Online gambling is coming to New Jersey, for better or worse.
Chris Christie signed a bill which legalized online gambling in Atlantic City late February.
The Governor initially vetoed the bill because of concerns about transparency and taxes. The text was amended by lawmakers and passed the legislature with overwhelming support. Christie received the seal of approval.
These are the basic details of the bill.
Online gambling will be legalized in Atlantic City casinos. The license will only be granted to the 12 Atlantic City casinos. Other organizations cannot offer internet gambling and will be subject to severe fines. All internet gambling facilities must be within the city limits. Only bets received from an Atlantic City server will be legal.
To place wagers, players must be physically present in New Jersey. New Jersey could develop agreements with other states that allow internet gambling in the future. Before accepting wagers, the casino equipment must verify that players are located.
All games that are available in casinos can be played online. For comparison, Nevada allows only poker. This bill will not protect sports betting, but New Jersey is trying unsuccessfully to block the federal statute that prohibits legalization.
The bill contains many provisions to curb gambling addiction. It requires the prominent display and tracking of player losses in order to identify and limit those who might be exhibiting addictive gambling behavior.
Online gambling revenue will be subject to a 15% tax. Although the Christie administration claims that this tax will generate $180 million in state revenue, some analysts believe this figure is significantly overestimated.
The official regulations that the bill required the Division of Gaming Enforcement produce were published on June 3, and subject to a public comment period until August 2, before being finalized. These regulations include information about how casinos obtain the necessary licenses, and the procedures for maintaining security on their gambling sites’ networks.
Online gambling will therefore be a benefit to the state.
The decline in revenue from Atlantic City casinos has been evident for seven years. Online gambling may be the solution. Casino revenue has declined from $5.2 billion down to $3 billion since 2006. Online gambling could become a $500 million-$1 billion industry in New Jersey. This would be enough to save Atlantic City’s struggling casinos. Online gambling could be a very valuable source of revenue for the state, even though estimates vary on the amount of tax revenue. Casinos will have to also pay a tax for the Casino Reinvestment Development Authority. This will help struggling casinos in Atlantic City.
Low overhead costs can mean higher prizes for the player and more chances to win. Casinos offer free chips that are low-cost and give players more chances to win. Online gambling allows players to gamble more conveniently and with less travel.
The bill’s goal is to increase the number of people visiting brick-and-mortar casino. However, it is difficult to know if this will happen. It is possible that it will make people less likely to visit the casinos. However, this seems unlikely as online gambling takes away the social aspect and the free drinks. Research shows that internet gaming doesn’t reduce casino gaming, at least not in the case of poker. Online gambling sites will allow advertising for the host casino, which may encourage players to visit the site but can also cause frustration for them.
Gambling online could prove to be a serious problem for those suffering from gambling addictions. It can also lead to the development of gambling addictions. This can raise moral and financial concerns. Even with all the precautions required by the bill, it will be difficult to stop compulsive gamblers from placing bets online.
However, it will take a while for casinos to actually launch their online gambling services. Once the regulations are finalized, casinos will need to apply to licensure to develop their gambling websites. This means that the casinos won’t be able to make any new revenue in the 2013 summer season. It could be the most difficult season since Sandy recovery.
New Jersey has already placed its bets. But only time will tell whether online gambling will prove to be a success or failure.