New Jersey Senate OKs Online Gaming; Bill Now Goes to Christie

The New Jersey Senate passed a bill that authorizes intrastate online casino gaming and poker in New Jersey.

Bill A-2578, sponsored by Democratic State Senators Ray Lesniak and Jim Whelan, received 33 votes in favor and 3 against. The State Assembly approved the same bill on Monday by a 48-24 margin.

The bill now will head to Governor Chris Christie’s office for his final signature or veto. Christie vetoed a similar bill in 2011. At the time, he expressed concerns about the possibility of internet cafes becoming de facto gambling halls. He also raised questions as to whether the bill would pass muster under the New Jersey state constitution, which restricts all casino gaming in New Jersey to Atlantic City.

A-2578 addresses those concerns by providing penalties if internet cafes advertise gambling or allow bets to be placed within their confines, and by specifying that all computer servers and other equipment used to offer online gaming in New Jersey must be physically present in an Atlantic City casino.

Speaking from the floor of the Senate prior to the final vote, Sen. Lesniak said, “Sen. Whelan knows all too well how important this legislation is. In addition to the revenues that will go to Atlantic City and the State of New Jersey, this will go to replenish the Casino Revenue Fund. This fund goes to seniors and disabled folks, for home care, meals and transportation. In addition to helping Atlantic City and saving jobs, it will help our seniors and disabled.”

“This is just a first step for New Jersey,” noted Sen. Whelan. “We expect to be the Silicon Valley of online gaming. Federal law will allow us to compact with other states and share revenue from their gaming. In order to be competitive with other jurisdictions, we pegged [the tax rate] at 10%. If we want these companies to come here, if we want to be a hub at least as far as the east coast of the United States, we have to have a tax rate that is competitive.”

Gov. Christie has not publicly taken a stance on the new bill, although he has been an outspoken supporter of the state’s gambling industry — especially as it has lost revenues to expanded gambling in neighboring states.

He also may favor signing the bill to help Atlantic City recover from Hurricane Sandy. The hurricane caused extensive damage to the city and forced its casinos to close for most of a week, leading to a 28 percent drop in casino revenue for the month of November 2012. That was the biggest monthly drop in the 34-year history of Atlantic City casino gaming.

Christie has until February 3, 2013 to sign the bill into law.

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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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