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Analyst: New Jersey Online Gambling Market To Grow

A gaming analyst from the firm Janney Montgomery Scott has opined that he believes New Jersey's online gambling market will grow, but noted that it may take some time for revenues to reach lofty heights.

The opinion comes from Brian McGill, who says that he predicts that New Jersey online betting numbers will likely be higher than the $200 million range that others have predicted for the Garden State's initial year of cyber betting. He said that the numbers may fall in near the $1.8 billion range for annual revenues once it is all sorted out.

Speaking to a group of investors McGill said, “We still think that online gaming will ultimately grow into a meaningful driver of revenues in New Jersey. But it will take some time to see it ramp.”

McGill feels that the Borgata resort could make up 20% of the New Jersey online betting market in terms of revenue. The Boyd Gaming owned resort would benefit most from this prediction, although IGT (who provided 32 online slots to Borgata) would also clean up nicely.

Peggy Holloway, an Investor Service Analyst at Moody's concurred with that opinion, noting: “As a single-asset company, Borgata stands to benefit more from incremental revenue from online gaming. Operating margins will be about 10% to 20%, but startup costs will likely lead to operating losses for at least the first year. Nevertheless, online gaming is a much-needed boost for a market that has suffered protracted declines in gaming revenues amid increased competition from neighboring states and weak consumer gaming demand.”

The news is not so rosy for Delaware, which has seen low numbers of both punters and money wagered though its online gambling market. Only 2,800 punters have registered accounts to date, wagering $3.8 million total. Since its launch, Delaware has averaged less than 50 online gamblers per day statewide.

By contrast, Nevada has seen an average of 200 online pokers per day, and New Jersey has registered more than 75,000 accounts since launching online gambling on November 21st.

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