North Jersey – The Third Circuit Court of Appeals’ rejection two weeks ago of New Jersey’s petition to legalize sports gambling at Atlantic City casinos is described as a “net negative” in a filing released Friday by Moody’s.
Senior analyst Baye Larsen said the decision – which was reached on the conclusion that the New Jersey law runs afoul of the Professional and Amateur Sports Protection Act of 1992 passed by Congress and signed into law – “eliminates a potential new source of tax revenues and economic activity for the state.”
Of course, state sports betting advocates would say that the ruling delayed, not permanently denied, the gambling. But for now, Larsen’s depiction is accurate.
Sports betting in Nevada is popular, but Moody’s notes that Nevada only generated about $10 million in gaming tax revenue in 2012. That figure likely would be about $3 million annually in Larsen notes.
Of course, the indirect economic benefit from a state having sports betting is that it can lure tourists who spend most of their money on hotel rooms, dinners, drinks, and other entertainment offerings – all of which lead to more jobs (setting aside for the moment the lost jobs of those who wind up gambling too much).
Moody’s declaration of “credit positive” or “credit negative” does not connote a rating or outlook change. It is indicative of the impact of a distinct event or development as one of many credit factors affecting the issuer.
