A Wall Street credit rating firm that was among the most pessimistic about the prospects for Internet gambling in New Jersey has cut its already-conservative estimate on the state's first-year online winnings by more than half.
Tuesday's move by Fitch Ratings comes a day after New Jersey reported a third straight monthly decline in the amount of money won by the state's Internet betting operations, partnered with Atlantic City casinos.
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The online casinos won $9.5 million in June, and have taken in $63 million for the year.
That prompted Fitch to cut its estimate of New Jersey's 2014 Internet winnings to $120 million to $130 million, down from the $200 million to $300 million it had forecast in December.
"Several factors we had expected to drive sequential growth have not materialized, including a ramp-up in players' awareness of online gaming as a result of operators' marketing efforts," the company wrote in a note to investors. "The number of online gaming accounts increasing 8 percent in June to 378,564 from 351,136 in May, and tripling since December, has not translated into increased revenue. Other factors expected to drive growth include technology improvements, users' adaption to the available payment methods and the rollout of mobile products."
Fitch also took note of the casino consolidation slamming Atlantic City, where The Atlantic Club has already closed this year, The Showboat and Trump Plaza have announced plans to do so soon, and Revel could join them if a buyer is not found by early August.
The company said several of the closings appeared to have been delayed while their parent companies waited for Internet gambling to take hold in New Jersey.
Fitch also said additional risk is present for Atlantic City casinos if New Jersey lawmakers allow a casino in the Meadowlands near New York City in the next few years — something the state's horse racing industry and its northern New Jersey political backers have long wanted.
New Jersey began allowing Internet gambling in late November as a way to bring new customers and revenue to Atlantic City's struggling casinos.
Wayne Parry can be reached at http://twitter.com/WayneParryAC