New research suggests that the U.S. may not receive the economic boom it expects from online gambling. New Jersey is a leader in legalizing mobile sports betting. It has collected hundreds of millions of dollars in taxes. Yet, economists warn that more gambling could cost as much in taxes. This raises concerns for other states considering similar actions. Platforms like IviBet login attract users. Yet, we need to look closer at their broader economic effects.
The Economic Impact of Online Gambling in New Jersey
A report seen by the Guardian estimates that New Jersey’s surge in digital gambling has cut economic output. It has also cut jobs and wages. This challenges the industry’s claims that legalizing online gambling benefits states.
The Campaign for Fairer Gambling commissioned the research. It found that in 2022, people spent $2.4bn gambling online in New Jersey. This “decreased New Jersey’s economic activity by about $180m.”
The Economic Ripple Effect: How Spending on Other Activities Outshines Digital Gambling
The money could have been spent on shopping or dining. NERA Economic Consulting estimated it would have paid more in wages. This would have boosted the economy.
In 2022, New Jersey’s online gambling sector paid $110 million in wages. It generated $22 million in new spending. NERA projected that $2.4 billion spent on other activities could have led to $1 billion in wages and $200 million in new spending.
The report said that digital gambling does not have the same positive effects. These effects occur in other optional industries.
The Hidden Costs of Digital Gambling: Social Impact vs. Economic Gains in New Jersey
NERA estimated this. Online casinos in New Jersey contributed $385 million in taxes in 2022. This was up from $42 million five years earlier. Still, a UK study found that problem gambling costs New Jersey $350 million. These costs include healthcare, welfare, homelessness, and crime.
The Campaign for Fairer Gambling wants reform, so they hired NERA to review a report by iDEA Growth. iDEA Growth includes FanDuel and DraftKings. iDEA’s report said online gambling in New Jersey made $2 billion in economic output. It created 6,552 jobs and $401 million in wages. Additionally, it paid $259.3 million in taxes from 2013 to 2018.
NERA found that online gambling hurt New Jersey’s economy. The report overlooked the benefits. Other industries could have derived those benefits from the same spending.
Derek Webb Questions the iGambling Boom. He Talks About the Hidden Costs of Legalizing Online Betting.
Derek Webb started the Campaign for Fairer Gambling. He argued that no one has studied the costs and benefits of legalizing online betting. The gambling gold rush in America got out of hand. This was because advocates for unfettered growth have dominated the debate, he said.
Online sports betting has grown since 2018. Then, the US Supreme Court struck down a decades-old law that banned the practice in much of the US. Mobile sports betting is now live and legal in 28 states and the District of Columbia.
Some states have legalized digital gambling “based on false assumptions,” Webb claimed. Years later, the public learned that the sector’s sunny forecasts were too hopeful.
Industry Defense: iDEA Challenges NERA’s Report on Online Gambling’s Economic and Social Impact
Jeff Ifrah is the founder and general counsel of iDEA. He stated comparing the iDEA report to the NERA report is akin to comparing apples to oranges. The iDEA report focused on the money gains from online gambling. The NERA report looked at its social costs.
Ifrah stated that NERA’s analysis overlooks many crucial roles in legal iGaming. He said NERA’s conclusions need to be more accurate. They ignore job growth in New Jersey’s legal iGaming market.
He also noted that without legal iGaming. Consumers would turn to illegal offshore sites. These sites offer no player protection or economic benefits to the state.
New Jersey’s Attorney General runs the office and oversees the State’s Gaming Regulator. The office declined to comment.
Conclusion
The debate is over the effects of online gambling in New Jersey. It shows how hard it is to balance making money with potential social costs. The industry talks up big economic benefits. Yet, the costs and trade-offs make the picture complex. Scrutiny is vital. More states are thinking about legalizing and expanding online gambling.