The Wall Street firm cited worse-than-expected technical issues in its projection, but said it’s optimistic about the new industry’s long-term prospects. It forecast an $8 billion market by 2020, compared to its initial $9.3 billion estimate.
“While we remain bullish on the online gaming opportunity in the U.S., we are lowering our estimates to better reflect the insights we have gained following the first few months of operations in New Jersey, Nevada and Delaware,” read a Morgan Stanley statement
It also lowered its first full year estimate of New Jersey’s Internet gambling revenue from $541 million to $203 million, citing continuing issues with geo location technology designed to ensure that players are within New Jersey’s borders, and payment processing options for players. The company said it believes those issues will be resolved over time but added it is reducing its month-to-month growth estimate for New Jersey to 10 percent instead of 20 percent for the remainder of this year.
Fitch Ratings is sticking with its $200 million forecast for New Jersey this year. “Fitch believes an interstate online poker agreement signed by Delaware’s and Nevada’s governors on Feb. 25, 2014 will accelerate state-by-state proliferation of online gaming,” the company wrote on Tuesday.