The gambling boom in the state of New Jersey has been hurting the state’s economy, a new study has shown.
Last year, sports betting and internet gambling set new records in the Garden State, earning more than $171.5 million in revenue from online table games and slot machines. In comparison, the casinos and horse tracks took an estimated $1.62 billion in horse betting revenue. Despite the impressive gains, new research shows that the upside has just as steep of an upside.
“New Jersey, which led the charge for mobile sports betting’s legalization, has received hundreds of millions of dollars in taxes from the sector. But economists cautioned that the cost of higher problem gambling rates could be ‘roughly equal’ to the state’s takings,” reported The Guardian.
Fans gather at William Hill Sports Book at Ocean Resort Casino to place legalized sports bets on Super Bowl Sunday for the first time ever on February 03, 2019, in Atlantic City, New Jersey. (Lisa Lake/Getty Images for William Hill US )
New Jersey’s digital gambling surge has also seen a drop in jobs and wages, with the Campaign for Fairer Gambling finding that the $2.4 billion spent in gambling led to a $180 million decrease in New Jersey’s economic activity. The study found that the money would have been better spent on other economic activities like shopping or dining, leading to an increase in wages that could have been spent in other parts of the state’s economy.
“The online gambling sector paid some $110m in wages to New Jersey employees in 2022, according to NERA, generating $22m in new spending across the state’s economy. Had another recreational activity attracted the same $2.4bn, NERA projected this would have led to about $1bn in wages, generating $200m in new spending,” noted The Guardian.
The study’s findings will likely lead to intense scrutiny of legalized gambling proposals in other parts of the country.
On top of the decrease in economic activity, the study showed that an increase in tax revenue would be outweighed by the social costs of problematic gambling in the state, such as “healthcare, welfare, homelessness, and criminal justice.” In 2o22, the state gained $42 million in net taxes, but the social costs of gambling could amount to an estimated $350 million.
Fans gather at William Hill Sports Book at Ocean Resort Casino to place legalized sports bets on Super Bowl Sunday for the first time on February 03, 2019, in Atlantic City, New Jersey. (Lisa Lake/Getty Images for William Hill US )
Derek Webb, founder of the Campaign for Fairer Gambling, said that the promise of an online gambling surge has not been properly vetted.
“America’s iGambling gold rush got out of hand quickly because the debate has been dominated by advocates for unfettered proliferation,” he told The Guardian.
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