On Thursday, the Regulatory Oversight and Gambling Committee of New Jersey voted 3-1 (with one member abstaining) in favor of sending an online gaming bill (A2578) to a vote at the full Assembly. This is a good step forward for those in favor of online gambling in New Jersey.

Bill A2578 is worded such that it would supplement current gambling legislation, by adding poker, roulette, baccarat, blackjack and other games to the list of “Authorized Gambling Games” suitable for wagering over the internet, as laid out in the current New Jersey Casino Control Act. It would allow for operators to obtain gaming licenses in Atlantic City and offer online gambling games to the residents of New Jersey.

As expected, not everyone is pleased with the potential effects of this bill. State Sen. Ralph Caputo, a former Atlantic City casino executive, says that it is “hypocritical” for the Legislature to allow a “virtual expansion of gaming” beyond Atlantic City’s boundaries, without also giving brick and mortar establishments the same luxury.

Sen. Ray Lesniak is an advocate of legalized online gambling. He sees it as a good way to regulate the industry, while at the same time benefiting the state with tax revenues. However, he has voiced concern over the fact that the Assembly version of this bill proposes a much higher tax rate than what was expressed in the Senate version. The Assembly version states a tax of 20% of the gross revenue, and another 5% to go towards the Casino Reinvestment Development Authority. This 25% rate is much higher than the current 9.25% tax (8% plus 1.25%) that brick and mortar casinos are subject to.

Lesniak was heard in testimony saying that too high of a tax rate for online entities might have a strong negative impact on the ability of New Jersey operators from being able to create accords with other states’ online gambling operations. There is no currently enacted legislation supporting this, but there is one pending piece of legislation (Senate Bill 1565) which would allow such pacts under certain circumstances.

The proposed Bill A2578 isn’t the only bill regarding online gaming currently being considered for New Jersey. There are at least two other pending bills regarding internet technology and how it should be permitted for use when it comes to gambling.

There is the pending Senate Bill 1565, which is up for vote on May31st. There is also the proposed bill A-2610, which would update New Jersey’s horse racing laws to make a clear exception for players to place bets and receive information about bets on their cellphones and other mobile devices, such as iPads. Currently in the USA, only Nevada and Atlantic City allow the use of cellphones and other mobile devices in designated sports book and other gambling areas.