New Jersey Online Gaming

In February 2013, New Jersey became the second state in the country to authorize licensed and regulated online casinos, and the third state to authorize licensed and regulated online poker rooms. New Jersey online casino operators can offer any game played in a brick-and-mortar casino. Only casinos with a license to operate land-based casinos in Atlantic City may operate an online casino. Only people who are least 21 years old and are physically located in New Jersey can play at an online casino.

Real-money online gaming debuted in November 2013. There are currently more than ten sites operating in New Jersey.

Problems with payment processing and geolocation have contributed to the less than expected online gaming revenue in New Jersey.

New Jersey had been seeking to legalize online gambling for the past few years. But those efforts fell short for a variety of reasons.

When the New Jersey State Senate passed online gambling bill AS2578 by a vote of 32-4 on December 20, 2012, it looked like New Jersey’s best – and last – chance to get online gaming in the near future. The bill, titled the New Jersey Casino Control Act, had already been passed by the Assembly on December 18.

On February 7, 2013, Gov. Chris Christie conditionally vetoed the legislation, asking for minor changes to the bill in order to garner his approval. The changes he recommended included a tax increase (on operators) from 10% to 15%, part of the proceeds going to compulsive gambling programs, and a 10-year sunset clause. The sunset clause dictates that the New Jersey Legislature – and Governor – will have to reauthorize the right for operators to offer online gaming in 10 years.

The Legislature amended the bill with Christie’s changes, and on February 26, 2013, Christie signed it into law.

Christie vetoed a different version of this bill in 2011, citing “legal and constitutional concerns” that the bill violated New Jersey’s Constitution, which only permits casino gambling in Atlantic City, and his opposition to supporting the horse racing industry through funds generated by online casinos. The new bill resolved both of the issues by removing the provision of $30 million in racing subsidies and obtaining expert opinions that as long as servers were based in Atlantic City, the Constitution wouldn’t be violated.

Additional legal support came late in 2011, when the US Department of Justice announced that the Wire Act only applied to sports betting. This new interpretation of the Wire Act cleared the way for states to pursue intrastate online gaming without fear of federal prosecution.

The bill tasked the New Jersey Division of Gaming Enforcement with creating standards for software and equipment used for Internet gaming. Casinos would be required to verify that players are physically located in New Jersey at every log-in.

In May 2013, the Division of Gaming Enforcement announced proposed regulations for online gambling in the state of New Jersey. In the draft, an initial $400,000 Internet gaming permit fee would be required of the licensees as well as an annual license fee of $250,000. There was a 60-day comment period for the proposed regulations, and final adoption will follow a review and response to comments.

In June 2013, the New Jersey Division of Gaming Enforcement wrote to the 12 land-based casinos in Atlantic City, telling them that they would be given until June 30 to arrange supplier deals to provide online gaming. In the time following the deadline, regulators would examine and review the qualifications and backgrounds of the companies partnering with the Atlantic City casinos.

In response to the comments made on the May 2013 regulation proposal, New Jersey regulators formulated changes aimed at enhancing players’ protection while playing via remote gambling sites.
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