in November depends on what the judge says about the company’s obligation to its employees’ union. If it can be relieved of some of its obligations, the Taj Mahal could remain a part of the Atlantic City skyline for the foreseeable future. If not, it will be the fifth casino to close this year, leaving Atlantic City to start 2015 with only eight operating casinos.
Pruning the Market So Others Can Thrive
Although these closures are a result of fewer people going to Atlantic City and playing in its casinos, analysts say that they’re the beginning of a stronger, healthier gambling market for Atlantic City. It’s Darwin’s theory of survival of the fittest applied to businesses. When the weaker competitors die off and exit the market, the stronger players have less competition among consumers and can attract a larger portion of the market share.
As some studies suggest, this could actually be a great thing for Atlantic City’s gaming market. It’s all about building the right-sized market for the city’s current consumers. When there are fewer people buying a product, the providers have to restrict its supply. The day the gate closes for good at the Taj Garaj will signify the official end of the Trump era, even if all that remains of his reign is his name.