Just how bad is it in Atlantic City?
Considering the casinos there were making more money when Bill Clinton was presidential timber than they made last year, pretty bad. And that’s land-based and Internet combined.
The Internet part at least will get better.

Analysts are doubtless correct in cautioning investors not to read too much into the results the state published this month covering the first 37 days of real-money online play. As they point out, the $8.4 million recorded over this period (25 November-31 December), while disappointedly shy of the $10 million-$15 million they’d forecast, has to be balanced against some widely reported technical snags players encountered in accessing the sites and the refusal by most major banks to honor credit card deposits. 

Fourteen casino and poker sites affiliated with seven casinos were live during the period, but a lot of slot machine content wasn’t immediately available. The two sites affiliated with the Golden Nugget weren’t fully operational until 13 December. The casinos have been slow as well in getting their marketing in gear and their mobile applications up and running.
So while no one is taking these five weeks as a benchmark it’s obvious the market has a ways to go to hit even the low side of first-year revenue estimates—$200 million to $500 million, currently—and this takes into account the addition of an eighth licensee, Resorts Casino Hotel, which might have added $750,000 or so to the initial reporting had it been operational, assuming it would’ve come in around the mean. 
Beyond that, Caesars Entertainment is running six sites affiliated with three of its four casinos and probably won’t spend to develop and license anything for the ailing Showboat. It’s possible the $2 billion Revel will join the fray, but what was supposed to be Atlantic City’s category-killer has struggled with the town’s sagging fortunes, and the hedge funds that own it are looking for a buyer and trying to avoid a second trip in less than two years into the shelter of the U.S. Bankruptcy Code. 
At the other end of the Boardwalk, PokerStars parent, The Rational Group, had wanted to buy the Atlantic Club as a base for an internet operation, but there was legal hangover from the Black Friday indictments—and intense opposition from Caesars—and the Isle of Man-based company was denied a license. In December, the casino and its hotel were sold at auction by a federal bankruptcy judge to Caesars and the Tropicana for $23 million, the lowest price ever paid for an Atlantic City casino, and promptly scrapped for parts and the land. Some 1,800 people lost their jobs, and it’s not likely the e-gaming sector will ramp up quickly enough and significantly enough to prevent more. The market is suffering through seven straight years of declining gaming revenue, it’s down 45 percent since 2007, and it finished 2013 at $2.87 billion, a performance last seen 22 years ago.
“Although some market participants will benefit, New Jersey online gambling is not going to be the savior of the casino market,” Fitch Ratings said in a recent report. “In some ways, it will be detrimental because it has kept brick-and-mortar supply in the market when the level of demand dictates that some supply should be removed.”
The good news is it does appear to be attracting new money. Official figures show more than 155,000 player accounts had been created as of 12 January. Signups in the new year were up 23 percent at that point and were averaging 2,400 new accounts per day. 
Thomas Winter, the Golden Nugget’s vice president of online gambling, said more than half the customers at his two sites were not bricks-and-mortar regulars, and he expects that to grow to 60-70 percent of the business.
Speaking earlier this month, Keith Smith, president of Las Vegas-based Boyd Gaming, which co-owns market leader Borgata Hotel Casino & Spa with MGM Resorts International, said 60 percent of Borgata’s two poker sites and one casino site had not visited the property in more than a year, and more than 75 percent had made fewer than two trips. Online and land-based poker play combined was up more than 40 percent in December from December 2012.
“So it’s a different customer,” said Tom Balance, Borgata’s chief operating officer. “It also skews more male than the conventional brick-and-mortar customer.” 
The yield per individual account has trailed below $60 in the early going, which is modest, relatively speaking, but not so surprising in a market where poker has figured prominently to date. Not every operator is running poker, yet revenue from the games still made up 38 percent of the market through the first five weeks. For those offering poker it was 43 percent.
And this points up the all-consuming power of branding in cyber-world.
Borgata and Caesars Interactive together accounted for more than 73 percent of revenues through the first reporting period. Borgata and its platform partner, bwin.party, grabbed 45 percent of the market, and poker generated slightly more than half of that. The ratio was about the same for Caesars and its partners, 888 and Amaya, which together market two poker sites. (Borgata is also live via Party Poker with a mobile app for Apple iOS devices.)
Geo-location rejections, one of the biggest problems experienced early on, have been attributed mainly to weak wi-fi signals. This is likely to emerge as an ongoing problem in more populous states. 
New Jersey’s operators were preparing a partial fix in the form of a wi-fi boosting dongle. It’s been reported that Borgata/Party Poker and Caesars/888 were sending these out to players free of charge in formats compatible with Windows XP and Windows 7 and 8. Other operators are following.
Problems with bank rejections will be more difficult to resolve.
Payment-processing has been illegal in the United States since the passage in 2006 of the Unlawful Internet Gambling Enforcement Act, and despite the advent of regulation most of the big institutions still refuse to touch the business for the sake of a single state, or three, at least not without something bullet-proof by way of approbation from Washington.
American Express even prohibits the use of its cards within casinos. 
“Historically, these industries account for disproportionately high levels of card-member credit losses and customer service disputes,” a spokeswoman told The Wall Street Journal.
Visa and MasterCard will process online-gambling transactions where it is legal, but major national card issuers, J.P. Morgan Chase and Bank of America among them, and several leading regional lenders, say they don’t allow it either.
The reasoning, as one of the heads of compliance with the American Banking Association explained: “Banks are weighing the risks and rewards of allowing this small population to conduct limited transactions that could cause a whole lot of trouble down the road if something goes wrong. They have to do the math and see if it’s worth it to flip the switch or not.”
For New Jersey it remains, in the words of chief regulator, David Rebuck, the “biggest issue”.