There’s a war of words, and of studies, surrounding the economic impact legalized iGaming has on New Jersey’s economy.
The leading trade group for online gaming in the United States, iDEA Growth, shared research that challenges the National Economic Research Associates’ (NERA) conclusions about how legalized online gaming affects The Garden State financially.
iDEA Growth says that NERA's study made mistakenly used flawed and limited assumptions, which caused its researchers to greatly underestimate the financial benefits that online gaming brings to the state.
NERA Study Contradicts 2019 iDEA Study
This all started when NERA put a red pen to a 2019 study conducted by Meister Economic Consulting and Victor-Strategies, which iDEA had commissioned.
The 2019 study concluded that legalized iGaming added $2 billion to New Jersey’s economy between 2013 and 2018.
But after critiquing it, NERA concluded that iGaming would take away jobs and revenue from retail casinos and other gambling-centered businesses.
What Did The New iDEA Growth Study Find?
iDEA recently responded by re-commissioning Meister Economic Consulting, Victor-Strategies to carry out their new study. They also joined forces with Regulus Partners to analyze the NERA critique, which was released in 2023.
They returned a 44-page report titled, "A Comprehensive Analysis of NERA's Study on New Jersey's iGaming Economic Impact." It explains five main areas where NERA’s analysis falls short of research standards and uses oversimplified methods that they say mislead and are incorrect.
Some of the key points and claims made in the new iDEA Growth report include:
- NERA only used wage data from two licensed operators over three years, even though many more licensees were running operations over a longer period, offering various brands, platforms, and wage options.
- Research shows that iGaming boosts revenue for brick-and-mortar casinos and other entertainment sectors, but NERA incorrectly claims that iGaming takes revenue away from these sectors. NERA also overlooks how legal iGaming pulls revenue away from illegal online gambling sites.
- NERA attempts to calculate iGaming’s social costs by using a discredited 2023 British study. They apply questionable and exaggerated social costs from a European country to the U.S. market.
In a statement, Meister Economic Consulting Principal Alan Meister said, “NERA’s study is based on incomplete data, highly speculative and illogical assumptions, a lack of understanding of the U.S. gaming industry, faulty methodologies, and a flawed study that does not even apply to New Jersey, ignoring decades of existing literature and research on the subject of social costs of gambling,”
iGaming Going Strong in New Jersey
Regardless of the studies, iGaming revenue is rocketing in New Jersey.
According to iGaming Business, New Jersey's gambling revenue increased by more than 4% in August, compared to the previous year. Analyzers credit a record-breaking performance in the state's iGaming market.
iGaming revenue surged by nearly 28% year-over-year to reach $198 million.
Golden Nugget once again led the iGaming market, with skins like FanDuel, Betway, and BetRivers operating under its license.
People in New Jersey are allowed to gamble online (iGaming) and in land-based casinos, including poker, under the New Jersey Casino Control Act.
