The 2006 Unlawful Internet Gambling Enforcement Act threw the world of online gaming into a maelstrom from which it is yet to recover. Various online poker sites withdrew from the U.S., while others defied the law and remained open to American players. Barney Frank et al. have been working hard to get the UIGEA repealed, but a recent federal decision has opened up the possibility of legal intrastate gambling.
New Jersey has become the first state to seriously explore the potential of making online poker fully accessible to their citizens. The S3167 Senate Bill has been introduced by Senator Raymond Lesniak and would permit Atlantic City casinos to provide online versions of their various gambling games. Among the titles permitted would be blackjack, baccarat, and, most importantly, online poker. The casinos have taken a financial beating in these tough economic times and the New Jersey government sees this as a chance to rake in some much needed extra tax dollars.
The New Jersey Casino Control Commission would be tasked with regulating and licensing this new initiative, under the guise of a new Division of Internet Wagering. Starting up your own online gambling service will not come cheap and it is expected that the Atlantic City casinos will be the companies most likely to start their own sites. Every new offering must pay an up front fee of $200,000, followed by a non-refundable $100,000 deposit. In addition, there is a yearly renewal fee of $100,000 and another levy of $100,000 to go towards dealing with problem gamblers.
Although the charges are high, the online gambling industry is potentially very lucrative. “There are probably 500,000 online poker players in New Jersey alone. And we’re missing out on around $100 million in revenue,” said Senator Lesniak. The bill includes a provision for a new 20% tax rate on all online gambling gross revenue, compared to the 8% casinos currently pay on their bricks-and-mortar profits. A portion of this money will also be funneled into the state’s ailing horse-racing industry. Despite the high tax rates, many Atlantic City establishments may turn to online gambling as a way to bolster their damaged finances. A study by the New Jersey Casino Control Commission discovered that revenues were down by 13.2% compared with 2008, marking the lowest ebb since 1997.
The Chairman of industry group iMEGA, Joe Brennan, issued a cautiously optimistic statement. He said that, “New Jersey is recognised as having the toughest gaming regulators in the US, but as a leading gaming state with a long track record of doing things the right way, internet gambling will have a great home here.” However, not all New Jersey residents are in favor of this new pro-gambling approach. The Press of Atlantic City reported that, “Arnold Wexler, former executive director of the Council on Compulsive Gambling of New Jersey, said legalizing Internet gaming would make it easier for people to “lose their life.””
The bill is up for consideration this week and could potentially go into law as soon as the State Governor approves it. The new regulations would allow for anyone to play online poker and gambling games, provided they were in a “restricted area of a casino hotel or a secure facility off the premises of the casino hotel.” Terminals would also be placed at racetracks. Sadly, not all New Jersey residents will be able to get their hands on legal online poker, should the bill pass. The law only applies to those people “within the territorial limits of the Atlantic County.”