Christie Gives Conditional Nod of Approval to New Jersey Internet Gaming

After 49 days, New Jersey Gov. Chris Christie (R) finally gave his answer on Internet gaming in New Jersey. It’s a conditional “yes”.

Christie conditionally vetoed A-2578, the intrastate online gaming bill that was overwhelmingly approved by the State Legislature in December. But the governor cited the importance of the tourism and gaming industries to New Jersey and said that he will sign the bill into law if the Legislature makes certain amendments to it.

“I have concluded that now is the time for our State to move forward, again leading the way for the nation, by becoming one of the first States to permit Internet gaming,” Christie wrote. “I authorize this step towards modernizing Atlantic City’s entertainment attractions cautiously, with carefully constructed limitations that will ensure the highest integrity and the most robust oversight.”

“In the wake of the devastating losses suffered by our residents in recent months, we must embrace new ideas to fuel our reconstruction and continued prosperity. Internet gaming should be a part of that effort.”

Although the conditional veto wasn’t the outright approval that many industry officials and state legislators sought, they applauded the governor’s action nonetheless.

“Today, Governor Christie took a critical step toward re-building New Jersey’s economy and establishing strong standards so that Internet gaming will be enjoyed responsibly,” said John Pappas, executive director of the Poker Players Alliance.   “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.”

Christie’s decision was closely watched ever since the Legislature approved A-2578 in late December by a 48-25 vote in the Assembly and a 30-3 vote in the Senate. His first remarks on the subject came in late January on his monthly “Ask the Governor” radio show. At that time he worried about cannibalization of brick-and-mortar business and the perils of increased problem gaming caused by Internet gaming.

The amendments Christie has requested reflect those concerns. They include increased funding for compulsive gambling treatment programs and an annual analysis of compulsive gambling by Internet gaming licensees; increasing the tax rate from 10% to 15%; and a ten-year sunset provision, by which the law authorizing Internet gaming would expire without further legislative action.

The sunset provision is the most surprising of the gubernatorial proposals. Ostensibly it will allow future New Jersey elected officials to review whether Internet gaming has helped or hurt New Jersey casinos. But it also allows the governor to throw a lifeline to an ailing Atlantic City now while still claiming in the future that he did not permit an unlimited expansion of Internet gaming on his watch. That latter point could be crucial if Christie pushes for national office in 2016, as many believe he will.

The bill, with Christie’s proposed amendments, now returns to the State Legislature, where it should easily pass through a streamlined drafting, review and approval process. Once both chambers have voted in favor of the amendments, the bill will return to Christie for his final signature. That should happen within a few weeks.

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Kevin McGrady

Legislative and Politics Beat Writer: Kevin McGrady practiced corporate law in New York City for eight years before moving to Las Vegas in 2008 to join the gaming industry. Kevin is a graduate of New York University and Columbia University School of Law.
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