It turns out online gaming is not the royal flush the Christie administration hoped it was being dealt.

Online Gambling Sites (Bruno Vincent, Getty Images)

Initial numbers indicated casino tax revenue would be boosted by $200 million with the help of Internet gambling, but earlier in this fiscal year that projection was lowered. On Tuesday, the state treasurer said the projection has been reduced dramatically again.

"In total we had projected $160 million of increase in the casino revenue tax," said State Treasurer Andrew Sidamon-Eristoff. "We're now taking that down by $126 million, so you can do the math."

The lowered projection means New Jersey is now expecting a $34 million boost in casino tax revenue this fiscal year.

Why the reduction in expected revenues? Part of the problem is it took longer than expected to get the regulatory structure for online gaming in place.

"We've seen very, very strong interest in online gaming," Sidamon-Eristoff said. "We have 200,000 accounts having been created through January. We're pretty bullish on this in the medium to long term, but clearly this hasn't met our expectations for the first fiscal year."

How did revenues fall so short of estimates? Maybe the state got some bad information.

"We were told by industry at the time that the introduction of online gaming would help energize Atlantic City's ongoing recovery," Sidamon-Eristoff said. "We were told that online gaming among other things would generate a certain amount of excitement and collateral economic activity, gaming activity."

The budget plan Gov. Chris Christie proposed Tuesday includes a projection for a $54 million increase in casino tax revenue for the fiscal year that starts July 1.