New Jersey’s licensed gaming operators would be mandated to disclose their businesses in other jurisdictions under a new rule being considered by state regulators.
The New Jersey Division of Gaming Enforcement’s (DGE) proposed regulatory amendments would broaden the agency's oversight of licensees’ activities by knowing what business the companies are doing outside the Garden State.
Licensed operators are already required to report upon any unregulated gaming activity in other markets, but the proposed rulemaking would add the definition of “foreign gaming” to state regulations. That definition would require gaming companies to disclose regulated gambling in other jurisdictions outside New Jersey.
Under a 30-page set of draft amendments, the DGE would require licensed casino and racetrack sportsbook operators to notify the agency within seven days of entering or exiting another jurisdiction. The proposed rule also would require reporting within seven days any time a licensed operator receives “a criminal and/or grand jury subpoena”.
The proposed regulation would define foreign gaming subject to reporting by New Jersey licensees as “the conduct of gaming outside of New Jersey in any country or political subdivision thereof and in any state or political subdivision of the United States, including tribal jurisdictions”.
The broader requirement regarding foreign gaming reporting is one of several regulatory changes proposed by the DGE in November. The comment period on the casino licensing regulations expired on January 3. The DGE has not released any of the comments it may have received prior to the deadline.
As of Friday (January 10), the new rules and several amendments dealing with sportsbooks at racetracks had not been approved. Once approved, the final regulations are published in the New Jersey Register.
“The DGE has no additional comment on the proposed regulations,” Allison Inserro, a spokeswoman with the DGE, told Vixio GamblingCompliance.
The proposed reporting requirements on foreign gaming activities would bring New Jersey in line with several other U.S. jurisdictions, specifically Nevada and Mississippi.
Jeremy Kleiman, a gaming law expert with with Saiber law firm in Florham Park, New Jersey, said he was not sure of the “precise reason” why the DGE is implementing a foreign gaming requirement now.
“It is possible there may have been recent investigations around licensees’ activities outside New Jersey that have given DGE concern, and they realize they may have a lack of visibility into activities outside New Jersey,” Kleiman told Vixio.
“The rule gives the regulator visibility into a casino licensee’s or racetrack sports wagering licensee’s activities in other markets (both regulated and unregulated) and may be an avenue to require disclosure of business partners and business associations that may reflect on suitability.”
Shortly after New Jersey approved casino legislation in 1976, Nevada regulators instituted their first foreign gaming reporting requirements, requiring Nevada licensees to get approval before operating in the Garden State. The reporting requirements were updated in 1997.
The passage of Senate Bill 266 during the 2023 legislative session removed the statutory requirements under Nevada Revised Statute (NRS) 463.710 that gaming licensees submit copies of all documents filed with regulators in other jurisdictions, as well as a an annual report regarding their compliance with gaming regulations outside Nevada.
Instead, the document requirement was replaced with a requirement to file a notice with Nevada regulators upon initiating gaming operations in another jurisdiction.
The requirement that licensees file annual operational and regulatory reports describing compliance with regulations, as well as audit and surveillance procedures related to markets outside the state, was also removed completely from the statute as a result of the 2023 Nevada legislation.
Licensees also have to notify Nevada regulators whenever “foreign gaming has entirely ceased”.
The underlying purpose of Nevada’s Foreign Gaming Act was to discourage casinos from contributing to any expansion of gaming that could threaten the reputation or status of the state’s largest industry.
At its meeting on Wednesday (January 15), the Nevada Gaming Control Board will consider granting initial approval to repealing Regulation 3.060 dealing with foreign gaming reporting requirements that are no longer needed due to the 2023 legislative changes. The decision would then go to the Nevada Gaming Commission for final approval.
The proposed Nevada regulation states that “all approvals of the (Nevada Gaming) Commission for involvement in foreign gaming granted pursuant to Regulation 3.060 prior to July 1, 1977, which were still in effect on that date shall remain valid until otherwise terminated”.