ATLANTIC CITY, N.J. (AP) — Internet gambling will be "a shot in the arm" for Atlantic City's 12 struggling casinos, according to one Wall Street firm.
And a southern New Jersey lawmaker says letting people gamble from their computers or smartphones represents "the ultimate convenience gambling."
Two days after Gov. Chris Christie signed a bill making his state the third in the nation to legalize gambling over the Internet, New Jersey and those keeping a close eye on it were sizing up the benefits of the new law.
Moody's Investors Service said Internet gambling is much-needed help for the nation's third-largest gambling market, after Nevada and Pennsylvania.
"The law is a shot in the arm for the 12 existing Atlantic City operators, which have been struggling with weak gaming revenue trends amid new competition from neighboring gaming jurisdictions," said Peggy Holloway, a Moody's vice president.
"While we expect the new law to expand the pool of gamers, it is difficult to estimate how much growth it will generate for the New Jersey gaming market, which last year raked in about $3 billion of gaming revenue," she said in a report issued Thursday. "The new Internet capability will surely draw to gaming some people who don't currently visit casinos. Operators will also have the opportunity to offer online players incentives to visit their facilities in person. On the other hand, there is a risk that Internet gaming will partially cannibalize the brick-and-mortar casinos."
Assemblyman John Burzichelli, one of the sponsors of the bill, predicts Atlantic City will win back a significant part of the market that has abandoned it for options closer to home.
New Jersey is now offering "the ultimate convenience gambling," he said Thursday during an online seminar on the new law, sponsored by Spectrum Gaming Group, an Atlantic City-area consulting firm. "We're going to recapture some of that."
The loss of the "convenience" player is a big part of Atlantic City's casino decline over the last six-plus years. In 2006, when the first casino opened in Pennsylvania, Atlantic City's casino revenues hit an all-time high of $5.2 billion. Last year, they fell to just over $3 billion, marking the sixth straight year the casinos took in less than they had the year before.
The law restricts Internet gambling, at least for now, to players physically located within New Jersey's borders. But it includes provisions for allowing the state to join with other states or even foreign countries where Internet gambling is legal, provided that New Jersey gambling regulators approve. Betting won't start for at least three months and as long as nine months, depending on when the state Division of Gaming Enforcement feels the system is ready.
Holloway said New Jersey's new law offers players much more than the online poker recently legalized by Nevada; New Jersey players will be able to place online bets on any game currently offered at the casinos, including slots, roulette, blackjack and other table games.
She said Caesars Entertainment is likely to be the biggest beneficiary of the New Jersey law. It owns four of Atlantic City's 12 casinos, representing 40 percent of the market. It has strong brands in Caesars and the World Series Of Poker, and a relationship with 888 Holdings Public Limited Company, a popular online gambling company, she said.
Boyd Gaming and MGM International, which jointly own The Borgata Hotel Casino & Spa also stand to benefit, Holloway wrote.
"Borgata has a strong market position in Atlantic City and Boyd has a joint venture with bwin.party Digital Entertainment, one of the world's largest publicly traded online gaming companies, that operates the PartyPoker online brands" she wrote.
Since the New Jersey law was enacted, stock prices of many companies expected to be players in the online gambling market have risen. They include social media companies like Zynga Inc., which is seen as a likely online partner for casino companies interested in expanding online.
Dennis Farrell, a casino analyst with Wells Fargo Securities, estimated in January that online gambling in New Jersey could be a $1.5 billion annual business within five years.
Wayne Parry can be reached at http://twitter.com/WayneParryAC