Moody’s on board with online gaming

Moody’s Investors Service said today that it likes the state’s decision to become the third state to allow internet gambling.

The move, the credit rating agency said, provides “a credit positive addition to state tax revenue.”

The state is projecting that online gambling could add $180 million to casino revenues in the coming fiscal year.

“The amount, which may be optimistic, would reduce a key area of state budget risk,” Moody’s said in its weekly Credit Outlook.  “In fiscal 2013 year-to date, poor revenue performance has opened a $350 million budget gap for the state, of which underperforming casino revenues make up 12% ($44 million).”

The bill calls for a 15 percent tax on the revenues from online gambling, and will allow the state to claw back lost casino revenue from competition in New York, Connecticut and Pennsylvania.

But despite the positive review, Moody’s cautions the state may not want to celebrate its found money too soon.

“Given the lack of historical data available for estimating online gaming revenues, the budget will remain vulnerable to potential over-projection of this new resource,” the report said.

Delaware was the first state to legalize online gambling in June 2012, with Nevada following suit last month. Similar bills have been introduced in Mississippi, Iowa and California and are under consideration in other states. Delaware estimates an additional $9 million of tax revenue in its first full fiscal year after implementation while Nevada has not released public estimates of online gaming revenue there.

Moody’s on board with online gaming