New Jersey Looks At Extending Online Gaming Market To 2033

September 16, 2022
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An Assembly committee has unanimously agreed that internet gaming in New Jersey should be allowed to continue for another decade, as playing slot machines or table games online has become an integral part of the gaming experience in the Garden State.

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An Assembly committee unanimously agreed on Thursday (September 15) that internet gaming in New Jersey should be allowed to continue for another decade, as playing slot machines or table games online has become an integral part of the gaming market in the Garden State.

New Jersey legalized internet gaming in 2013, but under the current law, the authorization is set to expire in November 2023, ten years following the operative date of the original authorization. Assembly Bill 2190 would extend that deadline to 2033.

Online gaming “is one of the reasons that we still have casinos in Atlantic City,” Assemblyman Don Guardian, a Democrat and former Atlantic City mayor, said in support of the bill during Thursday’s Assembly Tourism, Gaming and Arts Committee hearing.

“I think for the future of our gaming industry and their commitment to Atlantic City, internet gambling is critical for the long term, Guardian said. “So by extending this [law] they have the security so they know that sports and internet gaming will be part of their overall opportunities to provide gaming to the public.”

The state legalized online gambling as Atlantic City casinos struggled after they lost about 40 percent of their revenues as other states, including Pennsylvania and New York, expanded gambling.

Guardian said internet gaming has been very good for Atlantic City and based on the amount of taxes the state collects, it is very good for the state as well.

New Jersey imposed a 15 percent state tax on internet gaming gross revenues, which is paid into the Casino Revenue Fund. An additional investment alternative tax of 2.5 percent is also applied. Casino taxes fund a variety of social programs at the state level, including home healthcare, with some funds going to Atlantic City.

Total revenues from internet gaming were nearly $1.4bn in 2021, up 41 percent from the $970m reported in 2020. Total gaming revenues in New Jersey were $4.2bn last year and $2.6bn in 2020.

Committee chairman Ralph Caputo, a Democrat, and the bill’s primary sponsor said the legislation would not make online gaming permanent. As of late Thursday, the bipartisan bill to extend New Jersey's online gambling market does not yet have a Senate counterpart.

“We are going to extend it for ten years,” Caputo said. “We are going to look at this, monitor it, to see what is happening. In other words, once the brick-and-mortar casinos come back, we don’t know what impact that will have on total revenue or sports and internet.”

Caputo, a former Atlantic City casino executive, also expressed concern over the amount of marketing online gambling companies have been doing in New Jersey.

“There has been a lot of marketing of these sites to the point where it is almost obscene, as I’ve said before, and many people became addicted because of their isolation during COVID,” Caputo said. “So we got to deal with that part of the industry.”

The Office of Legislative Services was waiting for the bill to be filed Thursday before it advances to the next step in the legislative process, whether that is to another committee or to the Assembly floor.

As of late Thursday, the bipartisan bill to extend New Jersey's online gambling market does not yet have a Senate counterpart.

It is also unclear whether A.2190 will ultimately be the vehicle that extends internet gaming beyond the November 2023 expiration date, or whether an alternative proposal might be brought forward that includes additional regulatory changes beyond the ten-year sunset.

During its meeting on Thursday, the Assembly gaming committee also advanced Assembly Bill 402, sponsored by Caputo, that would require casinos conducting internet gaming in New Jersey to “prominently” advertise the name of their affiliated Atlantic City brick-and-mortar casino on all their online websites.

The two-page bill also requires the New Jersey Division of Gaming Enforcement (DGE) to review each licensee’s gaming site and internet gaming advertisement to make sure they comply.

Caputo admitted there were some people who would like to amend the bill, without naming those opposed to the current version, but he will work with those individuals to try and resolve any issues.

“Our main objective here is transparency and we will achieve that,” Caputo said.

Another gaming-related bill that advanced Thursday would include esports under internet gaming for the purposes of wagering on video game competitions and providing esports-specific permits to take bets on the games.

Under current law, certain esports events are considered sports events and wagers can be accepted by licensed sports-betting operators. Customers can wager up to $100 on esports, with a potential winning bet of up to $500.

“Esports is and will be the next big thing in gaming in the country and we’ve moved the ball a little bit with previous legislation and now we are opening it up even further in how we can expand this activity,” said Caputo, sponsor of Assembly Bill 4397.

Caputo noted that lawmakers still need to work out some language in the bill with the DGE and the state attorney general’s office, but he did not share their concerns during the half-hour hearing. Messages left with the DGE on Thursday were not returned.

Caputo added that Assembly members would work with both agencies to “make sure they clear up any interpretations that may lead to problems later.”

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