New Jersey Study Finds Online Gambling Detrimental to State Economy

The National Economic Research Associates (NERA) conducted a comprehensive study on New Jersey's gambling market, shedding light on the controversial relationship between igaming and the state's economy. This research, commissioned by the Campaign for Fairer Gambling (CFG), paints a complex picture of the industry's effects.

The study's standout finding is the description of igaming as "net negative" for the New Jersey economy. Despite the industry's exponential revenue growth, the increased fiscal costs associated with problem gambling seem to offset the significant tax contributions made by the igaming sector. This raises questions about the long-term sustainability of this industry in the state.

One key issue highlighted by NERA is the limited employment opportunities within the igaming sector when compared to land-based casinos. With fewer employees and lower wages reinvested in the local economy, the study suggests that igaming may not be as beneficial to New Jersey's workforce and communities as initially thought.

NERA used a model to dissect the financial impact of igaming, land-based casinos, and non-gambling recreational activities. The results show that igaming contributes only 4¢ per dollar in wages, significantly less than land-based casinos' 12¢ and non-gambling activities' 39¢. This implies that money spent on igaming isn't as effectively circulated within the state.

While igaming boasts strong tax contributions, NERA emphasizes the importance of addressing the fiscal costs associated with problem gambling. Drawing parallels with the UK, the study warns that these costs could potentially outweigh the benefits of igaming's tax revenue, which raises concerns about the industry's overall impact.

In contrast to igaming, land-based casinos in New Jersey appear to have a more positive effect on the state's economy. They create more jobs, and the wages earned by employees circulate within the local economy, benefiting various industries. Additionally, the allure of Atlantic City's casinos attracts out-of-state tourists, further boosting New Jersey's financial well-being.

While the study acknowledges the strong tax contributions of igaming, it suggests that New Jersey should carefully consider the potential negative effects on its economy, particularly in terms of problem gambling costs and the limited economic activity generated by the industry. In contrast, land-based casinos continue to play a significant role in supporting the state's financial health.