State of Online Gambling in New Jersey

The online gambling industry of NJ took its first breath in 2011, when the state’s legislature passed a comprehensive bill, legalizing the online casino industry. However, then Governor Chris Christie ended up vetoing the first bill, due to its perceived flaws.

As a result, the legislature revised the vetoed bill so that it would take into account some of Governor Christie’s initial concerns.

Key provisions of the revised bill included a limitation on which companies may operate an online casino. For one, online casinos would have to adhere to the same registration requirements as their land based counterparts. In turn, this meant that online casinos had to apply for the same form of licensing.

The underlying goal of the revised bill was to combat organized crime, underage gambling and rogue online casinos. The age limit was set to 21 years, while making IP tracking mandatory as a means to fight out of state gambling.

Governor Christie accepted the new revisions, stating that this would help boost the state’s economy. He signed the bill on February 23, 2013.

Next step: Sports Betting

After online casinos, attention was brought to sports betting and whether it could be legalized under the existing regulatory framework. Sports betting had long been hampered by a federal law named PASPA, which banned wagering on sports.

Then in 2018 came a watershed moment, when the Supreme Court overturned PASPA, citing the state’s right to self determination. The court held that states have the right to decide for themselves whether they wish to permit sports gambling within its borders. The legalization of sports betting set off a frenzy within the casino community.

Since the repeal of PASPA, the sports bet industry is estimated to have turned over more than $9 billion, according to the Las Vegas Sun.

Sports betting has long been considered a cornerstone of the gambling industry. It represents a much more invigorating and active form of betting, with higher potential revenue and turnover.

Since 2010, multiple states have passed legislation that either legalizes or creates a foundation for online gambling within their territories. Coupled with technological change, it has ushered in a new digital age of gambling.

Recommended reading: Technology Moving the US Gambling Industry.

The repeal of PASPA, coupled with the recent ruling on the Wire Act, represent the most important changes to US gambling laws in decades.

Current status

Since New Jersey legalized online casinos 6 years ago, it has had time to mature and expand its services. A plethora of amendments and changes to existing laws has helped streamline the industry.

Online gambling (including sports betting) rests on three legal pillars:

1. The most important part has been the various states’ push to legalize online betting. That includes comprehensive legislation which creates a framework for online casinos.

2. PASPA’s repeal has been instrumental in the states’ push to legalize sports betting. It reverts power back to the states themselves, granting them the right to regulate the industry.

3. Narrowing the scope of the Wire Act has ensures that the Federal Government will not interfere in cross border payments related to online casinos, lotteries and other non-sports wagers.

Had the DOJ’s interpretation of the Wire Act withstood court scrutiny, it would have effectively barred online casinos from processing interstate payments, including both deposits and withdrawals.

The lack of a streamlined regulatory framework had until recently been the biggest impediment to US online gambling.

Revenue and future prospects

Since NJ launched online gambling full scale in 2013, revenue has gone up exponentially.

After the initial launch in November 2013(launched halfway through the month), casinos saw $980,165 in total revenue, while the state pulled in $147,023 in taxes.

In April 2019, total revenue ballooned to $36,582,934, with the state raking in $5,491,556 in tax dollars. These numbers do not even include online sports betting, which will likely double the income.

New Jersey’s online casino and sports betting industry is showing no signs of slowing down. Rather, it is expected to grow at a fast pace in the coming years, as more bettors move online.

Moreover, the public appears to have softened its stance on online gambling, with less opposition to its legalization. This change in sentiment could be attributed to the growth of land based casinos, especially as it pertains to native American gambling enterprises. Online casinos are seen as a natural extension of the industry.