TRENTON — Gov. Chris Christie’s administration admitted Tuesday it had overplayed its hand on online gambling, drastically overestimating the amount the state would bring in during the first year.
Christie had proposed a spending plan last year that anticipated a $200 million increase in tax revenue from the casinos, almost all of it from the legalization of internet betting that began in November.
State Treasurer Andrew Sidamon-Eristoff later cut Christie’s estimated increase to $160 million. But Tuesday he conceded even that was far too high, and now expected just a $34 million rise in casino tax revenue for the fiscal year that ends June 30.
“We were told by the industry at the time that the introduction of online gaming would help energize Atlantic City’s ongoing recovery,” Sidamon-Eristoff said.
He said he remained “bullish” on internet betting in the future, “but clearly this hasn’t met our expectations for the first fiscal year.”
And next year won’t be much better either with the budget Christie unveiled Tuesday — a $55 million increase in casino revenue.
State Sen. Raymond Lesniak (D-Union), the Legislature’s prime supporter of internet betting, said he always thought the governor’s projections were too ambitious.
Lesniak said he anticipated the state would make about $60 million in tax revenue from online betting because it was set to start five months into the fiscal year and would need time to build momentum.
“The governor just ignored those sensible economic thoughts,” Lesniak said. “He totally threw them out the window.”
Atlantic City casinos have been struggling since 2006 with competition in neighboring states. The casinos made less than $3 billion last year for the first time in 22 years. Many hoped online gambling could give a real boost to the industry.
Gambling analysts had far lower expectations than Christie, and some have said they found the start to internet betting to be rather slow. The casinos won $7.4 million in December and $9.5 million in January.
There have been some bugs with technology, which was designed to ensure players are in New Jersey, and with payment processing.
Many credit card issuers reject online gambling transactions.
“For all of those reasons, the rollout has been slower than anticipated and the resulting revenue has been lower than projections,” said Gene Johnson, senior vice president for market researching and online studies at Spectrum Gaming Group. “It’s going to be very interesting to see how it plays out.”
Staff writer Salvador Rizzo contributed to this report.