ATLANTIC CITY, N.J. (AP) — New Jersey wants stricter licensing requirements for companies that handle Internet gambling deposits and payments, in the hope it would make banks more willing to let online bettors use credit cards.
Banks' reluctance to allow credit card use is one of the main things holding back the growth of New Jersey's new Internet gambling industry.
Speaking Tuesday at the East Coast Gaming Congress in Atlantic City, state Senator James Whelan, a former Atlantic City mayor, said a bill introduced in February would require payment processors to obtain a casino industry service license.
Payment processors currently are only required to get an ancillary license, which is easier to get.
"We're hoping to do a bill that will require them to be licensed so that will maybe give some comfort to the financial institutions," Whelan said. "Hopefully the financial institutions that are scratching their heads about Internet gambling will have a little more assurance."
The aim is to get banks and other financial institutions to allow more of their credit cards to be used in Internet gambling in New Jersey.
"If it does that, then that's great," said David Rebuck, director of the New Jersey Division of Gaming Enforcement. "If that gives them some comfort, it works for us."
The division says MasterCard has approved 73 percent of attempted transactions in New Jersey since Internet gambling began in November, while Visa has approved 44 percent. American Express and Discover do not approve any such charges.
"We still have some work to do with our banks," said Keith Smith, president of Boyd Gaming, which owns half of the Borgata. "We have to assure them that we know who our customers are, that they are placing their bets in New Jersey and that we are taking the bets here in New Jersey."
Since its launch in late November, the growth of New Jersey's online gambling industry has stalled. Last month, revenue fell to $11.4 million from $11.9 million in March. It was the first monthly decline the nascent industry had experienced after fairly rapid growth.
So far this year, Internet gambling has taken in $43 million in New Jersey. Gov. Chris Christie initially estimated it would bring in $1 billion in its first year, but his state treasurer recently acknowledged the numbers are coming up far short of that estimate. Wall Street analysts expect online betting to bring in about $200 million in its first year in New Jersey.
Alternative payment methods, including automated clearing house transfers, and electronic payment services like Neteller and Skrill, are picking up some of the slack.
Wayne Parry can be reached at http://twitter.com/WayneParryAC