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Coming of Age

November marked the seventh anniversary of iGaming in New Jersey, the first state of any significance to introduce the industry, with no major issues to report.

Coming of Age

They say when you reach 7 years of age you’ve attained the age of reason. So up until 7 then, you can be a wild animal, with no sense of right and wrong, and no care in the world. And suddenly you’re of age and totally responsible.

Well, this could have described online gaming if it had gone off the tracks during those early years, but November marked the seventh anniversary of iGaming in New Jersey, the first state of any significance to introduce the industry, with no major issues to report.

Yea, I hear you, Nevada. Pipe down! Yes, you legalized online poker a couple of years before that, but really? In a state of just a few million, online poker is an afterthought. And the revenues are so low, the state is embarrassed to release the figures. So until Nevada adds a full suite of online gaming options like New Jersey, it’s in the minor leagues.

Seven years ago, no one knew what iGaming would do in New Jersey, particularly the regulators. While the state Division of Gaming Enforcement had consulted with European jurisdictions, there really was no clear pathway in the U.S. given the differing levels of regulations. The DGE was already requiring marketing affiliates to register as vendors, something never seen in Europe. But at the last minute, the DGE determined if you wanted to share revenues with the online casino—earn a percentage of a player’s losses—you had to get a higher, and much more expensive, level of license.

And who knew if geolocation was going to work? After all, on both sides of the state, there were massive population centers outside of New York City and Philadelphia that were separated by relatively narrow rivers. Could you really pinpoint where a player was with that much accuracy?

Turns out you can. Where there were some instances of bets being accepted from out-of-state locations, the vast majority of them were rejected.

Sheldon Adelson warned that children will get hold of Daddy’s credit card and play casino games. Well, that also turns out to be a fallacy because the stringent ID verification process prevented that from happening.

In the beginning, it was very hard to deposit or withdraw money. Over the last seven years, they’ve added more options, but in my opinion, this is still the Achilles’ heel of online gaming. I’m admittedly an older person and not very technology savvy. I’ve tried to set up an online wallet, deposit from my bank account, use an ACH check, even use PayPal, and none of them worked. The customer service reps at the online casinos had no suggestions to fix this other than trying a different method. Probably the best way for an old klutz like me was to use the option Pay Near Me, where I would go to my nearest 7-Eleven and physically give them cash to deposit into my account. Of course, 7-Eleven takes a rather usurious fee for the small amount I was depositing, so not the best option. I guess I need someone to hold my hand and walk me through the process, but this remains the most difficult remaining element for iGaming.

And what about those “skins?” And I don’t mean the Washington Football Team. Skins are brands that exist under the umbrella of an existing casino’s license and sometimes overshadow the existing casino. In New Jersey, DraftKings is included under the Resorts Atlantic City license. The DraftKings physical sports book in Resorts is very nice, but the app blows away any other app in the state in terms of revenue. Golden Nugget has been the leader in New Jersey because of how judiciously it allocates its skins.

Is the New Jersey market saturated with operators? When there are more than 25 operators, the answer would have to be yes. But those operators are getting valuable experience that will be translated to subsequent states that legalize iGaming.

Have there been rough spots over the past seven years? Of course. Blazing a trail sometimes takes you on a somewhat circuitous route. But eventually New Jersey found the right path, and for states considering legalizing iGaming, they would be wise to fall in behind the gold standard that this state has created.

As a New Jersey homeowner, I can tell you there’s not much that the state has gotten right over the 40 years I’ve lived there, but iGaming is one of them. So happy Seventh Anniversary to New Jersey’s iGaming industry, and I hope the age of reason will extend for the next 40 years.

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.

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