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NEW JERSEY ONLINE GAMBLING LAWS

NEW JERSEY ONLINE GAMBLING LAWS

By on Oct 25, 2016

NEW ONLINE GAMBLING CHANGES ARE COMING

New Jersey, home of Atlantic City, is no stranger to legalized gambling. In fact, New Jersey was the second state to do so, after Nevada.  Legalized gambling was only permitted in the now-famous gambling resort hub. This year, residents may vote on expanding the gambling outside of Atlantic City.

But these brick and mortar casinos had been flagging in more recent years.  In 2012, Atlantic City had only netted $3 billion in revenue, just over half of the $5.2 billion revenue earned in 2006. Over the past two years, four casinos in the city have shut down. And since the Great recession, New Jersey’s economy and tax revenue have struggled. One proposed solution was to open the door to online casinos.

SIGNIFICANT TAX REVENUES TO THE STATE

Since 2013, a full range of online casino games has bee available to residents of New Jersey.  This list includes craps, slots, blackjack, and roulette, ever since laws and regulations regarding licensing have been relaxed. While revenue at the physical locations in Atlantic City continue to drop, online gambling has helped boost their overall revenue. In March 2015, the Golden Nugget reported earnings of nearly $3 million from online gambling alone.  This represented a jump of 337 percent from March 2014, and a significant improvement over the previous month. For Tropicana, this gain was about 60 percent, keeping revenue a net positive.  This was in spite of its losses in table games and slot machines in its physical location.

More recently, internet gambling in New Jersey has steadily climbed, with a few dips in revenue here and there. Total revenues for online casinos in the state have held steady at over $15 million since March 2016. The biggest earners have been Borgata and the Golden Nugget with over $92 million and $79 million, respectively.

WIDE VARIETY OF OPERATORS

In the three years since the relaxation of the gambling laws, more than a dozen online casino operators have set up shop in the state.  This includes including Tropicana and the Golden Nugget, Atlantic City mainstays that opened up their own online shops when the new laws were passed. With all types of online casino games open for play, players can choose their favorite casino game in the comfort of their own from, whether it be blackjack, roulette, or good old slot machines.

Of course, even though gambling in the state is a little bit easier, there are still some regulations in place. Even online casinos have to pay a of licensing fee before setting up shop in the state.  The fees are in addition to having to follow the extensive rules laid out in the law. For instance, although online casinos have no fixed geographic location, these online casinos must have geolocation software and other precautions in place to ensure that players are physically in New Jersey and are 21 or over.

A ROCKY START BUT NOW, GROWING RAPIDLY

The first year of legalized online gambling in New Jersey got off to a rocky start.  Online casinos netted only $9.3 million in revenue by fiscal 2014, as opposed to the projected $180 million by the state. However, this revenue was recorded in only a six-month period.  Further, the industry was nascent in the state, it had plenty of room to grow. Some of the blame for this small growth had been due to technology problems, and with payment processing by credit card companies unaware of New Jersey’s new gambling laws.

Among the most stringent components of these new, more relaxed laws is the geolocation component.  Geolocation has caused problems for players even within the state. Cell phones in particular are more vulnerable to technology that can interfere with geolocation, stymying the growth of mobile gaming at first.

MOBILE PLAY ON THE RISE

But, along with gaming on the internet, New Jersey residents can also download mobile apps licensed by their favorite casino operators. While each app must be approved individually by state regulators, many of Atlantic City’s best-known casinos offered mobile gaming. Now residents don’t even have to be at home or at a casino to take a gamble at online casino games.

Even with this new expansion of the law, however, some online casinos still flouted New Jersey regulations. Continent 8, LLC, was recently found to be providing services to illegal gambling operations. Since this company was utilizing servers located in Kahnawake, Canada, it may prove to be a deterrent for offshore operators to conduct business in the US. Thus far, however, it has not affected the Atlantic City-based casino operators, keeping it local, as it were.

New Jersey has continued to expand legalized gambling in the state since the relaxation of internet gambling laws. In addition to online gambling, the New Jersey Division of Gaming Enforcement authorized the company GameCo, Inc, to place video gambling machines in select casinos within Atlantic City. These machines require some degree of skill, and the more skilled the player, the bigger the payout. These new machines will hopefully revitalize the brick and mortar casinos.  These sites have continued to struggle even as internet gambling has grown.

EXPANSION PLANS IN THE VOTERS HANDS

As Election Day approaches, New Jersey residents will have a chance to vote again on gambling in the state – whether or not to allow the construction of two casinos outside of Atlantic City. With the expansion of gambling in the virtual realm, expanding the industry in a physical location may seem somewhat retro.  Despite that, it may give some hope to the remaining casinos in operation in Atlantic City – should the referendum pass, these casinos have the first bid for these new properties.

In spite of the hiccups that happened along the way during the first year of online gambling legalization in New Jersey, online casino games continue to thrive in the state. While home-bound gamblers in New Jersey before could check out illegal online operations, a legal, regulated market ensures safe and fair play for all involved – as well as another source of tax revenue for the state.

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