On Friday, David Rebuck, Director of the New Jersey Division of Gaming Enforcement (DGE), published a paper summarizing the one-year anniversary achievements of the state’s online gambling industry and providing a look forward to future goals.
Intrastate online gaming was legalized on February 26, 2013 and formally went live on November 25, 2013. The paper notes that four internet gaming permit holders – Caesars, Golden Nugget, Borgata, and Tropicana – have had sites up and running since day one, while a couple have fallen by the wayside. Ultimate Gaming, partnered with the Trump Taj Mahal, shut down in September, while Betfair transferred its operations from the now-closed Trump Plaza to the Golden Nugget. One provider was added in late November – Pala Interactive, which has partnered with the Borgata.
As of November 30th, 2014, a few days more than one year from the start of intrastate online gambling in New Jersey, over half a million accounts had been created.
Rebuck says in his report that one lesson the DGE and all those involved with online gambling learned was that it was more difficult than expected for operators to launch their sites in the regulated market. It was thought that, particularly for those who already had working software, it would be as easy as “flipping a switch,” but it took a lot more work than that.
He also writes:
From a regulatory standpoint, our system is working. There have been no major infractions or meltdowns or any systematic regulatory failures that would make anyone doubt the integrity of operations. The issues that have arisen have been dealt with appropriately just like in the brick-and-mortar casinos. However, we are far from out of the woods; we must continue to be vigilant and ready to take on new challenges as they come our way.
Geolocation technologies, Rebuck said, have been successful, properly placing someone within New Jersey 98 percent of the time. This is important because right now, only people located within state borders are allowed to play on New Jersey sites. Work continues to increase that number further.
One of the more interesting and difficult issues for New Jersey has been payment processing. Since the federal Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), banks have cracked down on permitting online gambling transactions. As such, it has taken some convincing to get credit card companies to let gaming transactions go through in New Jersey, even though it is totally legal there. Rebuck states that 73 percent of VISA transactions were approved during the year compared to only 44 percent for Mastercard. This looks like it will improve in 2015, as a new credit card code for gambling transactions is expected to go live in the spring. And contrary to fears from the anti-gambling side, chargebacks rates for online gambling were lower than for retail transactions.
Apparently, the rest of New Jersey’s regulations are working, as well, as there were absolutely zero reports of underage access to gambling sites and fraud detection seems to be working just fine. The report uses the example of Diana Zolla, who on April 30th, 2014, was arrested and charged with “theft by deception” for trying to get out of $10,000 in gambling charges by claiming her identity was stolen. An investigation revealed that she had, in fact, made the deposits herself; something that might not have been determined had their not been proper regulations in place.
For the future, the DGE sees one of its most significant areas for improvement to be in interstate and international gaming compacts. New Jersey law does permit for agreements with other jurisdictions to allow for cross-border online gambling, but so far, the state has not entered into any agreements. There have been talks with Nevada and the United Kingdom, but these are ongoing. Interstate compacts would be especially helpful in online poker, as the larger the potential player pool, the more players sites can bring to the tables.