According to an Associated Press report, there is currently an eleventh hour effort in the works to legalize intrastate online gambling in New Jersey. State Senator Raymond Lesniak is attempting to push an online gambling bill through the state legislature and the hopefully get it signed by Governor Chris Christie by the end of the legislative session on January 9th.
A similar attempt was made by Senator Lesniak during the first quarter of last year, but Christie vetoed the bill in early March, citing, in part, his doubts that it would withstand a constitutional test. “In my view,” he said, “the creation of a legal fiction deeming all wagers to have ‘originated’ in Atlantic City cannot overcome the clear and unambiguous language of the State Constitution.”
But with the surprise clarification of the Wire Act by the United States Department of Justice (DoJ) just before Christmas, people feel Gov. Christie’s tune might change. For years, the DoJ claimed that the Wire Act of 1961 prohibited all internet gambling, despite a ruling by the Fifth District Court in 2002 which said that it only applied to sports betting. Last month, the DoJ clarified its stance on the Wire Act, confirming that it does, in fact, apply only to sports betting. With that pronouncement, there is the feeling that government officials such as Gov. Christie may soften on internet gambling, knowing that it is not looked upon as illegal by the Department of Justice.
Senator Lesniak’s 2011 bill flew through the state legislature before finally being vetoed by Gov. Christie, passing through the Senate by a 34-2 vote and the Assembly in a 63-11 landslide.
Interestingly, both the Poker Players Alliance and Caesars Entertainment, owner of the World Series of Poker, were against Lesniak’s original bill, feeling it would contribute to the fragmentation of the U.S. online gambling market. Instead, they believed, the focus should be on working towards legalization and regulation on the federal level.
The bill Lesniak is trying to move was actually introduced last summer and included changes to try to appease the Governor. One of Christie’s concerns was that a multitude of illegal betting parlors would crop up all over New Jersey, Lesniak included a clause which would impose a $1,000 fine per player per day on anyone running an illegal online betting operation, as well as a $10,000 fine for advertising these businesses.
Not just anyone would be allowed to offer online gambling if this bill passes. Only Atlantic City casinos would be eligible for online gambling licenses. This follows current state law, which requires that any gambling in the state occur in Atlantic City; to stay faithful to the law, any online gaming servers would have to be located there.
Additionally, to appease horse race tracks, which have been known to oppose competition for the public’s gambling dollar, Lesniak’s bill would earmark $20 million per year for three years for the race tracks, all of which will come from the internet gambling operators. Until last year, Atlantic City casinos paid race tracks $30 million per year, for which the tracks agreed to not have slot machines in their facilities.
Other details in the bill include $100,000 per year allocated towards problem gambling programs and a 10 percent tax on online gambling revenue.
There is currently no vote scheduled for the bill, but Lesniak is hopeful he will be able to get it done. “We can be the Silicon Valley of Internet gaming,” Lesniak told the Associated Press. “It’s the wave of the future. It’s going to come and we can be in the lead on it.”
