Move is ill omen for new online casino markets.
Online gaming provider Merge Gaming Network announced that it is no longer accepting bets placed from Delaware and New Jersey. Players using sites operated by Merge received e-mails informing them their accounts were “banned as per restrictions in your state.” The precise reason for the move is not yet known.
The exit is good for competitors in both states, with legalized online casinos last year in accordance with American gambling laws. However, it doesn’t bode well for state governments hoping that online casinos will become an important source of much-needed revenue.
Has online legalization been a disappointment?
Delaware has pulled in only $253,000 in public revenue since online casinos launched last October, compared to $7.4 million for New Jersey. While Delaware has a much smaller population, the figures are considered very disappointing.
The authorities originally hoped that American internet casinos operating in the state would produce $5 million annually. As it has averaged only about $125,000 monthly so far, that number looks very unrealistic.
Both states have had a difficult time convincing banks and credit card companies to process transactions related to online casinos. While it is legal on the state level many banks worry that it will incur the wrath of federal prosecutors.