Online Casinos Have Boomed In NJ — But More Can Be Done For Problem Gambling

Written By David Danzis on November 15, 2023 - Last Updated on November 17, 2023
A man buries his head in his arms at a slot machine, representing an individual who suffers from a gambling problem. Experts believe New Jersey has done well addressing the issue, but more can always be done.

Online gambling in New Jersey has grown by leaps and bounds since the first internet casinos went live at 9 a.m. on Nov. 26, 2013. The number of online casinos in NJ, annual gambling revenue and state tax collections have all increased in the last decade.

But so, too, have instances of problem gambling in the Garden State. And, while NJ is viewed as an industry leader in terms of implementing and requiring NJ responsible gambling measures, the state has plenty of room for improvement in terms of how it addresses problem gambling, according to mental health professionals.

Felicia Grondin, executive director of the Council on Compulsive Gambling of New Jersey, said there is an emerging need for additional funding and resources. When asked if the state — which collected nearly $250 million in taxes last year from just online casinos and more than $526 million from all gaming segments combined — is paying enough attention to problem gambling, Grondin was matter of fact.

“No. From the Council’s perspective (the state) is not doing nearly enough,” she told PlayNJ. “There are millions and millions of dollars that are being generated as a result of gambling opportunities in the state of New Jersey, but hardly anything is devoted to problem gambling prevention and treatment.”

NJ online casinos should contribute more to problem gambling services

The 2012 law permitting legal online casino gambling in NJ requires license holders to pay an annual fee of $100,000 toward problem gambling programs. Atlantic City casinos have funneled money toward problem gambling initiatives since the 1980s, primarily via forfeited funds and penalties imposed by state gaming regulators.

The federal government, which spends billions of dollars on substance abuse prevention and treatment across the country, provides nothing for gambling problems to any state.

New Jersey ranked 19th among 42 legal gambling states in terms of per capita public funds allocated for problem gambling services, according to a 2021 survey published by the National Association of Administrators for Disordered Gambling Services.

“That comes out to about 34 cents per person in the state of New Jersey, which is shameful,” Grondin said. “It’s really, really shameful.”

According to public data, NJ allocated $3.05 million for problem gambling services in fiscal year 2021. The CCGNJ received roughly $2.1 million of that total.

The NJ gambling industry generated more than $4.7 billion in the 2021 calendar year.

New Jersey: High-risk gambling behavior three times the national average

The financial disparity is concerning to organizations like the CCGNJ and the National Council on Problem Gambling, which continue to push for additional funding and resources to combat destructive behaviors.

It is even more of a pressing issue, they say, considering the prevalence rate of high-risk gambling behavior in New Jersey is three times the national average, according to reports published by the Center for Gambling Studies at Rutgers University in 2019 and 2023.

Both reports note the ease of access and 24/7 availability of online gambling are contributing factors.

Keith Whyte, executive director of the National Council on Problem Gambling, said even though NJ has hit the 10-year milestone, it is still a relatively young market.

“New Jersey is in the middle of a big learning curve on how to truly address problem gambling,” he told PlayNJ, “and is experiencing some of the growing pains as they move towards a comprehensive statewide gambling addiction prevention, education, treatment, enforcement, responsible gambling, research and recovery system.”

An increase in problem gambling was somewhat predictable given a well-established correlation following gambling expansion elsewhere, Whyte said.

“This was not unexpected as research from the UK and other jurisdictions shows that online gambling is associated with higher risk for gambling problems, and that gambling problems take time to manifest,” he said.

“And since problem gambling is generally not well covered by public health systems or private insurance in New Jersey — or any other state — it was predictable there would be an increase in the rate and/or severity of problems.”

Over 10 years, NJ has found ways to continue expanding problem gambling resources

State gambling regulators are cognizant of the potential for online gambling to exacerbate problem gambling issues.

New Jersey has taken several steps to curb problem gambling by enhancing its responsible gambling measures. In the last year alone, NJ has made it easier for people to self-exclude from betting, appointed a statewide responsible gambling coordinator, established advertising standards for casinos and sports betting companies, and required operators to monitor online betting for at-risk behavior.

David Rebuck, director of the NJ Division of Gaming Enforcement, said everyone involved, from operators to advertisers to sports leagues (in terms of internet sports betting), has an obligation to reduce the risks of problem gambling.

“Can the State of New Jersey do more? I think this administration (of Gov. Phil Murphy) has made it clear from the Attorney General on down that we’re going to do more. We have to do more,” Rebuck said. “If we don’t, the Achilles heel of internet gaming or internet sports wagering will be problem gambling.”

Rebuck said he appreciates organizations such as NCPG, which have issued recommendations to the state and which his department has implemented.

“Give me your action plan and give me your basis for what you suggest we do and how you believe it’s going to work,” he said. “Don’t just give some flippant response that we’re not doing enough…We’re ready.”

Whyte: ‘Follow New Jersey’s lead’ on responsible gambling

Whyte said the NCPG recommended Internet Responsible Gambling Standards to several jurisdictions. New Jersey was the first, and only, jurisdiction to adopt the measures.

“Everyone should follow New Jersey’s lead on the responsible gambling side — adopting the IRGS, requiring operators to share data and screen for markers of harm,” Whyte said.

“On the problem gambling side, it is imperative that states allocate their gambling tax revenue dollars to make sure that a comprehensive system of gambling addiction prevention, treatment, research and recovery services is in place.”

Echoing Grondin’s earlier point, Whyte said: “A jurisdiction with billions in gambling revenue should also be at the top of the list of public funding to mitigate harm from gambling problems.” Referencing the 34 cents per resident that NJ spends on problem gambling treatment initiatives, Whyte said the national average is only about 40 cents.

He went on to add:

“It is always more ethical and cost-effective to prevent a problem before it starts, which requires extensive school-based and community-focused programs just like for alcohol and tobacco. So we would encourage awareness and education campaigns that focus on online gambling and use all the modern digital tools to reach those who are gambling online.”

Similarly, Grondin said that while more funding is certainly needed and always welcome, there are other steps NJ can take to mitigate problem gambling issues. She recommended stronger advertising guidelines, public service announcements highlighting what she described as the “dark side of gambling,” and more responsiveness on the part of state lawmakers.

“We’re frustrated because we’re neutral on gambling and we’re here to help the problem gambler,” Grondin said.

“It just seems like tax revenue supersedes the public good. I mean, that’s really what it comes down to. We’re not here to create any enemies. We appreciate everything that the industry does and has done up until now for problem and responsible gambling. But more needs to be done.”

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David Danzis

David Danzis is the lead writer for PlayNJ. He is a New Jersey native and honors graduate of Rutgers University. As a newspaper reporter for the New Jersey Herald and Press of Atlantic City, David earned statewide awards for his coverage of politics, government, education, sports, and business. Today, he is PlayNJ’s Atlantic City “insider” and gaming industry expert on casinos, sports betting, and online gambling. David lives in Atlantic County, NJ with his wife and two children.

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