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Firm cuts US online gambling estimate 30 percent

ATLANTIC CITY — Morgan Stanley lowered its estimate for the US Internet gambling market to $3.5 billion by 2017, down from a previous forecast of $5 billion.

The firm cited worse-than-expected technical issues but said it is optimistic about the new industry’s long-term prospects. It forecast an $8 billion market by 2020, versus its initial $9.3 billion estimate.

“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,’’ the company wrote.

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 6 technology designed to ensure that players are within New Jersey’s borders, and payment-processing options for players.

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Morgan Stanley said it sees the possibility of California and Illinois legalizing Internet gambling this year. But it does not expect Colorado, Louisiana, Massachusetts, Mississippi, and Ohio to do so.

Associated Press