Citing declining physical casino revenues, the state of Pennsylvania is hoping to become the latest to offer legalized online gambling. It may happen, as recent analysis done by EConsult estimated that legalized online gambling in Pennsylvania could result in an annual revenue cashfall of $307 million. Keystone State officials should approach that figure delicately, since the three states to legalize online gambling prior to Pennsylvania are falling short of first-year revenue projections.
Legalized Online Gambling in Pennsylvania: Proceed With Caution
The timing of legalized online gambling in Pennsylvania is advantageous since it has three state models to follow – Nevada, Delaware and New Jersey – and can learn from the mistakes of each. When New Jersey became the third state to legalize online gambling in November, proponents had high hopes: The physical casinos in Atlantic City expected to net 1.2 billion, resulting in tax revenues of $180 million, for the first year. Currently, online casinos in New Jersey are on target for $34 million in tax revenues with the goal of $55 million in 2015, which are far from initial projections.
Identifying New Jersey’s Online Gambling Shortfall
So what went wrong in New Jersey that Pennsylvania will hope to avoid? Payment Processing was the chief reason. Federal law requires banks to block online gambling transactions. Additionally, major banks do not allow their credit cards to be used for deposits for online gambling, leaving players to use less convenient methods such as ACH and making deposits at the physical casinos. New Jersey also needed to find a failsafe way of verifying user identities to make certain players were of age. Technical glitches hampered users in the early days as well, which turned many away.
Legalized Online Gambling is Instabill’s Forte
Instabill has a long history of quality merchant services and has processed online gambling merchant accounts since its inception in 2001. The interest of channeling legalized online gambling into state revenue is a hot stove item discussed among many state governments. Have a conversation with an Instabill merchant account representative about an online gambling merchant account by calling 1-800-318-2713.