New Jersey Online Gaming
On February 26, 2013, Gov. Chris Christie signed the New Jersey Casino Control Act into law, creating a regulatory framework for online gambling in the Garden State. Three weeks earlier, Christie had conditionally vetoed the legislation, asking for minor changes to the bill 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 the bill became 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 U.S. 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 are required to verify that players are physically located in New Jersey.
In May 2013, the Division of Gaming Enforcement announced proposed regulations for online gambling. 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.
In June 2013, the New Jersey Division of Gaming Enforcement wrote to the 12 land-based casinos in Atlantic City, telling them they would be given until June 30 to arrange supplier deals to provide online gaming. After 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.
In September 2015, the Division of Gaming Enforcement approved a partnership between Amaya Gaming, parent company of PokerStars, and land-based casino Resorts AC. The approval cleared the way for PokerStars to re-enter the U.S. online poker market for the first time since Black Friday in April 2011. PokerStars launched for real-money play on March 21, 2016.
New Jersey officials had hoped online gaming would generate about $180 million of tax revenue per year. In the first 27 months, the sites have contributed a total of only $45.5 million to the state coffers. However, the state continues to see revenues increase on a month-by-month basis. State taxes on online gambling sites grew to $22.4 million in 2015, a 21.1% increase over 2014 revenues. The state netted a record $2.2 million in February 2016, the most recent month of reporting as of press time.
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