New Jersey gambling bodies clash over benefits of iGaming

Long considered a boon to the state, the iGaming industry has come under fresh blows from the Campaign for Fairer Gambling, which addressed an old report by iDEA, a trade group, that has touted the benefits of the gambling industry to the New Jersey economy.

According to that earlier report, the economic impact between 2013 and 2018 for the state had been $2bn in sales along with 6,552 new jobs, $259m paid in taxes, and not least, $401m divided up in wages. Although the numbers look sound, the Campaign for Fairer Gambling disagrees.

According to the organization, the numbers are indeed accurate, but their main flaw has to do with the fact that in building a vibrant gambling industry New Jersey may have been taking away resources from other, more "productive" parts of the economy.

This is argued in a separate report commissioned by the organization from the National Economic Research Associates and comes four years after the original report published by iDEA.

In the new report, the Campaign for Fairer Gaming tries to outline how iGaming is an overblown benefit to the economy. For one, the report argues that iGaming tends to be a fairly low-cost activity for operators, and it hardly requires as many people employed as land-based gambling for example.

Land-based gambling, for example, helps cycle more money back into the real economy. The exact number of missed economic opportunities is put at $180m, a rather small but significant amount compared to the current benefits added to the state's economy.

The NERA report further argues that alternative recreation industries are, as the report puts it, "much more labor-intensive," which translates into more money being injected into the economy in real terms through job creation, wages, and overall tax collection. However, the authors also acknowledge that iGaming still has one strong advantage.

It provides much greater revenue back to the state than many other recreational activities. Yet, the conclusion is another blow to the industry.

"New Jersey primarily diverts money that would have been spent in other sectors in New Jersey," the report says and adds that there is a negative social impact that goes well beyond economic considerations, leading to increased spending on healthcare, welfare, and criminal justice, and causing a reported uptick in homelessness.

These byproducts are tied to iGaming in the report, and they negate the positive impact of increased tax revenue from gambling, the authors claim.

Any attempts to legalize iGaming moving forward in the United States should come with a cool and objective discussion about the actual benefits of the activity while avoiding becoming complacent and revelling in unrealistic projections that may prove detrimental to the economy, the report’s authors say.

This new report comes at a time when states as big as New York are planning to push ahead with the legalization of their iGaming, with Florida another prime candidate.

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