ATLANTIC CITY, N.J. -- The first week of Internet gambling in New Jersey went well, according to the state's top casino regulator, who says he finally stopped worrying about it.
By Wayne Parry
"I'm pleasantly pleased," said David Rebuck, director of the state Division of Gaming Enforcement. "I'm also very tired because for the last seven days, all I've been doing is worrying this was going to crash." It didn't. Between Nov. 21, when a test of Internet gambling began, and last Thursday, 37,277 accounts had been set up, enabling people to win or lose money on card games, table games and slots - all from computers or smartphones. That, of course, was the whole point of New Jersey's law making it the third state to legalize Internet gambling, after Nevada and Delaware. It is designed to bring new money to Atlantic City, whose 12 casinos have been struggling with increasing competition from casinos in neighboring states. Since 2006, Atlantic City's casino revenue has fallen from $5.2 billion to just over $3 billion last year. The first reports of how much money gamblers lost online in New Jersey will be issued in January. Rebuck said it was far from a sure thing that Internet gambling would be ready for widespread use when the test began. "There was definitely tension," he said. "At each of the casinos, there were 30, 40, 50 people working on this. On the first night, there were a lot of frowns, people looking to get through that first night. By Sunday night, I saw a lot more smiles. That's when I knew it was probably going to be OK." Six casinos - the Borgata Hotel Casino & Spa, the Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, the Tropicana Casino and Resort, Bally's Atlantic City and Caesars Atlantic City - offer online gambling. The Golden Nugget Atlantic City is expected to join them within a week. One of the biggest problems many users experienced at the start of the test period was being rejected by complex technology designed to verify that they are within New Jersey's borders, a key requirement of the law. The geolocation technology, which uses data including the identification of a computer's Wi-Fi network and the location of reception towers near a cellphone, is working as it should, according to regulators and technology providers. Anna Sainsbury, CEO of GeoComply, said adjustments to the technology used by most of the New Jersey casinos offering Internet gambling have reduced the "false negative" rate to about 10 %. That means only one in 10 users will wrongly get an error message saying they are not in New Jersey, even though they are. That is 25 % below the level of false negatives Nevada experienced when it launched online gambling earlier this year, she said. Sainsbury said the technology is now accurate "to within a few meters," and most users along the state's borders should be able to log on and gamble. Before the launch, several technology providers said they deliberately set their electronic fences back an unspecified distance from the border to guard against someone in New York or Pennsylvania being able to gamble in New Jersey. In a real-time demonstration last week at the gambling enforcement division's offices, her company displayed a map of New Jersey splotched with many blue balloons and a few red ones. Blue ones represented online customers who were able to log on and gamble; red ones were would-be gamblers who were rejected, either because they were using illegal software to mask their true location or had some other issue with establishing where they were. The densely populated Hudson River waterfront was filled with blue balloons, representing gamblers who passed the location tests and were betting. They included scores of users in Hoboken, including a few right on the water's edge. Similarly, the Delaware River coast in New Jersey across from Philadelphia was dotted with successful users, as well. In West New York, a red balloon marked an unsuccessful would-be gambler who needed to turn on his computer's Wi-Fi. Someone trying to log on from outside a restroom on Island Beach State Park also was rejected. The biggest problem now facing would-be online gamblers is funding their accounts. Credit card companies are uneven in their approval rates of transactions into gambling accounts, with MasterCard approving nearly eight times the amount Visa was during the first week, regulators said. Direct bank transfers were the most successful means to fund accounts in the early going, they said.