N.J. gives final OK to Internet betting
December 22, 2012
ATLANTIC CITY, NJ — New Jersey lawmakers gave final approval Thursday to a bill legalizing Internet gambling within the state’s borders.The bill now goes to Gov. Chris Christie, who vetoed a similar but not identical measure last year that would have made New Jersey the first state in the nation to legalize online betting. Nevada and Delaware have since passed online gambling bills, but have not set a date to begin taking bets.State Sen. Raymond Lesniak said he hopes New Jersey can beat other states to the punch and start taking bets by the end of April if Christie signs the measure quickly. He and most other supporters of the bill say it is a crucial tool to help Atlantic City deal with increasing competition from casinos in neighboring states.“Without the revenues from Internet gaming, at least one Atlantic City casino, and likely others, will have to close, costing thousands of jobs,” Lesniak said. “With New Jersey being the firstest with the mostest in the nation on Internet gaming, those jobs will be saved, thousands of high tech jobs will be created, and Atlantic City will become the Silicon Valley of e-gaming.”But there’s no guarantee Christie will sign the bill. He voiced doubts over last year’s bill’s constitutionality and the possibility of illegal betting parlors popping up. He has not indicated whether he will sign the current bill, and a spokesman did not immediately return a message seeking comment Thursday.Tony Rodio, president of the Tropicana Casino and Resort and head of the Casino Association of New Jersey, said the city’s 12 casinos look forward to the start of online gambling, which he estimated would take between six months to a year to get up and running once the governor signs the bill.“In addition to the jobs it would create and the tax revenue it would generate, the passing of this legislation is critical for the Atlantic City casino industry’s ongoing revitalization efforts,” he said. “It would set us apart from all other gaming jurisdictions.”The bill would legalize the online playing, for money, of any game currently offered at the 12 Atlantic City casinos, including poker. In order to comply with a requirement of the state Constitution that casino gambling be conducted only in Atlantic City, all computers, servers, monitoring rooms, and hubs used to conduct the online gambling, must be located either in a restricted area on the premises of a casino, or in a secure facility inaccessible to the public off the grounds of a casino but within the city limits of Atlantic City.The location issue was one that Christie cited when he vetoed an Internet gambling bill last year. But supporters of the bill have since solicited testimony from top legal scholars that having the computer and other equipment located in Atlantic City would be enough to comply with the Constitution.“Most everything else has migrated to the Internet and taken advantage of the consumer and revenue options it offers, and New Jersey’s gaming industry should be no different,” said Assemblyman Vincent Prieto. “This is a carefully crafted bill designed to ensure Internet gaming on casino games is offered the right way.”Several other changes to the bill also were made since last year, including one provision that would have sent some of the proceeds to the horse racing industry, which Christie opposed. The governor has said repeatedly he wants the horse industry to stand on its own without subsidies — something horse owners say is becoming nearly impossible without letting them offer casino gambling as tracks in other states do.And the bill includes harsh penalties for anyone setting up an unlicensed back-room Internet betting operation. Violations would be fined $1,000 per player per day for making a premises available for placing illegal Internet bets, and $10,000 per violation for advertising that a premises may be used for such a purpose.The bill would tax Internet gambling revenues at 10 percent, up from the 8 percent that the casinos pay for money won on their premises.It would impose an initial licensing fee of $200,000, plus additional annual fees of $200,000 to be split between state casino regulators and programs treating and combating compulsive gambling.The bill would require that players be physically present in New Jersey, and that state regulators have access to technology that would verify a player’s physical location when placing or cashing out a bet. But it also contains a provision that would let New Jersey casinos take bets from outside the state if the New Jersey Division of Gaming Enforcement determines that doing so would not violate federal law. It also would allow such out-of-state bets if they were part of an interstate compact that does not violate federal law.Lesniak said the bill gives the state between three to nine months to get Internet gambling up and running.New Jersey is racing to expand the number of ways in which its residents can legally gamble. In addition to the Internet betting bill, the state is also engaged in a lawsuit with the major professional and collegiate sports leagues over its intention to offer sports betting, despite a federal ban on it in all but four states. It also plans to let casino patrons use hand-held mobile gambling devices while on the grounds of a casino hotel.The moves come as Atlantic City, which recently lost its ranking as the nation’s second-largest gambling market after Nevada to Pennsylvania, continues to lose market share, casino revenue and jobs. In 2006, Atlantic City’s casinos took in $5.2 billion; last year that had fallen to $3.3 billion, and this year’s total will be lower than that.