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Igaming’s Negative Impact on New Jersey’s Economy, Despite Tax Gains



Assessing Igaming’s Economic Influence: New Jersey’s Pivotal Study

New Jersey’s Igaming: A Mixed Economic Bag

The National Economic Research Associates (NERA) has released a thought-provoking study on New Jersey’s igaming sector, revealing a nuanced economic impact. Despite significant tax contributions, the igaming industry emerges as “detrimental” to the state’s economy, especially when weighed against the backdrop of problem gambling and limited employment benefits.

Igaming’s Tax Contributions Versus Societal Costs

NERA’s findings highlight igaming’s robust tax revenue stream for New Jersey, lauding its “positive effect” on government finances. This tax boon stems from specific state levies, igaming’s high-margin nature, and efficient tax collection methods. However, the fiscal upside is marred by significant social costs associated with problem gambling, diluting these financial benefits.

Limited Employment Opportunities in Igaming

In sharp contrast to land-based casinos, igaming employs far fewer people, leading to a reduced economic multiplier effect. NERA’s analysis shows that igaming’s contribution to the “cycle of wages” and subsequent economic activity in New Jersey is minimal. The limited workforce in igaming translates to less income being circulated back into the local economy.

Comparing Sectors: The Economic Ripple Effect

NERA’s detailed breakdown of expenditure across igaming, land-based casinos, and non-gambling activities reveals stark differences. The igaming sector contributes only 4¢ per dollar to wages, compared to 12¢ in land-based casinos and 39¢ in other recreational sectors. This discrepancy underscores the reduced economic activity resulting from igaming’s dominance.


Land-based Casinos: A Positive Economic Force

Unlike igaming, land-based casinos in New Jersey are seen as a net positive for the state’s economy. Their significant employment and tourism allure, coupled with deep ties to local hospitality businesses, ensure a robust flow of money through the economy. These casinos act as a vital economic engine, contrasting with the limited impact of the igaming sector.

Conclusion: Reevaluating Igaming’s Role in New Jersey’s Economy

The NERA study serves as a crucial wake-up call, prompting a reevaluation of igaming’s role in New Jersey’s economy. While its tax contributions are undeniable, the broader economic and social implications paint a more complex picture. Policymakers and stakeholders must carefully balance the fiscal benefits with the sector’s broader economic and societal impact.

Jerome, a valuable addition to the Gamingo.News team, brings with him extensive journalistic experience in the iGaming sector. His interest in the industry was sparked during his college years when he participated in local poker tournaments, eventually leading to his exposure to the burgeoning world of online poker and casino rooms. Jerome now utilizes his accumulated knowledge to fuel his passion for journalism, providing the team with the latest online scoops.

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