The economic impact of New Jersey’s online casino industry has come under scrutiny in a recent report by The Guardian, revealing that the industry may not be as beneficial as initially expected.
Despite generating significant tax revenue for the state, the online gambling industry has had adverse effects on New Jersey’s economy. According to research commissioned by the Campaign for Fairer Gambling, $2.4 billion has been wagered online since 2022, contributing to a decrease of approximately $180 million in the state’s economic activity.
NERA Economic Consulting, which conducted the research, suggests that if the $2.4 billion spent on online gambling had been invested in other sectors, the benefits for the state would have been much greater. The consultancy argues that reallocating this money to other industries would have resulted in higher wages and increased spending across the state.
Additionally, a study by the National Institute for Economic and Social Research in London found that the tax revenue generated by online gambling was offset by the costs associated with gambling-related issues.
On the other hand, iDEA Growth, a gambling advocacy firm, has presented a contrasting view. According to their report, the online gambling sector has generated $2 billion in economic output, created over 6,500 jobs, paid out $401 million in wages, and contributed almost $260 million in taxes between late 2013 and 2018.
Derek Webb, the founder of Campaign for Fairer Gambling, expressed concerns that many states are legalizing online gambling based on false assumptions and overly optimistic promises from the industry. He believes that the debate has been dominated by advocates for unbridled expansion of online gambling.
In response to the NERA report, iDEA’s founder and general counsel, Jeff Ifrah, defended their research, asserting that it focused solely on the economic impact of online gambling. Ifrah argued that the NERA report overlooked the supportive roles and job growth within New Jersey’s iGaming sector and that without legalized iGaming, consumers would turn to illegal, offshore sites that offer no player protection or economic benefits to the state.
The report and responses have sparked a debate about the true impact of the online gambling industry in New Jersey, with stakeholders expressing divergent views on its economic benefits and costs. Despite the controversy, New Jersey’s regulator has yet to weigh in on the matter.