The Associated Press reports that only about 42% to 46% of all credit card transactions attempted by New Jersey's online gamblers are being accepted. The AP was given the figures by CAMS LLC, a company used by the state to route electronic payments.
"Single Biggest Thing That's Holding It Back"
CAMS LLC handles electronic transactions for the online sites associated with Borgata Hotel Casino & Spa, The Trump Plaza Casino, and the Trump Taj Mahal Casino Resort. Matt Kat, CEO of CAMS LLC, says the single largest issue holding back online gambling in New Jersey is the continuing struggles with tech support.
Internet gambling has brought the state of New Jersey about $31.6 million in revenues. When an online gambling bill was still in the legislature, Governor Chris Christie suggested that Internet gaming might bring the state $1 billion in revenues in its first year. These days, Wall Street financial analysts have adjusted the numbers down to closer to $200 million.
Projections Were Not Met
The lower-than-expected earnings have been traced to a number of explanations. The geolocation technology which tells the licensed online websites which state a player resides was faulty, so the website's administration often thought potential gamblers were in New York or Pennsylvania. PokerStars, thought to be capable of making Resorts Casino's website the bigger poker room in the New Jersey market, had its licensing suspended, so one less major competitor is not accepting players.
The geolocator issue was solved with tech fixes in February. PokerStars eventually will enter the New Jersey market. But several experts believe the single biggest issue holding back the online casinos in New Jersey are the payment methods.
Credit and Debit Card Users Having Trouble
New Jersey Deputy Attorney General Mary Jo Flaherty, who helps oversee the state Division of Gaming Enforcement, says both credit cards and debit cards are not working. Flaherty says, "New Jersey patrons continue to experience difficulties in use of their personal credit and debit card accounts in funding individual Internet gaming accounts."
According to the NJ Deputy Attorney General, only 44% of VISA transactions are "going through". MasterCard, on the other hand, has a 73% success rate. American Express does not support New Jersey online casino or card room deposits.
VISA and MasterCard Are Major Deposit Methods
Such an issue is a serious problem, because of the prevalence of VISA and MasterCard payments on the Internet. Customers receive rewards for paying with credit, so they are given incentives to use their plastic. In fact, many people use their credit and debit cards exclusively, preferring to pay one bill a month and receive VIP rewards for this usage. They are in the habit of using credit cards.
When a gambler cannot use their VISA or MasterCard to fund their casino account, some are going to give up and stop trying at all. Others might develop an inherent distrust of the website involved, thinking a legitimate site would be able to handle such transactions. Others might assume the credit card company does not want to be involved in online gambling, so the hobby is not legit.
VISA Never Works, Says One Gambler
Jon Hernandez, an average New Jersey online gambler, was interviewed about the deposit methods he uses when he gambles legally. Hernandez says his VISA transactions never work. "I always have a problem with Visa. They (online casinos) never take it. I tried to use it on three different sites and it never worked."
Some alternative methods are picking up the slack. Electronic payment services like Neteller and Skrill (Moneybookers) are trustworthy methods of funding an account, and they are helping some gamblers get started. Other players are using automated clearing house (ACH) transfers.
Still, a success rate of 44% is a bad record. Though the CAMS LLS CEO says a 44% success rate is comparable to the Nevada and Illinois state lotteries, which the company also supports, that becomes a large number of people who are not betting due to fixable technical difficultries. Credit card payments are the number one method of funding an account. When over half the transactions might not be working, that leaves a significant number of people who want to gamble, but don't. While it is assumed some of those gamblers use Skrill, Neteller, or ACH, a significant number probably find something else to do. Millions of dollars a month could be lost.
