Report: Online Gambling Pumped $2B Into New Jersey Economy

Online gambling has been a runaway success in New Jersey, but according to a newly published report, NJ online gambling and poker is more successful than most people imagine.

The report, titled Economic Impact of New Jersey Online Gaming: Further Lessons Learned, was commissioned by the industry trade group, iDEA Growth. The research was carried out by Dr. Alan Meister of Meister Economic Consulting and Gene Johnson of Victor Strategies. The study (the report can be downloaded here) builds upon the findings of a previous study commissioned by the group in 2017.

Topline Findings in the iDEA Growth Report

The pair looked at the New Jersey online casino and poker industry from its inception in November 2013 through 2018. They concluded online gambling in New Jersey has led to economic output of $2 billion, more than 6,500 jobs, and $250 million in tax revenue for the state.

“As a result of the upfront capital investment in New Jersey iGaming facilities, equipment, and technology, and the ongoing annual operation of iGaming, there have been significant positive impacts on the New Jersey economy,” Meister and Johnson write.

The figures come from a combination of direct and indirect output.

“Not only is there the contribution of iGaming itself, but also secondary effects come about as player expenditures are subsequently spent by the gaming operators and then re-spent by suppliers and all employees throughout the economy.”

Those effects work out to:

• $2.0 billion in output (i.e., value of sales);
• 6,552 jobs (i.e., full-time equivalents);
• $401.0 million in wages to employees; and
• $259.3 million in tax revenue to state and local governments (including $178.9 million in iGaming taxes)

2018 Was a Banner Year

According to the report, online gambling in New Jersey was responsible for 1,851 jobs and $104.8 million in wages to employees in 2018 alone.

2018 saw the addition of online sports betting to New Jersey’s expanding buffet of gambling options. Launched in August, online sports betting was an immediate success and has had a profound impact on online casino revenue.

2019 Shaping Up to Be Even Better

As noted above, online casino revenue benefitted from online sports betting activity, but it took several months for the impact to be realized.

Total online casino revenue in 2018 was close to $300 million. Total online casino revenue in 2019 is on pace to be near $490 million. So whatever positive impacts (jobs, wages, taxes), the report found for 2018 would have been much higher if it was held a year and included 2019.

The Model for Online Gambling or an Outlier?

It’s safe to say online gambling has exceeded expectations in New Jersey in just about every way imaginable.

There’s not a lot to add to the visual of Figure 7 and Figure 8 from the report, so I’ll just let them speak for themselves.

The report does note that New Jersey’s online gambling success hasn’t been replicated in the two other early adopter states: Nevada and Delaware.

“New Jersey iGaming has experienced strong and relatively steady revenue growth since the opening of iGaming operations in November 2013. However, Nevada and Delaware, which also inaugurated iGaming in 2013, have not approached the commercial success of New Jersey in terms of registered player counts, gaming revenue, and tax revenue. While New Jersey would be expected to generate higher revenue due to its larger population base, the state’s more open and robust business model has been a strong factor contributing to its success.

“New Jersey’s revenue performance has far exceeded the difference in population between it and the two other states which have been operating iGaming for the same length of time. Nevada offers only Internet poker and Delaware runs iGaming operations for three casinos through a central provider administered by the Delaware Lottery.”

To illustrate the point, I’ll include a third chart from the report here.