NJ sports betting appeal fast-tracked










Oral arguments for the legalisation of sports betting could begin next month

New Jersey’s appeal against the prohibition of sports betting in the state could be heard as early as 27 May in the Third Circuit Court of Appeals.

The court has informed the attorneys of the professional sports leagues, backed by the Department of Justice (DoJ), and the defendant New Jersey the hearings for their oral arguments have been “tentatively listed” on the agenda for 26 June, according to NorthJersey.com.

New Jersey Governor Chris Christie is challenging the Professional Amateur Sports Protection Act (PASPA) federal law prohibiting all states from offering sports betting except Nevada, Delaware, Montana and Oregon. The state, represented by former US solicitor general Ted Olson, filed an appeal with the Third Circuit US Court of Appeals last month after federal judge Michael Shipp granted a permanent injunction against the state.

In January, the DoJ joined the lawsuit which was filed by the National Collegiate Athletic Association along with the National Basketball Association, the Major League Baseball, the National Football League and the National Hockey League.

Yesterday’s filing added the appeal date “may become necessary for the panel to move this case to another day” during the week of 27 May, with the length of time for each argument to be determined by a panel at a later date.

Regulations were released last month allowing Atlantic City casinos to offer real-money fantasy sports betting, which is legal under the terms of UIGEA.

PokerStars responds to “inconsistent” AGA


Letter filed with New Jersey’s regulators argues that AGA should have no clout in licensing process

New Jersey’s gambling regulators should ignore the American Gaming Association’s (AGA) call for PokerStars to be refused licensure in the state in order to avoid setting a “dangerous precedent”, according to a lawyer representing the operator.

In a letter written to the heads of the state’s Division of Gaming Enforcement and Casino Control Commission, Jeff Ifrah of Ifrah Law outlines why the AGA should have no say in the matter of licensing and why permitting it to do so would be “destructively anticompetitive”.

Stars’ parent company Rational Group is currently waiting to hear whether it will receive an interim casino operator licence which will allow it to complete the acquisition of The Atlantic Club Casino, a deal which could protect around 2,000 jobs.

The 15-page document filed today claims the AGA lacks a “significant interest in the outcome” of the proceedings  and explains that under New Jersey law, only an “entity with a significant interest in the outcome of a case may move to participate”.

It further argues that the AGA’s brief represents an attempt by its members to exclude Rational from the US market, and that allowing the AGA’s participation would set a precedent of “transforming every licensing hearing into a platform for incumbents to make accusations of wrongdoing – including false ones – against aspiring licensees”.

“For all of its lofty rhetoric, the only interest the AGA actually has in this proceeding derives from the fact that some of its members perceive themselves to be Rational’s competitors,” the letter states.

It comes just days after the AGA called on New Jersey’s gaming regulators to block PokerStars’ licensure in the state, claiming the operator has a history of “systematically flouting US law” by continuing to accept bets from US customers post-UIGEA in 2006 when others including Absolute and Full Tilt Poker exited the market. It eventually shut down its US-facing operations in April last year following the Black Friday indictments and later reached a $731m settlement with the US Department of Justice in July without admitting any wrongdoing.

The lobby group, which represents many of the largest gambling companies in the US including New Jersey operators Caesars Entertainment and Boyd Gaming, filed a petition arguing that Stars “should not be found qualified” for a licence in the state.

However Ifrah’s filing argues: “The Casino Control Commission should deny the AGA’s petition to avoid setting a dangerous precedent that would eviscerate all requirements for participation in the context of the Commission’s consideration of licensing applications, and would empower the AGA’s thinly veiled anti-competitive campaign against the entry of a competitor into the market,” it states.

It also refers to last week’s allegations that a senior executive from AGA member Caesars Entertainment approached PokerStars and offered to sell it the Rio Casino in Las Vegas. Stars spokesperson Eric Hollreiser claimed “certain assets” were made available to the company for acquisition.

Ifrah argues: “The AGA’s inconsistency is also apparent in the stark contrast between the arguments raised in its petition and the prior efforts of one of its board members to form a business relationship with PokerStars…. [On 8 February 2013] Caesars suggested that this acquisition would give PokerStars a better relationship with Caesars and would help PokerStars gain a license in Nevada. PokerStars declined the offer because it had no plans to acquire another casino in the near term. Within weeks the AGA submitted its petition to the Commission.”

Egaming was legalised in New Jersey last month when Governor Chris Christie signed a bill permitting Atlantic City casino operators to offer online versions of any games currently played in their properties.

The Division of Gaming Enforcement has since claimed that the market be go live by November despite no specific details of the regulation yet being finalised. With the legislation stating that an official start date must be set between 90 and 270 days, the DGE is now working to a deadline of 16 November for the first egaming site to go live.

Exclusive: New Jersey “to go live” by Nov 16

New Jersey Road Sign

State Department of Gaming Enforcement works towards nine-month deadline

The New Jersey online gaming market could be active as soon as mid-November despite no specific details of the regulation yet being finalised, according to the state Department of Gaming Enforcement (DGE).

In a bid to prepare for the passage of egaming law in the state – approved by Governor Chris Christie earlier this week – the DGE has been working on draft regulation since December 2011 when the US Department of Justice clarified that the 1961 Wire Act only applied to sports betting.

Referring to the 16 November deadline a spokesperson for the DGE, said: “That is the goal and the division is confident it will meet the deadline.”

With the legislation stating that an official start date must be set between 90 and 270 days, the DGE is now working to a deadline of 16 November for the first egaming site to go live.

After many months of consultation with regulators from jurisdictions including Nevada, Delaware and all over Europe, drafting of the framework is ongoing.

Once the first draft is completed the DGE will announce the publication of the regulations on the New Jersey Register, which will lead into a 60-day public consultation period during which the DGE is obliged to respond to every query. The final publication of regulation will follow shortly afterwards.

Gaming suppliers which intend to offer internet gaming on behalf of a licensed casino must now prepare to file a gaming related casino service industry enterprise licence.

The filing of the application is twofold. First, is the review of the company and its qualifiers to determine good character, honesty and integrity in accordance with the Casino Control Act, and secondly there will be a review of the technology and gaming software.

The Division’s Technical Services Bureau maintains ongoing dialogue with companies regarding gaming standards and is confident in meeting the deadline, the spokesperson added.

Betfair TVG seals NJ online horseracing contract








Sportech to remain totalisator operator – TVG to provide betting platform for 4NJBets

TVG-owned Betfair has won the contract to run the platform for New Jersey’s customer-facing online horserace betting site 4NJBets.com, previously run by Sportech.

It is understood that Sportech will keep its role as the totalisator operator, registering the wagers and dividing the pay-outs.

TVG was licensed in the state by the New Jersey Racing Commission on Wednesday and selected to run 4NJBets by Darby Development, the Monmouth Park management company which also runs the state’s pari-mutuel horseracing industry on behalf of the New Jersey Sports and Exposition Authority.

Stephen Burn, president and CEO of Betfair TVG, said of the deal: “TVG has a long history of working closely with New Jersey racing through its television network. Now, we have an opportunity to use all our resources, including the online wagering platform, to help New Jersey racing have a long-term sustainable future.”

The contract comes into effect today and as part of the agreement, the phone bank for account wagering is to be relocated from the Meadowlands Racetrack to Monmouth Park.

Governor Chris Christie signed exchange wagering legislation into law in 2011, but the New Jersey Racing Commission is yet to produce formal regulations, as is the case in California, where Betfair TVG also operates.

In January Christie also signed into law a bill which allows racegoers to place bets and collect their winnings on mobile devices at the state’s racetracks.

New Jersey has suffered a major setback in its bid to offer legalised sports betting though after federal judge Michael Shipp yesterday granted a permanent injunction barring the state from offering it, as well as a summary judgement.

Shipp wrote in an opinion: “Although some of the questions raised in this case are novel, judicial intervention is generally unwarranted no matter how unwise a court considers a policy decision of the legislative branch.”

It is now likely that New Jersey will take the case to the 3rd US Circuit Court of Appeals.

Mixed reactions meet New Jersey egaming law

New Jersey Road Sign

Stocks of European operators with NJ ties see strong uplift, while California business group slams bill for “weakening” eligibility requirements to enter gambling market

It was anti-climatic in the end but after almost four years, two vetoes and a whole load of uncertainty, New Jersey’s online gambling bill was finally signed into law yesterday, ushering in a new era for the US gaming industry.

The milestone event has already had positive ramifications for the share prices of companies hoping to have a crack at the market when it opens, while commentators from elsewhere in the US have criticised the bill’s backers for failing to keep out what have been described as “questionable corporations”.

In a thinly-veiled criticism of the state’s refusal to include a so-called ‘bad actor’ clause to prevent operators which accepted post-UIGEA bets from US customers (a provision removed from the bill last year), California Tribal Business Alliance chairman Robert Smith said New Jersey “appears to be weakening the eligibility requirements needed to obtain a gaming licence”.

Smith’s comments follow Nevada’s move last week to enact a five-year ban on any company – such as PokerStars – which ‘willingly accepted’ wagers after 2006. Conversely, Stars could yet find itself licensed in New Jersey should the Department of Gaming Enforcement allow its proposed US$40m acquisition of the Atlantic Club casino to go through.

“While the local market in New Jersey may be driving these sorts of decisions, in California we cannot allow for reciprocity with states that have lower standards and softer controls opening the doors to questionable corporations, which now appears to be the case in New Jersey,” said Smith. “Gaming at all levels should be held to the same, very high standards set for tribal gaming agencies in California.”

Meanwhile, in a statement made on the Senate floor prior to voting against the bill, Republican Michael Doherty said the bill was perpetuating a model “with its head stuck in the sand”, adding that “voting for this today is just allowing a bad policy to continue”.

But Governor Chris Christie’s swift signing of the bill following near-unanimous approval in the Assembly and Senate was met with far more positive reactions elsewhere. New Jersey now becomes the third US state to legalise online gaming after Nevada and Delaware, but as the eleventh most populous jurisdiction with almost 9m residents, it can truly be seen as a watershed moment for players, operators and suppliers alike.

The legislation’s key sponsor Senator Raymond Lesniak called it “a historic moment for Atlantic City and the state of New Jersey”, while Casino Control Commission Chairman Matthew Levinson claimed online gaming “holds the potential to provide a boost to the city’s casino operators as they rebound from the effects of the economy and increased competition, while adding another dimension to efforts to reinvigorate the city”.

Democrat Lesniak’s first attempt to legalise online gambling in the state was back in 2010 and he has fought long and hard to convince Christie that egaming will not cannibalise land-based profits, and that it would in fact give Atlantic City’s 12 casinos the lifeline they so badly need through an alternative revenue stream.

But it’s not just New Jersey’s gambling companies that are set to benefit. The share prices of two European operators – 888 and bwin.party – both with agreements already in place to provide online gaming software to leading New Jersey licensees, rose sharply.

888’s share price has risen by around 6% since the FTSE250 opened this morning based on the company providing Caesars with its online poker platform in the Garden State, capping off a strong start to 2013 which has seen a 26.2% hike. That’s a 163% improvement since the same time last year.

Meanwhile bwin.party, set to act as the software provider to New Jersey licensee Boyd Gaming, benefitted from a 12% boost which sees its stock up by 22.3% this year to date.

Both 888 and bwin.party will hope the brand recognition and marketing spend of their partners (Caesars controls four of Atlantic City’s dozen casinos while Boyd owns the significant Borgata Hotel Casino & Spa) will allow them to take a cut of New Jersey’s predicted revenue which will reach US$410m in year one, according data specialist H2 Gambling Capital.

Morgan Stanley increased its earnings per share (EPS) forecasts for 2015 by 5% for bwin.party and 24% for 888, adding that the long-term potential from the US market could be worth up to 460p per share for 888 and 560p per share for bwin.party.

The Poker Players Alliance, for so long a supporter of federal online poker regulation, commended Christie for signing the bill. Its executive director John Pappas said in a statement: “New Jersey has gone ‘all in.’ Residents now will have access to a safe and regulated online gaming market, and the state will have a new source for revenue and job creation – something the federal government has failed to do thus far. The US represents the largest percentage of internet poker players worldwide, so there is clearly a want and a need for a legal and regulated online gambling market. New Jersey will now serve as a leader in this thriving industry.”

Indeed, now the state has crossed the regulatory finish line, the race to take the lead in a nationwide market can now begin. Attention will no doubt now turn to the logistics of interstate compacts, with both New Jersey and Nevada hoping to become the dominant force in the process, but for now Lesniak and co can bask in the glory of winning a hard-fought battle.

NJ egaming bill set to be signed into law today

New Jersey Road Sign

Regulation permits any games currently played inside Atlantic City casinos to be offered online – shares of NJ operators see boost in anticipation

New Jersey Governor Chris Christie is expected to sign an egaming bill into law today, legalising online poker and casino games in the state for the first time and breathing new life into the local economy and wider US online gambling market.

The bill – initially handed a conditional veto by Christie earlier this month – is subject to a vote in the Assembly and Senate at a session beginning at 2pm EST. If approved, it will immediately be delivered to the Governor’s desk in order for him to sign it into law.

Sources in New Jersey described today’s hearing and subsequent signing as “a formality”, meaning New Jersey would become the third state to regulate egaming after Nevada and Delaware by the end of today.

Christie’s conditional veto on 7 February came as a somewhat surprising breakthrough with those close to the matter, including bill sponsor Senator Raymond Lesniak, believing Christie would, at best, call for it to be poker-only. The Governor vetoed an almost identical bill in 2011 citing fears of problem gambling, corruption and a detrimental effect on land-based casino revenues.

However, at the second time of asking  he asked for online winnings to be taxed at 15% rather than the suggested 10%; for the law to “sunset” or undergo a complete review after 10 years; for licence fees to be doubled; and that state-elected officials disclose their past and present representations of entities seeking or holding internet gaming licences.

At the time Lesniak told eGR North America that he saw no reason why the amendments couldn’t be made, adding Christie’s decision was “better late than never”.

Attention will now turn to the operators fighting it out for early mover market share. The state’s larger population of 8.8 million and inclusion of lucrative casino products including slots, means it is immediately a more attractive prospect than Nevada which boasts a population a third the size (2.7 million) and has limited its regulation to poker only.

According to data specialists H2 Gambling Capital, the first year of a regulated egaming industry in New Jersey would generate a gross win of as much as US$410m, increasing to $590m four years later.

Several powerful established US land-based casinos, including Boyd Gaming and Caesars Entertainment, have an existing presence in New Jersey and will hope their brand recognition and marketing spend will see them grab a sizeable share of the potential online revenues.

Both companies saw a boost in share price following the conditional veto and are likely to see a repeat of that once the bill is signed into law.

Caesars, which owns four of Atlantic City’s dozen casinos and reported full-year losses of more than $300m yesterday, saw its stock rise from $8.49 to $13.91 when Christie issued his latest veto with the stock settling down to an improved $11.71.

Meanwhile Boyd, owner of a 50% stake in the significant Borgata Hotel Casino & Spa, saw its share price reach a six-month high of $7.77 following the news.

Moreover, the share prices of the operators’ potential technology partners for online poker in Nevada such as bwin.party Digital Entertainment and 888, both immediately leapt by more than 15% on 7 February based on the conclusion that the agreements would also be rolled out in New Jersey.

Caesars optimistic for intrastate despite heavy losses

Sales Report 2

Interactive division drives revenue growth, but operator sees FY losses pass US$300m

Caesars Entertainment remains positive about regulatory online developments in New Jersey and Nevada in the light of the operator’s egaming arm contributing to full-year revenue growth.

Its online division, encompassing real-money Caesars Interactive Entertainment (CIE) and social businesses Playtika and Bingo Blitz, was seen as the main driver in revenues from the operator’s ‘other’ category doubling year-on-year to US$275.7m for the year ended 31 December.

However the company recorded an overall US$343m operating loss for the period after what chief financial officer Donald Colvin described as “Tangible and intangible non-cash impairment charges.”

The period saw Caesars Interactive Entertainment acquire Bingo Blitz operator Buffalo Studios for an undisclosed amount in December last year, while in the same month it was given approval to offer online poker in Nevada and will be able to go live once software partner 888 is approved by the state’s gaming commission. eGaming Review understands this will be in July or August this year.

Caesars is also eagerly awaiting the decision of New Jersey Governor Chris Christie on amendments to legislation in the Garden State, with the politician saying last week there was “no reason not to sign” the modified bill into law today.

Gary Loveman, Caesars’ chief executive, said in an analyst call yesterday:  “We’re optimistic that the legislature will adopt the government’s recommendations and that he will sign the amended bill imminently.”

Group net revenues rose 29.1% year-on-year, predominantly due to the fillip offered by CIE, while the start of 2013 has seen the business roll out a social poker app on Facebook in partnership with Electronic Arts.

The full-year results were the first since the arrival of Colvin who has also taken the role of executive vice president with the operator.

Analysis: Egaming in New Jersey is finally becoming a reality

New Jersey Road Sign

Conditional veto means there’s still work to do, but regulated online gambling is closer than ever

Supporters of online gambling regulation in New Jersey rejoiced yesterday, as a breakthrough was finally made in the form of a conditional veto by Governor Chris Christie.

Unlike in 2011, when Christie killed a similar bill proposing the legalisation of any online game that is currently offered in the state’s casinos including poker, yesterday’s veto appeared more of an endorsement than it did a critique.

Now, with a few tweaks primarily concerning greater transparency and stricter rules to support problem gamblers, bill sponsor Raymond Lesniak should at long last see his legislation signed into law.

Christie kept everyone guessing on what his decision would be. A political foe of Lesniak for many years, most had assumed he would again reject the bill over fears of problem gambling, corruption and a detrimental effect on land-based casino revenues. Just last week he claimed he was yet to make up his mind despite the bill landing on his desk in December.

It came as a welcome surprise then, when Christie told the state Assembly the bill represents an “important policy decision for the residents of New Jersey” and was “historic opportunity” for the state to be a leader in the tourism and entertainment industry.

There are plenty of people who believed the Republican Governor would never utter such sentiment.

At best, many expected Christie to call for all games bar online poker to be removed from the bill. His main requests, however, are that online winnings should be taxed at 15% rather than the suggested 10%, for the law to “sunset” or undergo a complete review after 10 years, for the licence fees to be doubled, and that state-elected officials disclose their past and present representations of entities seeking or holding internet gaming licences.

It is expected that these amendments will be made within the next few weeks and that the bill will be presented once again to Christie for approval.

More broadly, the news is a significant breakthrough for the US online gaming market. With just Nevada and Delaware passing regulation to allow for operators to establish an online gambling business, hopes have for some time rested upon the emergence of federal law in order to spark the industry into life.

Yet with Senate Majority Leader Harry Reid’s federal bill – criticised heavily by Lesniak for taking away states’ constitutional right to regulate their own gambling industry – failing to even make an appearance in last year’s Congress, it looks increasingly likely that a patchwork of state laws will emerge.

New Jersey is, along with Nevada, one of just a few states with a long history of regulated gaming and a reputation of strict licensing and suitability standards. And with a population four times that of Nevada, the opportunity for gaming operators – especially given casino games such as slots will be legal – is instantly more attractive than in the Silver State.

H2 Gambling Capital estimates that under a scenario where all products are permitted, the market could reach a gross win of $913m by year three, growing to $1.14bn by year five.

Compare that to the Nevada, where just online poker has been made legal is estimated to be worth $164m by year five of operations, and it becomes clear why New Jersey is such a significant jurisdiction in the embryonic US market.

As Simon French, an analyst with Panmure Gordon said this morning: “We view this as a watershed moment for state regulation of online gaming in the US. Operators who are able to establish initial market share will be well positioned for further growth in both New Jersey and other regulating states. We expect this to lead to urgency amongst other states to join New Jersey, Nevada and Delaware in regulating. In particular we would highlight California, Florida and Connecticut as likely to be amongst the next wave to follow suit.”

Who are the winners?

Democrat Senator Lesniak has long led the fight to regulate online gambling in New Jersey, having first introduced an unsuccessful bill in January 2010. And until yesterday many had expected this year’s effort to meet the same fate.

The majority of the state’s land-based casinos including those owned by Caesars Entertainment and Boyd Gaming, since they are already licensed by the New Jersey Casino Control Commission, should all be able to obtain an online licence with ease. Much of the support behind Lesniak’s bill was due to its ability to offer Atlantic City’s casinos a much needed boost in revenues and job creation. In March 2012, the New Jersey Casino gross win was US$9.5m – a decline from $12.7m in 2011 and $14.1m in 2010.

Tony Rodio, president of the Casino Association of New Jersey, said in a statement: “Our industry believes that internet gaming is essential to the continued stabilisation, development and success of Atlantic City through the generation of meaningful revenue, jobs and resultant tax revenues – objectives the Governor has always facilitated.”

All eyes will be on the Atlantic Club Casino Hotel, subject to a takeover from PokerStars parent company Rational Entertainment, to see whether the regulator will firstly allow the acquisition to take place and secondly allow the prospective buyer to apply for an online licence too. Prior to Black Friday PokerStars was the clear leader in the US online poker market and therefore a huge threat to competitors should it be allowed re-entry.

The news will also have been welcomed at online gaming suppliers and operators seeking an entry into the US market. In Nevada bwin.party, 888, Bally Technologies, 3G Studios, Barriere and Fertitta Interactive have all entered into partnerships to provide land-based casinos with gaming software, and the competition to do so in a lucrative market New Jersey will be fierce.

After Christie’s announcement, bwin.party’s share price leapt by 17.6p to 134.3p – a 15% rise, while 888′s share price was up by more than 15% this morning to 133.72p.

Neighbouring state Delaware, itself hoping to have live online poker and casino gaming in 2013, could benefit from regulation in New Jersey. With a population of less than a million, sharing player liquidity across the states’ borders (an action allowed under its state law) could ensure a successful and sustainable online gaming market.

Who are the losers?

Proponents of federal online gambling legislation argue that the proliferation of state-by-state frameworks will ultimately be damaging for the long-term future of the industry. It’s no secret that the likes of Caesars and Boyd, along with the American Gaming Association, have lobbied hard to ensure that the likes of Lesniak were unable to get their legislation over the finish line. As more states pass such legislation, it will become increasingly more difficult for any blanket rules to be put in place.

Christie signs conditional veto of egaming bill










New Jersey Governor Chris Christie calls passing online gaming “a historic opportunity” saying he will approve a bill if his suggestions for greater player protection and transparency are met

New Jersey Governor Chris Christie has issued a conditional veto of a bill which would legalise online gambling in the state, calling the legislation a ”historic opportunity” and setting out crucial amendments which must be made for the law to be approved.

Christie, who many thought would block the bill entirely as he did in 2011 due to fears around cannibilisation of land-based casino revenues, revealed today that he recognises the “value and potential” of internet gaming to support his administration’s efforts to revitalise Atlantic City’s ailing industry.

However he will not let Assembly Bill 2578, which would allow the state’s 12 casinos and racetracks to act as operators of online poker and casino games, to be implemented in his current form.

In his conditional veto Christie asks that online winnings should be taxed at 15% rather than the suggested 10% and for the existing law to “sunset” or undergo a complete review after 10 years.
He also makes recommendations to improve the safeguards to limit risks of gambling addiction, corruption and improper influence, including that state-elected officials “promptly disclose their past and present representations of entities seeking or holding internet gaming licences”.
Furthermore, the fee for issuance of an internet gaming permit would be increased from $200,000 to $400,000, the fee for renewal from $150,000 to $250,000, and the annual payment by a licensee to compulsive gambling programmes from $150,000 to $250,000.
It is expected that these amendments will be made within the next few weeks and that the bill will be presented once again to Christie for approval.
“This bill represents an important policy decision for the residents of New Jersey, and a historic opportunity to continue the State’s leadership as a premiere destination for tourism and entertainment,” Christie said in a statement.
“Such a significant step must be carefully considered, balancing the benefits of job creation, economic development, and the continued revitalisation of Atlantic City against the risks of addiction, corruption and improper influence. It is my duty as Governor to make these determinations, always mindful of my duty to guarantee the continued welfare of our families, our neighbors, and the future generations who will call our State home.”
“My proposal continues the tradition in New Jersey of a fine, careful, and well-regulated implementation of gaming. With these changes, we will increase resources to treat compulsive gambling, provide sensible safeguards to ensure careful oversight and a proper annual review of the implementation of internet gaming, along with a 10-year sunset for future leaders to carefully reevaluate internet gaming as a state policy broadly and critical transparency measures to guard against undue and improper influence and self-dealing.”
The Senator Raymond Lesniak-sponsored bill was first approved by a New Jersey committee in May 2012. Lesniak has long argued that online gambling is needed to boost Atlantic City’s struggling casino industry which has been in rapid decline and last year recorded its worst results since 1993.
Last month a leading analyst claimed legalising online gambling in New Jersey was one of Governor Christie’s “last chances” to protect the future of Atlantic City, explaining that in the near term, the state’s online market could generate between US$650m and $850m a year, based on 5.8 million adult players and a per-capita annual online spend of $111-$149. That would mean an additional $150m in additional tax revenues each year.
The Poker Players Alliance (PPA), commended NewJersey Governor Chris Christie for his decision, with its executive director John Pappas saying: “While the New Jersey legislature has some work to do before this bill becomes law, we believe this is a victory for New Jersey residents who reached out to the Governor in droves expressing support for this bill.
“Now, New Jersey is well positioned to serve as a leader in the innovative Internet gambling market and can pave the way for other states to adapt similar structures moving forward. We urge the legislature to act swiftly to pass this important legislation.”
The first version of the bill included a ‘bad actor’ clause made which would have prohibited any organisations that offered online gambling in the US after 31 December 2006 including the likes of PokerStars and Full Tilt. This provision was removed from Lesniak’s bill in December.PokerStars has since agreed to acquire the struggling Atlantic Club Casino Hotel from investment group Colony Capital for a fee thought to be less than $50m, and is in the process of applying for an operator’s licence from the state’s gaming commission.

Egaming could save Atlantic City’s future, says analyst

New Jersey Road Sign

Wells Fargo analyst says gaming revenues would be boosted by US$650m and $850m with legal online gambling

Legalising online gambling in New Jersey is one of Governor Chris Christie’s “last chances” to protect the future of Atlantic City, according to a leading analyst.

Dennis Farrell, a senior analyst for Wells Fargo, rejects the notion that regulating online gaming would cannabalise revenues of brick and mortar casinos, stating it would “provide a lifeline” to the resort town which has suffered from declining returns in recent years. Just six years ago, the city achieved its best gross gaming revenue since land-based gambling was legalised in the state, but profits have decreased ever since and last year the casinos recorded their worst results since 1993.

Christie has until 7 February to sign a bill into law which would permit New Jersey’s 12 casinos and racetracks to offer online poker and casino gaming. The legislation passed through the state Assembly and Senate with bipartisan approval last month.

Farrell’s report said that in the near term, he believes the New Jersey online market could generate between US$650m and $850m a year, based on 5.8m adult players and a per-capita annual online spend of $111-$149. That would mean an additional $150 million in new tax revenue each year.

“Opponents of the bill believe online gaming will lead to job losses at brick-and mortar casinos,” he wrote. “We beg to differ, as we believe online gaming sites operated by state casino operators will lead to job creation and drive visitation to Atlantic City.

“Companies should be able to cross market their online offerings with their gaming and non-gaming amenities, providing a significant advantage over Delaware, Pennsylvania and New York gaming facilities.”

However the Governor said earlier this week that he remains undecided on whether to sign the bill due to fears over potentially cannabilising land-based revenues and problem gambling.

Speaking on a radio show this week Christie said: “I haven’t made a final decision yet, but I have those two concerns, and you should know that that’s the way I feel. And [that was] in part the reason that I vetoed the bill before, in addition to some ways that it was constructed that made no sense, either.

“So I’m taking a very close look at it. I was reading it over the weekend, and reading the briefing from my staff in depth, and I’m going to have to make a decision in the next couple of days.”