State of Play: New Jersey By Luke Hayward October 17, 2013 at 10:54 am New Jersey is set to make U.S. gambling history, as it prepares to license and run intra-state online casino gambling on a truly grand scale. Although Delaware, with three land-based casinos running online gambling, will likely be first out of the gate, in late October, New Jersey will be far larger. Projected annual tax revenue from New Jersey’s online gambling ranges from nine to almost fifty times the $3.75 million projected in Delaware. Governor Chris Christie signed the online gambling bill into law on February 26th, and although there is debate over expected revenues, some have forecast a business worth as much as $13 billion annually by 2018. Christie has famously opined that the state will see an 85% increase in its casino tax, which has fallen dramatically in recent years. Land-based casino revenues in the state declined from a 2006 peak of over $5.2 billion to a 2012 figure of scarcely $3 billion, as competition in neighbouring states grew strongly. Unlike Nevada, which has recently green-lighted intra-state online poker, New Jersey allows all varieties of on-line casino gambling, and so expects to see revenue on a much greater scale. Some analysts projecting as much as a 400% difference in revenue between the virtual ventures of the two states. New Jersey will see a soft launch of its new online gambling on November 21st, available only to private guests. If all goes well, there will be a full launch at 9 a.m. on November 26th, when adults in New Jersey will be able to log in and gamble with real money online across a range of licensed intra-state providers. Persons physically located in New Jersey at the time of play and over 21 years of age will be allowed to gamble, regardless of their home state. Final regulations regarding the operation of the online gambling sites are expected to reach casinos on October 21st. The PPA (Poker Player’s Alliance) complained about a proposed clause to close accounts dormant for over one year and seize any funds; that has been dropped. Rational Group, owners of Pokerstars, recently suggested that New Jersey allow player-to-player money transfers, something not now legal because of concerns about money laundering and other underhand dealings. All three U.S. states which have so far passed legislation for state-regulated intra-state online gambling have included clauses to allow inter-state compacts between legislatively like-minded states. This could lead to larger player pools for casino traffic, of particular interest to poker players, for whom the most popular forms of the game involve player versus player action. Every brick and mortar casino in Atlantic City plans to have an online casino. Many partnerships and accords have been recently forged between land casinos and online gambling providers, and even in certain cases between rivals. The first licenses are being issued this month. On October 3rd, Borgata Hotel and Casino became the first entity to receive a New Jersey Internet gaming permit from the Division of Gaming Enforcement. The Borgata partnered with bwin.party to run their online casino games. Many of the eleven other hotel-casino giants in Atlantic City are hard on its heels, including Caesars, Trump, the Tropicana and The Golden Nugget. In an unlikely alliance, rival casino empires Wynn and Caesars are set to work together, since the former lacks a physical premises in New Jersey, a legal requirement for the licensing of an online entity. This agreement is non-exclusive, with the casinos providing online gambling from computer servers physically located inside Caesars’ property in Atlantic City. 888 Holdings will provide software for the two companies for their new online operations. Pokerstars still wants in, despite failed attempts to purchase the Atlantic City Casino earlier this year. The original bad actor clause in New Jersey was removed before the bill passed in February; it forbade future commercial activity in the state by any company who provided real money wagering online in the years following the passage of the Unlawful Internet Gambling Enforcement Act of 2006. The changes to bill A2578 placed the responsibility for the determination of this matter back into the hands of state and federal legislators. The latest news is that Pokerstars, undisputed giant of the online poker world, is trying to work through Resorts Casino, and is offering to build a new $10 million live poker room there. Legislators are still considering the proposed partnership, which would see the creation of hundreds of jobs. Reaction to the developments has been relatively muted thus far, but there is a huge potential market just waiting to play. One major incentive behind the moves for legislators, aside from boosted tax revenue, has been job creation, with one notable lobbyist estimating that over 2,000 jobs would be created state-wide in the first year of online casino operations. Many of the new jobs will not be traditional dealer and service roles associated with land-based casinos, but IT, technical, and administrative roles, with a far higher level of education required, and accordingly higher salaries. Governor Christie negotiated a ten-year trial period for the intra-state online wagering which he signed into law in February. There are those who doubt the wisdom of the move, saying that it will inevitably lead to a rise in problem gambling. In one interview, a compulsive gambling counselor from New Jersey warned that it may also prove very difficult to prevent underage gambling online, despite the identification and prevention measures being put into place. How this all will pan out remains to be seen. We may have to wait at least ten years to make a conclusive determination as to the financial success and social costs of the new legislation. What is certain is that there’s going to be a flurry of gambling activity in New Jersey near the end of 2013, the like of which has never before been seen. The countdown has begun, with just weeks to go before the scheduled public launch in late November. Luke Haward is a writer, editor, MTT grinder and poker coach based in Oxford, UK and Guadalajara, Mexico. His interests include game design, charity, ecology and philosophy. You can follow him on Twitter @LukeHaward.