NEWS > ANALYSIS
Let the games begin
A conditional veto by Governor Christie means there’s still work to do, but regulated online gambling in New Jersey is closer than ever before. By Tom Washington
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upporters of online gambling regulation in New Jersey rejoiced last month, as a breakthrough was ?nally made in the form of a conditional veto by Governor Chris Christie. Unlike in 2011, when Christie opposed a similar bill proposing the legalisation of online versions of all games offered in the state’s casinos including poker, February’s veto appeared more of an endorsement than it did a condemnation. Now, with a few tweaks primarily concerning greater transparency and stricter rules to support problem gamblers, bill sponsor Raymond Lesniak should at long last see his legislation signed into law. Christie had kept everyone guessing as to what his decision would be. A political foe of Lesniak’s for many years, most had assumed he would again reject the bill over fears of problem gambling, potential corruption and a detrimental effect on land-based casino revenues. It came as a welcome surprise then, when Christie told the state Assembly the bill represents an “important policy decision for the residents of New Jersey” and was a “historic opportunity” for the state to be a leader in the tourism and entertainment industry. There are plenty of people who believed the Republican Governor would never utter such sentiment. At best, many expected Christie to call for all games, bar online poker, to be removed from the bill. His main requests, however, were that online winnings should be taxed at 15% rather than the
suggested 10%, for the law to “sunset” or undergo a review after 10 years, for the licence fees to be doubled, and that stateelected officials disclose their past and present representations of entities seeking or holding internet gaming licences. At the time of going to press, Lesniak was expected to concur with the amendments and then seek ?nal approval when he re-submits the bill on 17 March. CRUCIAL MILESTONE The news is a signi?cant breakthrough for the US online gaming market. With just Nevada and Delaware thus far passing regulation to allow for online gambling within their respective states, hopes have for some time rested upon the emergence of federal law in order to spark the industry into life. Yet with Senate majority leader Harry Reid’s federal bill – criticised heavily by Lesniak for taking away states’ constitutional right to regulate their own gambling industry – failing to even make an appearance in last year’s Congress, it now looks increasingly likely that a patchwork of state laws will emerge. New Jersey is, along with Nevada, one of just a few states with a long history of regulated gaming and a reputation of strict licensing and suitability standards. And with a population four times that of Nevada, the opportunity for gaming operators – especially given casino games such as slots will be legal – is instantly more attractive than in the Silver State. H2 Gambling Capital estimates that
under a scenario where all products are permitted, the market could reach a gross win of US$913m by year three, growing to $1.14bn by year ?ve. Compare that to Nevada, where only online poker has been made legal – worth $164m by year ?ve of operations – it becomes clear why New Jersey is such a signi?cant jurisdiction in the embryonic US market. Speaking to eGR after the announcement, Lesniak said he was “pleasantly surprised” with the news and insisted he would ensure all Christie’s requirements were met. “We weren’t hearing good things from the Governor’s office in the build up,” he explained. “His previous statements gave the impression that he was going to fully veto it and you can see in the language he used in his statement that he is still a reluctant supporter. But we managed to put a lot of heat on him, from casinos and unions, and showed him the disastrous consequences of not acting now. It’s better late than never.” Lesniak now expects the state’s Division of Gaming Enforcement to take anywhere between three and nine months to process and issue online gaming licences from the time when the bill is signed into law. Mirroring Nevada, any service provider or software supplier will need a separate licence, meaning deal makers are set to have a ?eld day as online gaming specialists attempt to partner with one of Atlantic City’s 12 casinos. “Trump will certainly need a partner, Tropicana will need a partner,” Lesniak said. “Let the games begin.”
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