New Jersey Moves Ahead on Online Gaming

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The New Jersey Senate bill S 490 has cleared the Senate Budget and Appropriations Committee yesterday by a vote of 10 for and 1 against. The next step is discussion and consideration by the full Senate, which is expected to take place by the end of this year.

S 490 was sponsored by Senator Ray Lesniak with the objective to bring online gaming to New Jersey. It was introduced in the Senate in January 2010. This bill will allow the Atlantic City land casinos to offer online versions of their games to residents of New Jersey and to customers outside the United States. These games include poker, blackjack and baccarat. In the Budget and Appropriations Committee S 490 was clubbed as a part of a package of Democrat-sponsored bills aimed at propping up the state's ailing horse racing and casino industries. If this bill is ultimately signed into law it would make New Jersey the first state in America to offer intrastate and international online gaming. After the success in the committee, Lesniak told the Cape May County Herald, "The revenues generated and jobs created are now going offshore to international gaming operators. S 490 will redirect those revenues to our casinos in Atlantic City and, under S 11, to build a bridge to self-sufficiency for our horseracing industry and help save its 13,000 jobs and $1 billion of revenues generated in New Jersey."

The Interactive Media Entertainment and Gaming Association (iMEGA) has worked closely with Senator Lesniak on drafting the bill and lobbying for its support. A study commissioned iMEGA has estimated that intrastate gambling in New Jersey could raise up to $250 million in gross gaming revenue and $55 million in taxes and fees on an annual basis. The bill proposes that the state collects 20% of annual gross gaming revenues as taxes.

Before the Senate committee hearing, Wagering, Tourism and Historic Preservation Committee lobbyist William Pascrell III stated in an interview to The Record that New Jersey was experiencing a recession coupled with an ailing horse racing industry and struggling Atlantic City casinos. The only solution lay through legalizing online gaming. He went on to say, "New Jersey could become a global Mecca for Internet gaming." Pascrell indicated that all regulatory and licensing issues could be addressed within six to nine months of the bill becoming law.

Lesniak and iMEGA are simultaneously handling other barriers to online gambling. They are contesting a motion by the United States Department of Justice to dismiss their attempt to overturn the 1991 federal law prohibiting state-regulated sports betting. They are also warding off challenges from the land casino giant Harrah's, which is in favor of a federal regulatory framework for online gambling and is lobbying against New Jersey's attempts to legalize online gambling at the state level.

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