New Jersey Lawmakers Consider Extension Of Internet Gaming Law Till 2033

January 16, 2023
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New Jersey lawmakers are expected to extend the state’s online wagering law for another decade during this legislative session as the existing law is scheduled to sunset next year.

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New Jersey lawmakers are expected to extend the state’s online wagering law for another decade during this legislative session as the existing law is scheduled to sunset next year.

Although sports betting gets most of the media headlines, the "real money" in terms of tax dollars when it comes to internet wagering in the U.S. is made via online casino gambling.

As is so often the case in this sector, New Jersey has been at the forefront of the action. In fact, 2023 will mark the tenth anniversary of the launch of online casino play.

It also means it is time for the New Jersey legislature to decide whether to renew the law that made such gambling a reality.

Consider that in the first 11 months of 2022, New Jersey had taken in $226.6m in tax revenue from internet gaming compared with $82.7m for mobile sports wagering, which accounts for just over 90 percent of the state sports-betting handle.

The rest comes from in-person bets at the state's three racetracks and nine Atlantic City casinos.

The roughly one-third of gross gaming revenue from online casino play that goes to the casinos provided an urgent lifeline to those entities during the COVID-19 pandemic that shuttered facilities and at other times limited visitation numbers in 2020-21.

Technically, the law does not expire until November 2023. But Bill Pascrell III, a lobbyist and strategic advisor to the gaming industry with the Princeton Public Affairs Group, said politics should accelerate action on this issue.

"There are lots of distractions this year," Pascrell III said, noting that all 120 seats in the state legislature are on the ballot this fall. State lawmakers typically take all of July and August off, and September and October will be the time for handshaking and photo-taking in each member’s district as they seek re-election.

That may be why state Senate and Assembly committees each held hearings last fall on the potential renewal of the law.

"There's really no scenario where internet gaming can ever go away,” Republican state Senator Vincent Polistina said. “Without having internet gaming, sports betting, these other amenities, Atlantic City would certainly suffer."

Assemblyman Ralph Caputo, a Democrat and chairman of the Assembly Tourism, Gaming and the Arts Committee, and colleague Don Guardian, a Republican assemblyman and the former Atlantic City mayor, also spoke in favor of renewal at that hearing.

Guardian said that online casino "is one of the reasons that we still have casinos in Atlantic City.”

The Senate committee advanced the legislation, which would add another ten years to the law, by a 5-0 vote, and the Assembly committee vote in favor was 7-0.

Is anyone not in favor of these bills, then?

The mostly overseas online casino operators who run the sites — which a decade ago were just pleased to get a toehold on a nascent U.S. market — now have grumbled mostly privately about why they should have to divert a significant chunk of their revenue to passive casino partners.

But there was no testimony from any operators at the hearings, and lawmakers, along with Democratic Governor Phil Murphy, are clearly pleased with the results of the partnerships as a backstop for the casinos.

The closure of five of Atlantic City's 12 casinos from 2014 to 2016 ravaged the South Jersey economy, with Atlantic County on several occasions leading the U.S. in home foreclosures in that era.

In fact, one lawmaker questioned why the original online law was not a permanent one, and why the new law does not do the same.

The only quibble about the law's renewal in the Senate hearing came from Felicia Grondin, the executive director of the Council on Compulsive Gambling of New Jersey.

She pointed out a need to increase staffing and funding for treatment, given the growing popularity of online casino gaming and its ease of access.

"We are competing with advertising that is so excessive and so aggressive, it's very difficult to compete with," said Grondin, who has six full-time staffers and what she said has been a “flat budget” since 2016.

“One can lose tens of thousands of dollars within minutes, simply by picking up their cell phones,” she added. “And it’s usually detected when it’s too late after people have lost their kid’s college fund; when they have lost their homes.”

Pascrell III noted that it might be difficult for online casino operators — operating on modest profit margins given the robust competition for customers in the state — to shoulder a major portion of the burden for funding problem gambling issues that encompass a number of other gambling sectors.

Caputo said that he hopes to see the bills go before the full Senate and Assembly in the coming weeks.

"We have time, but a lot of things can come up, so let's do it sooner rather than later," Caputo said.

Assuming the law is renewed, Pascrell III said it would send a positive message to states considering adding online casino gaming this year.

While Pascrell III acknowledged industry sentiment that New York and Indiana seem like the most likely candidates, he said as many as four other states might make at least some progress this year on the issue.

Online casino games are currently available in six states. Delaware, like New Jersey, launched in 2013 but only as part of the state's lottery. West Virginia, Pennsylvania, Michigan, and Connecticut have followed suit since 2019.

Nevada has also approved interactive gaming, but only for online poker games.

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