Trade body study “strongly refutes” previous research findings on New Jersey igaming
Research conducted by the iDevelopment and Economic Association claims original “highly speculative” study carried out by National Economic Research Associates used incomplete data
A study conducted by the iDevelopment and Economic Association (iDEA) on igaming in New Jersey has strongly dismissed claims from previous research carried out by the National Economic Research Associates (NERA).
Back in 2019, iDEA commissioned a report on the impact of online gaming in New Jersey, which was carried out by Meister Economic Consulting and Victor-Strategies.
That study, titled “Economic Impact of New Jersey Online Gaming: Further Lessons Learned,” showed igaming in the Garden State contributed more than $2bn in output to the conomy through value of sales.
The research also claimed online gaming had created 6,552 jobs, paid out $401m in wages to employees, and contributed $259.3m in tax revenue to state and local governments.
Conversely, NERA’s study, completed in November 2023, in conjunction with the Campaign for Fairer Gambling, determined igaming was a hinderance to New Jersey’s economy.
After analyzing the findings from NERA’s study, iDEA argued the report focused on comparing revenue from land-based and online gaming to other entertainment sectors in the state.
Consequently, iDEA released a counter-study report – “A Comprehensive Analysis of NERA’s Study on New Jersey’s iGaming Economic Impact” – with the research conducted by Meister Economic Consulting, Victor-Strategies, and Regulus Partners.
A section of iDEA’s report refers to NERA’s conclusions from its analysis, stating: “They estimate the aggregate impact of $1 in consumer spending to various industries and conclude that the igaming segment of the New Jersey gaming industry contributes relatively little to the New Jersey economy.
“NERA draws this conclusion because the igaming segment directly employs a smaller number of people than brick-and-mortar casinos or other industries. NERA translates less employees into lower total wages and subsequent spending by those employees.”
IDEA argued that the purpose of NERA’s research was solely to “criticize the findings from the 2019 report.”
The trade body further alleged NERA’s study “relies on simplistic methodologies that are misleading and inaccurate.”
According to iDEA, NERA based its wage-related data on information from only two licensed operators over a period of three years, despite there being many more licensees operating over a longer period with multiple brands and a wider variety of wage offerings.
IDEA also refuted NERA’s claims that igaming canibalizes revenue from land-based casinos and other entertainment sources, suggesting instead that legal igaming only serves to steer revenue away from black market operators.
Furthermore, iDEA dismissed NERA’s notion that the social cost of igaming can be accurately calculated, disparaging NERA’s source for this information as a discredited study on gambling-related harms and subsequent social cost carried out in Britain in 2023, which applies “dubiously derived and inflated social costs from a European country to the US market.”
NERA estimated that the social costs of igaming in New Jersey could be around $340m when basing calculations off of government programs and problem gambling statistics from the UK.
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 US 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.”
IDEA founder and General Counsel Jeff Ifrah added: “Unlike the NERA report, the Meister Economic Consulting, Victor-Strategies, and Regulus Partners study focuses on the economic impacts of online gambling by evaluating a wide cross-section of data from multiple sources.
“The NERA report focuses on the alleged social costs of igaming. Essentially, comparing these two reports is akin to comparing apples to oranges.
“The 2019 Meister Economic Consulting and Victor-Strategies study, which NERA attempted to refute, employed a robust methodology and complete data set to comprehensively assess the positive economic impact of igaming in New Jersey.
“The findings of the Meister Economic Consulting and Victor-Strategies study remain valid and provide valuable insights on the benefits of regulated online gaming for the state’s economy.”
New Jersey first regulated online casino back in 2013 and was one of the first states to launch regulated online sports betting when PASPA fell in 2018.