The Truth Behind Legalized Online Gambling and Job Growth

atlantic_city_skylineLegalized online gaming has gotten off to a rocky start in the United States.

The industry’s early struggles, partially due to outside forces and partially due to a few self-inflicted wounds, have led to widespread criticism from supporters and detractors. However, these criticisms have overshadowed some of the positive aspects legal online gaming has brought to the New Jersey, Nevada, and Delaware markets.

One of the untold success stories of legal online gaming in the U.S. has been job creation.

How many people work in online gaming?

Online gaming is unfairly branded as an automated industry; an industry that needs very few workers, and even fewer skilled workers, particularly once the sites are up and running. This is simply not the case.

Online gaming sites are capable of creating as many jobs as a casino.

A spokesman for PokerStars said the company currently employs about 1,500 people globally across its many verticals. Furthermore, the company is constantly expanding and hiring. Right now you’ll be greeted with 70 or so available positions if you visit the PokerStars’ career’s page.

These jobs are not online exclusive.

According to a recent investigative report in Business Insider, Union leaders in New Jersey believe the addition of PokerStars in New Jersey would bring 1,000 jobs to the Garden State in the coming years, with 400 or so stemming from the company’s plans to build a $10 million poker room at the Resorts Casino in Atlantic City.

And PokerStars isn’t just an outlier. Another example of a large-scale employer in the iGaming industry would be the online gambling company Bet365. The company is the largest employer in the English town of Stoke on Trent, with roughly 2,300 employees, which is a mindboggling number considering when Bet365 first launched in the year 2000 they had a total of 12 employees.

For comparison’s sake, when Trump Plaza closed in September 2014, 1,200 people were put out of work.

The Revel Casino employed 3,100 people when it was shuttered.

In 2014 Las Vegas Strip casinos employed 23,162 people in their casino departments – this number exceeds 100,000 when you include Food, Beverage, and Hotel departments.

Fact: Major online gaming companies such as PokerStars and Bet365 employ more people than many US casinos.

 New Jersey online gambling employment numbers

So just how many jobs has legal iGaming brought to New Jersey?

Thomas Winter, the Vice President of Online Gambling for Golden Nugget’s parent company Landry’s Inc., stated, “I reckon that if you take all NJ operators and third party vendors (payment processing, KYC, games, platforms, marketing, geolocation, regulatory and compliance),  NJ online gaming generate 600 – 700 jobs, 40-50% of whom are based in NJ.”

According to Jim Ryan, the CEO of Pala Interactive, a California based tribe that recently launched an online casino, PalaCasino.com, in New Jersey, “Pala Interactive has 40 employees specifically for online gaming in the U.S.”

WSOP.com’s Head of Poker Bill Rini said Caesars Interactive has relatively few employees, with the important caveat that the number is small because they share services with Caesars Entertainment: “We share legal, accounting, auditing, government relations, compliance, legal, IT, HR, and other services with Caesars Entertainment but they are not CIE employees.”

Rini also explained that because the company is on the 888 platform, “a lot the development and other similar resources [fall] outside of the CIE corporate structure.”

Using Winter’s calculations, the half dozen operators and their iGaming partners are responsible for about 300-350 jobs in New Jersey, and based on Rini’s comments, there are likely hundreds of employees in land based gaming whose duties now include online gaming.

Even more positive when you look to the future

As the legal online gaming markets mature, and when more states legalize online gambling these employment numbers will continue to grow.

Let’s not lose sight of the fact that New Jersey represents only 3% of the total U.S. population. If online gambling was legalized across the U.S. the 700 jobs created thus far would balloon to over 20,000.

One likely expansion point is in Pala Interactive’s home state of California . According to Ryan, “We estimate that the California online poker market could be as large as $600 million annually, ” and while Ryan wouldn’t offer up an estimate on the number of employees the company would need, he was confident that should an online poker bill pass the company’s employment would be “a multiple of the current organization.”

Winter, estimated future employment numbers in New Jersey could potentially double from market maturity alone: “The market size is expected to double within two to three years; by then New Jersey based jobs created by online gaming should exceed 500.”

Rini was also bullish on potential employment if and when iGaming expands in the U.S., “I think you can look at any of the overseas operators and the number of people they have as a good indicator of how many people a full US model could support,” Rini said. “The US could arguably be as large as the ROW market by itself so I think the numbers are going to be very close.”

If Rini is correct, Caesars Interactive, Pala, Golden Nugget and other operators could have employment rolls the size of PokerStars and Bet365.

There are plenty of ancillary jobs too

Direct employment is just one aspect of job creation; there’s also the ripple effect of all of this.

As Bob McDevitt, the President of Unite Here Local 54 Union in New Jersey, explained to Business Insider: “… PokerStars’ presence in Atlantic City would have a transformative effect on the local economy.”

“This is a catalyst kind of thing, McDevitt said, “They have a whole different book of business they could bring to the city that no one else has. It’s critical. It really is critical.”

What McDevitt is saying, is on top of hiring more people directly, the money spent by online gaming operaotrs to advertise and on marketing initiatives, requires salespeople, graphic designers, advertising execs, lawyers, and so on.

This money also gets pumped into the New Jersey economy as the sites buy radio and TV spots from local stations. The industry also requires more jobs in media to cover the industry, and leads to the creation of affiliate sites and more.

While it’s easy to focus on how many jobs a full US model would create at the operator level, the total number of jobs created inside and outside of the industry is a very real factor to consider, albeit one that is difficult to quantify.

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