Internet, Mobile & Sports Betting

New Jersey became the biggest state yet to allow regulated online gambling.  The new law allows Atlantic City's casinos to run websites that take bets on games such as blackjack, slots and poker. The law requires bettors to be physically present in the state, which can be verified with technology that tracks a user's location.  New Jersey's move marks a significant turning point in the debate over online gambling in the U.S.  The first regulated online-gambling networks in the U.S. are expected to be up and running this year in Nevada and Delaware.  Though industry forecasts vary widely, H2 Gambling Capital, which tracks online-gambling markets, estimates that online gambling in New Jersey will generate revenue of $410 million the first year, growing to $590 million after a few years. Of the total, the state of New Jersey will collect a 15% tax.  Nevada and New Jersey may try to become regulatory hubs for other regions, allowing their licensed companies to have an advantage in other jurisdictions while sharing the revenues with other states. Yet while simple in theory, creating interstate networks is likely to be tough since gambling is regulated state by state in varying ways, say people working on the issue. A state's gambling interests would be unlikely to want their state government to enter into deals that would put them at a disadvantage to interests in other states.

Atlantic City's gambling houses can now begin offering betting on Internet versions of the slot machines and table games found on their traditional casino floors. The New Jersey Assembly and Senate overwhelmingly approved Internet gaming legislation Tuesday, and Gov. Christie signed it into law.

New Jersey joins Nevada and Delaware as the only three states in the country in which some form of online wagering is legal.

"I am pleased to say that today I signed New Jersey's Internet gaming bill, opening the way for new opportunity to bolster our efforts to continue the revival of Atlantic City, its casinos, and entertainment offerings," Christie said in a statement just after 5:30 p.m. "This was a critical decision, and one that I did not make lightly.

"But with the proper regulatory framework and safeguards that I insisted on including in the bill, I am confident that we are offering a responsible, yet exciting option that will make Atlantic City more competitive while also bringing financial benefits to New Jersey as a whole."

The Republican governor conditionally vetoed the bill Feb. 7, as he sought revisions to ensure that it Internet gaming would be properly regulated. He wanted I-gaming subject to 10-year trial period, with an annual review; state elected officials to disclose any past and present dealings of entities seeking or holding Internet gaming licenses; more resources devoted to problem-gambling programs, and the tax on gross online-gaming revenue boosted to 15 percent from 10 percent, resulting in a bigger cut for the state.

All those changes were incorporated into the bill, and the measure sailed easily through both houses (68-5-1 in the Assembly, 35-1 in the Senate) in Trenton before Christie's scheduled 3 p.m. state budget address to a joint session of the Legislature.

"It's another piece," said John Burzichelli (D., Gloucester), the legislation's prime sponsor in the Assembly, after the vote there. "The landscape, the market, and the world continue to change. We will do more commerce online today and more tomorrow.

"This is the ultimate form of convenience gaming," Burzichelli said. "Atlantic City will pick up some of what is being done illegally now. But now, it will be done in a legal environment. The resort will be able to renew some relationships [with customers] that have drifted away. This will be another tool to attract people to Atlatnic City."

Under the state Constitution, Atlantic City has exclusivity on gambling, which is why the servers for online gaming must be housed at the dozen Shore casinos, Burzichelli said.

But a patron can gamble online anytime, and from anywhere, just as long as he or she is within the state's borders with a laptop, iPhone, iPad, or other handheld computer device.

How it works, Pepper Hamilton L.L.P. online-gambling attorney Jeremy Frey said, is that you log onto a website operated and owned by any of the Atlantic City casinos. You can begin play after you pass the security protocols to confirm your age (21 or older), casino account, and other information, and GPS technology confirms that you are located in New Jersey at the time you are gambling.

"Internet gaming is a great thing," Dimakis Kalogerakos, 44, a small-business owner from Margate, said as he worked a penny slot machine at Harrah's Resort in Atlantic City Friday. "It will boost revenue . . . but it will not save Atlantic City from its downturn. It will help. It's another avenue, just like sportsbetting will be a good option."

Last week, the Borgata became the first casino in the United States to offer in-room gambling from a TV remote control, and the other Atlantic City casinos have been preparing for Internet gaming.

Supporters say I-gaming can raise an additional $250 million to $300 million in annual revenue for the struggling resort, which has lost substantial bricks-and-mortar casino revenue to Pennsylvania and New York over the last six years.

"The objectives for the continued stabilization, development and success of Atlantic City that Gov. Christie and our legislature has facilitated over the past couple of years have taken a significant step forward today with the passage of Internet gaming," Tony Rodio, president of the Casino Association of New Jersey, said in a statement.

Nevada became the first state to legalize intrastate online poker last summer.

Delaware legalized online wagering at its three racetrack casinos in late June, but the state has yet to launch it. In January it issued a 150-page request for proposals for vendors to supply the technology, software, support staff, marketing and payment method. Delaware hopes to have online gambling up and running by Sept. 30, said Secretary of Finance Tom Cook.

"This is a complex type of arrangement . . . and not done in a few weeks," Cook said Tuesday. "If there are any missteps, there is the potential to lose the trust of the patrons".

Like Delaware, New Jersey will need to install GPS tracking software to tell whether a patron is gambling online in the state. Such software can identify the source of a signal within a few feet.


The new law also allows New Jersey to enter into interstate compacts for online poker tournaments with Nevada and Delaware, and other states that move to legalize the activity. Earlier this week, California introduced legislation for online poker.

State Sen. Jim Whelan, whose district includes Atlantic City, said the addition of online wagering will prevent at least one casino from closing - the tiny Atlantic Club, which is being bought by an online-gaming company. The financially ailing casino's employees and management lobbied hard for Christie to sign off on Internet gaming, with closure possible if he did not.

"This saves 3,000-plus jobs in Atlantic City in the short term," Whelan said. "Long term, New Jersey is now positioned to be at the forefront of a national phenomenon.

"In a few years, we will see a proliferation of Internet gaming, and we want New Jersey to be the hub."

Ryan Kaufman, 29, a defense attorney from New York City who plays online poker, said it would benefit the Shore resort, where he stayed last weekend for a bachelor party.

"Definitely, it's a good thing," he said. "It's another way to bring people to Atlantic City."


New Jersey legislators gave final approval Tuesday to a bill legalizing gambling over the Internet, sending it to Gov. Chris Christie, who has indicated he will sign it quickly.

The state Assembly and Senate passed an updated version of the bill that Christie vetoed on Feb. 7, making the changes he asked for including setting a 10-year trial period for online betting, and raising the taxes on the Atlantic City casinos' online winnings.

Assuming Christie signs the bill — he said last week he would do so quickly if the legislature made the changes he wanted — New Jersey would become the third state in the nation to legalize gambling over the Internet. It also would represent the largest expansion of legalized gambling in New Jersey since the first casino began operating in Atlantic City in 1978.

Nevada and Delaware have passed laws legalizing Internet betting, which also is going on offshore, untaxed and unregulated.

"Finally, some good news for Atlantic City's future," said state Sen. Raymond Lesniak, one of the strongest proponents of online gambling. "Internet gaming will give an immediate boost to the outlook for Atlantic City's future, preventing the closing of at least one casino, and saving thousands of jobs. Now we can get to work making Atlantic City the Silicon Valley of Internet gaming by being the hub for other states to join."

The idea is to help the struggling casinos by attracting new gamblers who are not now visiting the casinos. The comps, like free hotel rooms, show tickets, meals or other freebies, would be accrued from online play, but would have to be redeemed in person at a casino, presumably enticing a player to spend more money while there.

The bill will not take effect until the state Division of Gaming Enforcement sets a start date, sometime between three and nine months after the law is signed. Casino executives have estimated it could take six months to a year to get the system up and running.

It would allow the playing online, for money, of any game currently offered by Atlantic City's 12 casinos; online poker is expected to be a particularly popular option.

Gamblers would have to set up online accounts with a particular casino, and could set daily limits on their play. They also would be subject to the same per-hand limits as gamblers physically present in the casino. Casino executives say final rules have to be approved by the gambling enforcement division, but they expect the state to require gamblers to have to appear in person at a casino to open their accounts and verify their age, identity and other personal information. Payouts could be made remotely to a credit card account or bank account when a player cashes out, if the state approves such an arrangement, the executives said.

They conceivably could even gamble through social media sites, as long as the sites worked with casinos who have an online gambling license, Lesniak said.

The casinos would utilize software programs that would, among other things, seek to verify that a person is at least 21 years old. Ted Friedman, CEO of Secure Trading, a Delaware Internet payment processor, said his firm's software validates player information, including age, against multiple public and private databases.

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