U.S. Internet Gaming Bill Interruption; New Jersey Online Gambling Bill Advancement

December 22nd, 2010

Senate Majority Leader Harry Reid (D-Nevada) is fighting against time to find a foothold for his online poker legalization measure prior to the end of the current congressional session.  However, there is a positive movement for US based legalization of online gambling, as the state of New Jersey pushes forward to approve in-state online gaming.

The New Jersey State Assembly Regulatory Oversight and Gaming Committee approved several different bills related to the state’s horse racing and gambling industries.  These efforts include a bill that would legalize online gambling for state residents.  The online gambling and sports betting bills, launched by state Sen. Raymond Lesniak (D), are anticipated to be voted on by the entire Assembly by the close of this year.  A move that could see both pieces of legislation become law before the end of the year if approved by the state’s Governor Chris Christie (R).

Lesniak announced to the Assembly that both bills would allow New Jersey residents to gamble online, however an earlier amendment to allow international customers to participate has been dropped.  The New Jersey online gambling bill would not modify the legality of online gaming for most of the United States.  The bill would lay down a tax rate of 15% on Internet gambling revenue in New Jersey.  Lesniak also stated, if legalized, online gambling would generate $210 – $250 million in annual gross revenues for the state. He said the measure would also create nearly 2,000 jobs.

Nevada Governor-elect, Brian Sandoval (R), supports federal efforts to legalize online poker, but there have been “no discussions of doing it on the state level” if Reid’s efforts were to fail.  Gaming industry analysts and company executives believe New Jersey’s efforts could have an impact on the national debate over online gambling.  “If this passes it could be a tipping point for online gambling,” said David G. Schwartz, director for gaming research with the University of Nevada-Las Vegas. “They’ve already showed that casino gambling could be regulated and successful outside of Nevada.”  Schwartz said he expected Nevada-based gaming companies with New Jersey properties to get involved with online poker if the measure becomes law.

New Jersey lawmakers also approved a resolution that will ask voters next year to decide whether sports betting ought to be legalized in New Jersey.  “Sports gaming is a bit of a harder sell. Poker is probably a good place to start,” Schwartz said.  He cited the Professional and Amateur Sports Protection Act passed by Congress in 1992 as an obstacle to legalizing sports betting in New Jersey. The bill basically outlawed sports betting nationwide, except for sports lotteries in Oregon, Delaware and Montana, as well as licensed sports books in Nevada.  Schwartz said poker accounts for about 1 percent of the $10 billion in total gaming revenues annually in Nevada.  Schwartz also commented, “You never know, it could take off if online gaming becomes legal.”

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