DGE says no ‘systematic meltdowns’ a good sign for NJ Online Gaming in 2015

None would argue that New Jersey’s anticipation of an extremely affluent iGaming market grossly overestimated. No, online poker and casino gambling in 2014 did not generate anywhere near the original projections, but the state still has a very positive outlook for the year ahead. According to one high ranking official, the fact that the state’s online gaming systems suffered no “meltdowns” is a positive in and of itself.

David Rebuck is the Director of the Division of Gaming Enforcement in New Jersey. On January 2, Rebuck published a letter on the DGE website entitled: New Jersey Internet Gaming One Year Anniversary – Achievements to Date and Goals for the Future. In it, he details a brief history of the state’s online gambling market, extolling the fact that the Garden State was able to launch the most comprehensive iGaming market in the US, including online poker and casino gaming, in just 9 months’ time (Gov. Christie passed iGaming bill Feb 26, 2013 – operators went live Nov 25, 2013).

New Jersey Division of Gaming EnforcementRebuck admitted that, despite all the experienced gained in the last year, “Internet gaming is still in its early stages”, and that the industry’s three US regulators (including Delaware and Nevada) are still learning from each other’s mistakes, as well as successes.

He went on to exalt New Jersey’s online gaming operators and regulators for avoiding any major catastrophes over the first year. “From a regulatory standpoint, our system is working,” explained Rebuck. “There have been no major infractions or meltdowns or any systematic regulatory failures that would make anyone doubt the integrity of operations.”

The DGE Director said that, of the issues that did arise, they were all dealt with in a prompt and effective manner. “However”, Rebuck continued, “we are far from out of the woods.” He said that everyone with a vested interest in New Jersey’s iGaming market must remain “vigilant and be ready to take on new challenges as they come our way.”

The online gaming market evolved greatly in 2014. When operators first launched their respective internet poker and casino websites, the DGE had approved a total of 253 games across 16 authorized gaming sites. By the end of 2014, the number of games had risen to 423, although the number of New Jersey’s authorized online gaming sites dropped to 15.

Over the course of 2014, four of the state’s iGaming permit holders, Borgata, Caesars, Golden Nugget and Tropicana, have operated continuously. The closure of Trump Plaza in Atlantic City forced Betfair to jump ship, converting its license to Golden Nugget in November of last year, while Trump Taj Mahal’s Ultimate Gaming provider dropped out of the market altogether in September. Later in the year, Pala Interactive was approved to operate under Borgata.

As of Nov 30, 2014, the number of online gaming accounts in New Jersey had topped the half million mark at 506,172, and the Garden State controlled 90% of the US regulated iGaming market. Combining all revenue from the three regulated states, New Jersey has produced 75% of all interactive gaming revenue, despite being the last of those jurisdictions to go live with a respective market. Additionally, the state has produced 98% of all legal US online casino revenue. All told, from the date of New Jersey’s soft launch, Nov 21, 2013, through Nov 30, 2014, the total Internet gaming win was $120.5 million.

Rebuck said that it’s taken time for off-shore operators to become accustomed to US regulations. He believes that learning curve had a lot do with the pitfalls early on, but that it’s also helped “improve the industry and raise its standards,” including the introduction of the KYC (Know Your Customer) policy. He said there has been no evidence of underage online gambling since the new system was invoked.

Furthermore, a series of enhancements of the geo-location technology now has the system operating at an estimated 98% success rate, with the other 2% being termed ‘false negatives’. Payment processing is still a major issue, though, with just 73% of Visa and only 44% of MasterCard payments being approved. However, Rebuck revealed a “new credit card code has been created for legal online gambling transactions”, expected to go into effect this spring.

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