A Houston couple is giving an estimated $4 billion in the next few years to try to solve some of the nation’s social problems by the application of careful thought and statistical analysis – and the criminal justice system is one of their targets.
John and Laura Arnold have that much to give away because John, still only 39 years old, made a vast fortune as a hedge-fund trader.
As a current Wall Street Journal article entitled “The New Science of Giving” explains, the Arnolds’ approach is quite different from the plan that most mega-donors select. Rather than pick existing institutions like cancer centers, women’s shelters, or anti-hunger programs to give money to, the Arnolds want to fund new, alternative approaches to solving problems. Chief among those new approaches is the use of data analysis and science.
Among their targets is the nation’s criminal justice system, where the Arnolds want to understand not the broad constitutional principles but their application in the states on a daily basis and to try to figure out how the system can be improved. They have hired Anne Milgram, a former New Jersey attorney general, to spearhead this effort.
One aspect of the system that the Arnolds are interested in right now is how judges make their decisions to keep nonviolent pretrial defendants behind bars. There just isn’t enough science behind those decisions, the Arnolds believe, and they are spending millions of dollars to create a risk-assessment tool that judges can use to choose whether to lock people up pending trial or to return them to their families. The assessment tool benefited from data from 1.5 million cases – the sort of “big data” that has hardly ever been used in the criminal justice system to date.
We are quite interested in how this project works out and whether a data-driven approach turns out to help prosecutors and defendants. If some quantifiable benefit can be shown, it won’t be just nonviolent crime that will be affected. We’d then expect to see some application of these principles in white-collar crime sentencing and even in civil cases. It’s not clear where the dollars will come from, beyond the Arnolds’ massive infusion of cash, but there’s a significant chance that real change in the justice system may occur in the next decade or so.
April 30 was an historic day for online poker players in the United States. Just a bit more than two years after the indictment and civil cases that were termed “Black Friday” shut down the industry, Ultimate Poker became the first live real-money online poker site in the United States after Black Friday.
Nevada became the first state to legalize online poker in June 2011, and the regulations governing online gaming were issued in December 2011. Nevada gaming authorities granted Ultimate Poker a license in October and last week signed off last week on Ultimate Poker’s technology, which allowed them to launch.
Ultimate Gaming, a majority-owned subsidiary of Station Casinos, LLC, is operating UltimatePoker.com. Station Casinos owns sixteen casinos in Las Vegas. Ultimate Poker is the exclusive online gaming partner of the Ultimate Fighting Championship.
Right now, Ultimate Poker is only available to people who are over the age of 21 and are located in Nevada, though you do not have to be a Nevada resident to participate. Players can register and deposit money into their accounts from anywhere in the world, but can only play when they are physically in Nevada. Players can also make deposits and withdrawals at any of Station Casinos’ locations in Las Vegas.
To verify location, Ultimate Poker will triangulate a customers’ cell phone signal, though some cell phone carriers are not participating in the plan yet. Some players reported difficulty when they tried to play on Ultimate Poker on the first day, including issues with the geo-location services and players being unaware that their cell phone carrier was not participating.
Nevada recently passed a bill that would authorize the state to enter into interstate gaming compacts with other states, a reality that became possible after the U.S. Department of Justice released an opinion in December 2011 stating that the Wire Act applied only to sports betting. Liquidity could become an issue for a state with a relatively small population such as Nevada, so interstate compacts could become vital to the long term success of the state’s online gaming industry.
Online gaming is legal in both New Jersey and Delaware, though those states have yet to go live. Nearly a dozen other states have at least considered some form of online gaming legislation in the past year.
We are very happy to see online poker back online again. Some hurdles remain for companies to assure that their products operate smoothly and efficiently, but it is a good day for the industry and players that real money poker is back online.
The state of New Jersey filed its opening brief on April 29 in the U.S. Court of Appeals for the 3rd Circuit, in a case that could ultimately decide the fate of sports betting in the United States,
In February, U.S. District Court Judge Michael Shipp struck down New Jersey’s new sports betting law, finding it invalid as conflicting with federal law. The federal law at issue is the Professional and Amateur Sports Betting Act of 1992 (PASPA), which prohibits any state from offering sports betting unless the state had a sports betting scheme in place between 1976 and 1990.
In 2011, New Jersey voters approved a referendum by a 2-1 margin to amend the state’s constitution to allow sports betting in the state’s casinos and racetracks. The state legislature then passed a bill legalizing sports betting in the state and it was signed into law by Gov. Chris Christie (R). The New Jersey law would allow wagering on all major professional and collegiate sporting events, except collegiate sporting events involving New Jersey colleges, and on all sporting events, professional or collegiate, taking place in the state.
In August, the four major professional sports leagues and the National Collegiate Athletic Association (NCAA) filed suit against New Jersey arguing that the sports gambling law violated federal law. The U.S. Department of Justice (DOJ) later intervened as a plaintiff in the suit, joining the leagues.
The district court agreed with the plaintiffs and held that PASPA was a rational exercise of congressional power.
There have been prior challenges to PASPA in federal court, but none of those cases directly addressed the constitutionality of the statute, which the Third Circuit is being asked to do in this case.
New Jersey argues that PASPA is unconstitutional because it violates the anti-commandeering principle that Congress may not “require the States in their sovereign capacity to regulate their own citizens.” The Third Circuit’s view on the application of the anti-commandeering principle to PASPA is likely the key to this case for both sides. The district court held that PASPA did not violate the anti-commandeering principle because the doctrine is limited to laws that require some affirmative act by a state, and here New Jersey does not have to affirmatively take any action under the law.
New Jersey argues in its brief that there is no doctrinal basis for this requirement of affirmative conduct for “commandeering,” and that PASPA’s requirement to maintain existing laws is indistinguishable from a requirement to pass new laws. New Jersey cites case law stating that the anti-commandeering precedent turns on whether a law seeks “to control or influence that manner in which States regulate private parties.”
New Jersey also argues that PASPA violates the principle of equal sovereignty, which requires any discrimination among the states to be justified by “a showing that a statute’s geographic coverage is sufficiently related to the problem that it targets.” New Jersey argues that PASPA plainly discriminates among the states and that sports wagering is not the type of “local problem” that justifies different treatment among them. The justification in PASPA for the different treatment of the states was that some states already permitted sports wagering, a difference that does not justify the different treatment between the states.
New Jersey also challenged the leagues’ standing to bring the suit, arguing that although PASPA granted the leagues a right of action to enforce PASPA, “that act does not alter Article III’s jurisdictional requirements.” A separate hearing on just the standing issue was held by the district court in December, and the court found that the leagues did have standing to bring the suit. New Jersey argued that the district court relied on the general harm caused by illegal sports wagering, but that this harm was not traceable to the legalization of sports wagering in New Jersey. New Jersey also noted that the district court placed heavy emphasis on the 3rd Circuit decision in Office of the Commissioner of Baseball v. Markell, a decision that did not address the issue of standing.
The state argues that the standing of DOJ to enforce the law is irrelevant here because “intervention will not be permitted to breathe life into a ‘nonexistent’ law suit.” The court will sometimes treat the pleadings of an intervenor such as DOJ as a separate action, but New Jersey argues that this would not be justified here since DOJ’s intervention cannot be construed as a separate action because it did not sue to enforce the law; rather, DOJ intervened to defend PASPA’s constitutionality.
Intervenor defendants, the New Jersey Thoroughbred Horseman’s Association, Inc. as well as State Senate President Stephen Sweeney and Speaker of the New Jersey General Assembly Sheila Y. Oliver, also filed briefs arguing that PASPA is unconstitutional.
The deadline for the response from the leagues is May 23 and New Jersey will have an opportunity to file a reply brief by May 30. Oral arguments are scheduled in the appeals court on June 26.
The ruling in this case will have very far-reaching implications. A decision in favor of New Jersey will allow states to offer sports betting within their borders. It was not surprising that the district court ruled that New Jersey’s sports wagering law was invalid, but the law may have a different fate in the 3rd Circuit. New Jersey has some very compelling arguments that PASPA is unconstitutional and later this year we will find out if the appeals court agrees.
On March 19, 2013, the New Jersey Office of the Attorney General, Division of Gaming Enforcement (DGE), announced that it has adopted temporary regulations authorizing the state’s casinos to offer fantasy sports tournaments to their patrons. The regulations permit casinos, on their own or in partnership with fantasy sports providers, to offer fantasy sports tournaments or contests.
The temporary regulations will remain in effect for a period of 270 days. During that time, the DGE will propose the regulations for final adoption. The text of the regulations could change from their current form to the form that is eventually adopted. The regulations will become effective on April 22, 2013. The minimum age for participation in fantasy sports tournaments at casinos is 21. Full text of the temporary regulations is available here.
A fantasy sports tournament is a simulated game in which a player manages an imaginary sports team and competes for a monetary prize against teams managed by other players. Since fantasy sports involve considerable skill in the selection of teams and players, they are widely considered not to constitute gambling. Fantasy sports can involve season-long or single-day tournaments.
The New Jersey temporary regulations clearly define that all prizes and awards must be made known to all participants prior to the start of the tournament. The winning outcome of a fantasy sports tournament shall reflect the relative skill of the participants and the outcome cannot be determined solely on the performance of any individual athlete or on the score, point spread, or performance of any single real world team or combination of teams.
The temporary regulations authorize casinos to utilize the casino cage to accept entry fees and pay out winnings from fantasy sports tournaments in the casino. Under the temporary regulations, fantasy sports are not considered to be gambling under state law. Therefore, revenue generated from these games is not subject to the same taxes as revenue generated from table games and other games offered in casinos.
This announcement on fantasy sports is part of a flurry of activity in New Jersey dealing with the state’s gaming industry. Last month, New Jersey became the third state to legalize online gaming within its borders, and games could be online by the end of the year. Earlier this month, a federal judge in New Jersey struck down the state’s sports betting law and the decision has been appealed by the state to the U.S. Court of Appeals for the Third Circuit.
We are very happy to see New Jersey add fantasy sports offerings in its casinos. This will be a boost for the state as well as for patrons who will soon be able to play these games in casinos.
Last night, U.S. District Court Judge Michael Shipp released an opinion in the widely watched New Jersey sports betting case, stating that New Jersey’s sports betting law is invalid as conflicting with federal law. Now, the future of sports betting in the United States will be decided by the U.S. Court of Appeals for the Third Circuit.
The Professional and Amateur Sports Betting Act of 1992 (PASPA), prohibits any state from offering sports betting unless that state had a sports betting scheme in place between 1976 and 1990. Under the law Delaware, Oregon and Montana were granted limited sports betting schemes and Nevada is the only state authorized to offer single-game sports betting.
In 2011, New Jersey voters approved a referendum by a 2-1 margin to amend the state constitution to allow for sports betting in the state’s casinos and racetracks. The state legislature then passed a bill legalizing sports betting in the state and it was signed into law by New Jersey Governor Chris Christie (R). The New Jersey law would allow wagering on all major professional and collegiate sporting events, except collegiate sporting events involving New Jersey colleges, and all sporting events, professional or collegiate, taking place in the state.
In August, the four major professional sports leagues and the National Collegiate Athletic Association (NCAA) filed suit against New Jersey arguing that the state’s sports gambling law was in violation of federal law.
In December, the court heard oral arguments on the leagues’ standing to bring the suit and found that they did have standing. After that ruling, the U.S. Department of Justice (DOJ) announced its intention to intervene and join the four major sports leagues and the NCAA as plaintiffs in the case. The DOJ filed a brief on February 1 defending the constitutionality of PASPA.
Judge Shipp heard oral arguments on February 14, 2013, on the constitutionality of PASPA. The oral arguments focused on three main constitutional issues: Congress’s power to regulate sports betting under the Commerce Clause and the applicability of the uniformity and equal sovereignty principles under the Commerce Clause, due process and equal protection issues under the Fifth Amendment, and the contention that the law violates the anti-commandeering principle that prohibits the federal government from imposing duties on state legislators or executive officials to carry out a federal initiative.
After a very lengthy analysis, the court found that PASPA did not violate the anti-commandeering principle because it “neither compels nor commandeers New Jersey to take any action.” One point of contention during oral arguments was if the anti-commandeering principle applies only when a state is required to engage in affirmative activity. The court agreed with the leagues on this point, by stating that the case law makes it clear that, “Congress cannot, via the Commerce Clause, force States to engage in affirmative activity” and noted that the difference between forcing a state to affirmatively do something and being prohibited from doing something “is not merely academic or insubstantial.”
The court’s opinion also made it clear that it does not believe that PASPA violates any Tenth Amendment principles. The state has argued that Nevada was essentially granted a monopoly on single game sports betting through PASPA and that was a challenge to its state sovereignty. The court did not agree that PASPA usurps state sovereignty and noted that “the fact that gambling might be considered an area subject to the States’ traditional police powers does not change this conclusion.”
The court found that PASPA’s grandfathering clause that allows a few states to offer sports betting comports with the Commerce Clause. The court pointed to the legislative findings of PASPA stating that, “Congress has determined that the substantial reliance interests of the grandfathered states merit preservation and protection,” and therefore, the grandfather clause contained in PASPA passed the rational basis review.
This decision on the constitutionality of PASPA will almost inevitably be appealed to the U.S. Court of Appeals for the Third Circuit and the state will have 30 days to file its appeal. The Third Circuit has heard prior appeals regarding PASPA, but has never directly addressed the constitutionality of the statute, which it will need to in this case.
New Jersey could also appeal the decision by Judge Shipp granting the leagues standing to bring this lawsuit. The leagues have stated in court filings that “the impact of state-sponsored gambling on the public perception of their games and their relationships with their fans are sufficient to confer constitutional standing in this case.” The leagues also argue that Congress expressly recognized that they would suffer from the spread of state-sponsored gambling on their games and provided them with a cause of action under PASPA.
The two sides disagree on what precedent has been set by the Third Circuit on standing issues related to PASPA. In 2009, the Third Circuit ruled in Office of the Commissioner of Baseball v. Markell, that Delaware’s plan to expand its sports betting offerings violated PASPA. Standing was not discussed in the opinion in Markell and lawyers for the leagues argued that this was because the standing of the leagues was so obvious that the court did not need to address it. At oral arguments, Judge Shipp directly asked the state how it could reconcile its argument that the league lacked standing with the Third Circuit’s decision.
The Supreme Court has never addressed PASPA.
This decision is a minor setback for New Jersey, and the future of sports betting in America will be played out in the Third Circuit. It would have been a bold step for a federal district court judge to overturn a federal law that had been existence for two decades. Judge Shipp’s ruling shows that he was being conservative in deferring to Congress in this case, even noting that “judicial intervention is generally unwarranted no matter how unwise a court considers a policy decision of the legislative branch.”
New Jersey will likely learn within two weeks if it will be able to move forward with its plan to implement sports betting in the state’s casinos and racetracks.
U.S. District Judge Michael Shipp heard oral arguments in Trenton on February 14, 2013, on the constitutionality of the 1992 Professional and Amateur Sports Protection Act (PASPA) and will decide the initial fate of the bill passed last year by the state legislature to legalize sports betting in the state.
The implications of this ruling will be far-reaching, since a decision in favor of the state would remove the biggest hurdle for New Jersey and other states that wish to implement sports betting plans. A favorable ruling could bring live sports betting to New Jersey within a few months.
In December, the court heard oral arguments on the plaintiffs’ standing to bring the suit and found that they did have standing. Next, the U.S. Department of Justice (DOJ) announced its intention to intervene and join the four major sports leagues and the NCAA as plaintiffs in the case. The DOJ filed a brief on February 1 defending the constitutionality of PASPA.
Paul Fishman, the U.S. attorney for the District of New Jersey, argued on behalf of the DOJ at the hearing and emphasized that PASPA was intended to stop the spread of state-sponsored gambling. Fishman’s arguments focused on the constitutional soundness of the statute, emphasizing that as long as there was a rational basis to pass the law, it was a valid exercise of Congress’s power under the Commerce Clause.
Ted Olson, the former United States Solicitor General who was arguing on behalf of the state, opened his arguments by making reference to the jobs and revenue that legalized sports betting would create for New Jersey. Olson also emphasized how state voters, the legislature, and the governor had all backed a law last year that would permit sports wagering but are prevented from implementing the law because of PASPA.
Fishman ended his initial arguments by discussing a 1991 memo written by the DOJ when PASPA was under consideration in Congress – a memo that the DOJ did not address in its brief on the constitutionality of PASPA. This memo noted that determinations of how to raise revenue are typically left to the states and since PASPA was seeking to regulate how states generate revenue, “it raises federalism issues.” Fishman tried to downplay the significance of the letter and argued that the “federalism issues” that the letter refers to were taken out of context.
The arguments covering the anti-commandeering principle, which prohibits the federal government from imposing duties on state legislators or executive officials to carry out a federal initiative, seemed to be of particular interest to Judge Shipp. Both sides argued at length about any costs or burden that New Jersey has been forced to take on in order to be in compliance with PASPA. Jeffrey Mishkin, representing the sports leagues, argued that for anti-commandeering issues to arise, the law must require some affirmative conduct from the state and that PASPA does not compel New Jersey to do anything. Olson also pointed out that there are costs and burdens imposed on New Jersey for complying with PASPA. Olson emphasized that the federal government should not be allowed to impose its will on the state, especially since Nevada has essentially been given a monopoly on single sports game betting under the statute.
The decision in this case will likely be appealed to the U.S. Court of Appeals for the Third Circuit. That court has heard prior appeals involving PASPA, but none of those cases addressed the issue of the constitutionality of the statute. The Supreme Court has never addressed PASPA.
It remains to be seen how Judge Shipp will rule in this case. State Sen. Raymond Lesniak, who has spearheaded New Jersey’s efforts to bring sports gambling to the state, has stated that sports betting could be live within 60 days if New Jersey receives a favorable ruling in the case. We support New Jersey’s efforts to legalize sports wagering in the state in the interests of helping its economy and citizens.
New Jersey is poised to become the third state in the country to legalize online gaming. Today, Gov. Chris Christie (R) sent the state iGaming bill back to the legislature requesting some minor changes and indicated that he is prepared to move forward with the bill once those changes are made.
Gov. Christie’s statement said, “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.” The statement goes on to say, “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.”
New Jersey’s online gaming bill allows for all casino games to be played online, not just poker.
On December 20, 2012, the New Jersey State Senate voted 33-3 to legalize online gaming in the state after the state General Assembly previously approved the bill by a vote of 48-25-3.
State legislators have indicated that they are prepared to make the changes suggested by the governor and could get a new bill back on his desk in a matter of weeks.
The sponsor of the bill, State Sen. Raymond Lesniak (D), called the governor’s decision “a huge win” and something that “can help keep Atlantic City from drowning in red ink.”
The changes requested by Gov. Christie today included an increase in the tax rate on revenues generated from online gaming, additional funding for problem gamblers, and tighter regulations on relationships between state employees and companies that hold an Internet gaming license. The bill also expires in 10 years, although there is nothing preventing the state from renewing the legislation in the future.
We are very happy to see New Jersey take a huge step toward bringing Internet gaming to the state and toward adding more jobs and revenue.
In a January 23, 2013, ruling, the U.S. Court of Appeals for the 7th Circuit held that an Indiana law that prohibited most registered sex offenders from using social media websites was unconstitutional because it was “not narrowly tailored to protect the state’s interest.” The decision was restricted to the Indiana statute on sex offenders and did not extend its reasoning to another, related issue – whether courts can permissibly, as a condition of probation or supervised release, restrict white-collar criminals from using the Internet.
The fatal flaw of the Indiana law, the appeals court held, was that it was overbroad because it targeted substantial protected speech, rather than retaining a narrow focus on the specific evil of improper communication to minors.
The 7th Circuit noted that the Indiana statute affected First Amendment rights because it controlled expression via social media and limited the ability to receive information and ideas.
In recent cases of various sorts, including e-commerce cases, federal courts have proved all too willing to imposed Internet bans that trample on various constitutional rights. We focused on this problem in a National Law Journal article a couple of years ago that argued that courts go too far when they impose a broad ban on the use of the Internet against a defendant who had committed online fraud.
In the sex-offender case, Doe v. Marion County Prosecutor, the 7th Circuit acknowledged the strong state interest in protecting minors from harmful online communication, but explained that the ban must be narrowly tailored to target only the appropriate evil. All parties agreed that there is nothing inherently dangerous about using social media – except when a sex offender communicates with minors, which is only a “minuscule subset of the universe of social network activity.”
The same principle ought to be applied to restrictions on Internet use placed upon those who have been found guilty of fraud in e-commerce. Not all Internet usage should be treated as suspect.
Towards the end of its opinion, the court discussed Internet restrictions in the context of conditions of probation or supervised release. The court distinguished between a criminal statute, as in Indiana, that governs the protected speech of the general populace (including registered sex offenders) and the sentences imposed by district courts that may govern Internet usage.
The court said its opinion “should not be read to affect district courts’ latitude in fashioning terms of supervised release.” It elaborated that “Our penal system necessarily implicates various constitutional rights . . . a court could conceivably limit a defendant’s Internet access if full access posed too high a risk of recidivism.”
Somewhat ironically, the court noted that “The alternative to limited Internet access may be additional time in prison, which is surely more restrictive of speech than a limitation on electronics.” Although the 7th Circuit was not willing to expand its protection of Internet usage to the sentencing and probation context, we still think that its strong protection of Internet usage in the First Amendment context bodes well for future challenges in that context.
A bill has been introduced in the Nevada General Assembly, on behalf of the state’s State Gaming Control Board, that would allow for the state governor to enter into interstate gaming compacts with other states. This legislation sets up Nevada to potentially be at the forefront of a compact in which individual states that have passed online gaming bills can work together to offer online gaming without federal legislation.
The bill, titled Assembly Bill 5, would remove language in the previously enacted online gaming bill that stated that an online gaming license does not become effective until a federal law was passed authorizing online gaming or the U.S. Department of Justice (DOJ) provided notice that interactive gaming activities are permissible under federal law. The bill would add language that allows for the governor, on behalf of the state, to enter into agreements with other states.
Assembly Bill 5 has been referred to the Nevada General Assembly Committee on the Judiciary. The upcoming legislative session does not begin until February 4, 2013.
The possibility of gaming compacts became a reality after the DOJ released an opinion in December 2011 stating that the Wire Act applies only to sports betting.
This opinion by DOJ eased fears among state lawmakers that money involved in online gaming could not be sent across state lines without incurring a violation of federal law. With that hurdle removed, the possibility of states entering into online gaming compacts became a reality.
Thus far two states, Delaware and Nevada, have enacted laws legalizing intrastate online gaming. Last month, the New Jersey state legislature passed a law legalizing online gaming and the bill is currently waiting for action to be taken on it by Gov. Chris Christie. Other states have publicly stated that they will consider online gaming legislation in sessions this year.
One potential problem with interstate gaming compacts is the potential for a hodgepodge of different laws and regulations for players and operators. States that lack experience in regulating gambling activities may look to the states that do have such experience, like Nevada and New Jersey, to regulate for them as an alternative to establishing their own regulations for online gaming. Thus far, Nevada is the only state to implement regulations governing online poker.
Nevada may want something in return for helping regulate gaming activities in other states, and it is not clear from the bill what that may be. Compacts like this have the potential to entrust a significant amount of power in a state agency, such as the Nevada Gaming Commission, and it is unclear whether it would be in the best interests of players and operators for that to occur. The concern over one state agency having so much power may serve as an impetus for states that do not currently have regulatory bodies for gaming to decide to establish them.
One other potential problem that gaming compacts address is the size of player pools. While there may not be enough players online at one time in one state for games to be big enough, gaming compacts allow for states to share their player pools, allowing for the possibility of many more players to be online at one time.
Not all states would need to pass a law similar to this Nevada law in order to participate in an interstate gaming compact. Depending on the state law or the powers granted to the state executive based on the state constitution, a state may be able to participate in gaming compacts without any legislative action.
Interstate gaming compacts have the potential to be a good development for gamers, but at this point there are too many unanswered questions about how they would operate. The idea of one state-level agency wielding enormous power over online gaming throughout the country is something that should be studied carefully before it is implemented.
New Jersey could soon become the third state to legalize online gaming within its borders. Its State Senate on December 20, 2012, voted 33-3 to legalize online poker in the state. The General Assembly had previously approved the bill by a vote of 48-25-3. The bill was able to achieve significant bipartisan support in both houses of the state legislature. The bill will now be sent to Gov. Chris Christie.
“If New Jersey’s casinos wish to compete in the 21st century, we have to give them the freedom to adapt a 21st century marketplace,” said State Senator and sponsor of the bill Raymond Lesniak.
This is the second time that the New Jersey legislature has approved an online poker bill. Last year, Gov. Christie vetoed an online poker bill that had been approved by large margins in both the General Assembly and State Senate.
If the bill is signed by Gov. Christie, New Jersey will become the third state, along with Nevada and Delaware, to legalize online poker. The District of Columbia also did so, but later repealed the law.
Last year in his veto message, Gov. Christie said he had “significant concerns” with the legislation, especially the expansion of casino gaming outside of Atlantic City. The New Jersey state constitution restricts gaming to Atlantic City, with exceptions for horse racing and the lottery. Under this bill, all Internet gaming would be deemed to have taken place in Atlantic City and all equipment used to operate online gambling must be located in Atlantic City, with the exception of backups and a few other items. Since no online bet would be completed until a server in Atlantic City accepted the wager, all bets will take place in Atlantic City.
Last year Gov. Christie also took issue with the subsidy that the bill would give to the state’s racetracks, but those were dropped in this bill.
Also in the time since Gov. Christie vetoed the bill last year the U.S. Department of Justice reversed a long held position and stated that the Wire Act only applied to online sports betting. This opinion by the Department of Justice would allow for individual states that have legalized online gaming to form a compact to allow for bigger player pools and the possibility of generating additional revenue.
There was debate in the state Senate on allowing the state’s racetracks to participate in hosting gaming as well. Sen. Mike Doherty (R) sought more information on why the state’s racetracks could not be allowed to offer online gaming instead of just the state’s casinos. Sen. Lesniak said he would work toward the goal of bringing online gaming to the state’s racetracks.
Sen. Lesniak pointed out that the bill is about job creation and keeping the tax rate lower will help attract companies to the state and allow for the state to become the “Silicon Valley” of online gaming. Sen. Lesniak said he believes that this bill could pump a couple hundred million dollars into the casino industry in Atlantic City. In a statement released after the bill was passed Sen. Lesniak said, “This bill will mean more jobs, more revenues for our casinos, more tax revenues for worthy programs . . . and a healthier gaming industry in the Garden State.” .
This bill protects the interests of New Jersey’s casino industry by requiring that iGaming be offered only through brick and mortar casinos in Atlantic City, which may either offer online gaming independently or in partnership with an iGaming vendor. Revenues generated by online gaming would be taxed at 10 percent of gross gambling revenues.
In addition, the bill also outlines permit fees, provides for contributions to support those affected by compulsive gambling, regulates the process for the placing of Internet wagers, and provides penalties for violations of the law.
Under the bill, casinos or their affiliates would be allowed to offer the same games that are currently offered on Atlantic City casino gaming floors. All players must be physically located in New Jersey.
Thus far, there has been no public indication from Gov. Christie regarding his plans for the bill. Gov. Christie now has up to 45 days to act on the bill. He can sign it into law, veto it, or stand aside and allow the bill to become law because he did not veto it.
We are happy to see that the New Jersey legislature has passed an online gaming bill and we support New Jersey’s efforts to legalize online gaming in the interests of bringing jobs and revenue to the state.