Will New Jersey Legalize Online Gambling?

by Lou on January 19, 2010

Will New Jersey be the first state to legalize online gambling?

A bill would allow licensed New Jersey casinos, all of which are located in Atlantic City, to offer games such as poker online. This is something California grappled with last year, but made no headway with it.

According to state Sen. Raymond Lesniak, D-Union, the bill’s sponsor, “There are probably 500,000 online poker players in New Jersey alone. And we’re missing out on around $100 million in revenue.”

According to Lesniak, “The court said such activities must be restricted within the borders of a state,” Lesniak said. “We would restrict the games to New Jersey residents. And I believe that would satisfy that ruling.”
In addition to allowing “New Jersey residents to place wagers on casino games via the Internet,” his bill requires that the equipment used to operate Internet wagering be located in a restricted area of a casino hotel or in a secure facility off the premises of the casino hotel, “but within the territorial limits of Atlantic County.”

Lesniak added, “It would be a big boost to the casino industry in Atlantic City. It’s a bold move, and in this economy we need bold moves.”

The New Jersey Casino Control Commission reported that the state’s gaming industry took home $3.9 billion from gamblers in 2009, a 13.2 percent decline compared with 2008. It was the state’s worst year since 1997.

The act would take effect immediately upon being signed into law, and establish a model for intrastate online gaming that other jurisdictions could soon mimic. Permit holders would be required to pay an up-front licensing fee of $200,000, with renewals at $100,000. Operators will also be required to pay a $100,000 non-refundable deposit and $100,000 annual fee to treat compulsive gambling.

Joe Brennan, chairman of the Interactive Media Entertainment and Gaming Association (iMEGA), which pushed for legislation in New Jersey, said: “We’re happy that New Jersey has taken this issue into their own hands. New Jersey is recognized as having the toughest gaming regulators in the U.S., but as a leading gaming state with a long track record of doing things the right way, internet gambling will have a great home here and the opportunity to begin normalizing the industry.”

Highlights of the bill

  • Allows “New Jersey residents to place wagers on casino games via the Internet.”
  • Creates a Division of Internet Wagering under the direction of the state Casino Control Commission.
  • An annual tax of 20 percent will be levied on gross revenue from Internet wagering.
  • The Casino Control Commission and the New Jersey Racing Commission would allow the operation of terminals at racetracks at which “individuals who have registered to participate in Internet wagering may wager on games conducted at casinos in Atlantic City.” Those terminals would be identical in appearance to casino slot machines.
  • Requires that equipment used to operate an Internet wagering site be located in a restricted area of a casino hotel or in a secure facility off the premises of the casino hotel, “but within the territorial limits of Atlantic County.”

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