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You may need to reboot your machine to complete the install, or at the very least try logging off and back on again. When you install Java it usually adds itself to your PATH variable which is only read when you first log on. This definitely the case for Linux and Windows and likely the case...

I see that there's a new update released. I'll run it and report back. Ran the update and although the launcher didn't exit at the end of the update the server started without trouble.

I ran the update this morning on my Debian server only to get this error. The first workaround suggested on the bug tracker didn't seem to work for me. I still had the problem, but the third workaround did the job for me.