NJ Online Gambling Measure Clears Assembly Panel

Legislation to allow online gambling in New Jersey continues to make progress, despite concerns over its constitutionality.

The Assembly Regulatory Oversight and Gaming Committee passed A-2578 in a 3-1 vote on May 10, a month after it won a Senate committee's approval. (See the Bill at http://bit.ly/Juc7M5.)

The measure would allow casinos to accept wagers via the Internet from gamblers in the state, though an amendment contemplates allowing out-of-state bets if authorities determine it would be legal.

The bill provides that computers, servers and hubs be physically located in licensed casino/hotels and be monitored and regulated by the Division of Gaming Enforcement.

The division would continuously monitor casino equipment for the capability to verify a bettor's physical location within state boundaries.

The committee's amendments, including the provisions for out-of-state bets, provide for a 20% tax on gross online gambling revenues, twice the 10% tax rate contemplated in the Senate version of the bill, S-1565 (http://bit.ly/JucPcg).

The committee also removed a horseracing subsidy that Gov. Chris Christie objected to in vetoing prior online gambling legislation.

Despite general support for the legislation, several lawmakers on voiced concerns that such a change would amount to gambling expansion beyond Atlantic City's municipal boundaries, thus requiring a voter-approved constitutional amendment.

The legislation's proponents have maintained that, so long as the servers and other equipment are located within the city, any online bet would be considered placed in Atlantic City.

Assemblyman Ralph Caputo D-Essex) cast the lone “no” vote, saying he does not oppose the bill in principle but believes the question should be answered in a referendum, citing legal opinions from the Office of Legislative Services and elsewhere that online gambling would require a constitutional amendment.

Assemblyman John Burzichelli (D-Gloucester), the sponsor of A-2578 and a committee member, said he would support racetrack gambling parlors “if there's a way to strike a concession” with Christie.

Sen. Raymond Lesniak (D-Union), the sponsor of S-1565 and prior iterations of the bill, told the committee that passage of the legislation could lead to suits challenging the law's constitutionality.

Lesniak added that passage would put the state in the forefront of legal online gambling, and allow other states unable to make the investment in infrastructure to partner with New Jersey, generating further revenue.

Christie vetoed an online gambling bill last year, saying a referendum would be required.

During a late May visit to Atlantic City to promote tourism there, Christie said he would try to get sports betting in the city before the fall, readying legislation after NJ voters passed a referendum last November.

Legislation to allow online gambling in New Jersey continues to make progress, despite concerns over its constitutionality.

The Assembly Regulatory Oversight and Gaming Committee passed A-2578 in a 3-1 vote on May 10, a month after it won a Senate committee's approval. (See the Bill at http://bit.ly/Juc7M5.)

The measure would allow casinos to accept wagers via the Internet from gamblers in the state, though an amendment contemplates allowing out-of-state bets if authorities determine it would be legal.

The bill provides that computers, servers and hubs be physically located in licensed casino/hotels and be monitored and regulated by the Division of Gaming Enforcement.

The division would continuously monitor casino equipment for the capability to verify a bettor's physical location within state boundaries.

The committee's amendments, including the provisions for out-of-state bets, provide for a 20% tax on gross online gambling revenues, twice the 10% tax rate contemplated in the Senate version of the bill, S-1565 (http://bit.ly/JucPcg).

The committee also removed a horseracing subsidy that Gov. Chris Christie objected to in vetoing prior online gambling legislation.

Despite general support for the legislation, several lawmakers on voiced concerns that such a change would amount to gambling expansion beyond Atlantic City's municipal boundaries, thus requiring a voter-approved constitutional amendment.

The legislation's proponents have maintained that, so long as the servers and other equipment are located within the city, any online bet would be considered placed in Atlantic City.

Assemblyman Ralph Caputo D-Essex) cast the lone “no” vote, saying he does not oppose the bill in principle but believes the question should be answered in a referendum, citing legal opinions from the Office of Legislative Services and elsewhere that online gambling would require a constitutional amendment.

Assemblyman John Burzichelli (D-Gloucester), the sponsor of A-2578 and a committee member, said he would support racetrack gambling parlors “if there's a way to strike a concession” with Christie.

Sen. Raymond Lesniak (D-Union), the sponsor of S-1565 and prior iterations of the bill, told the committee that passage of the legislation could lead to suits challenging the law's constitutionality.

Lesniak added that passage would put the state in the forefront of legal online gambling, and allow other states unable to make the investment in infrastructure to partner with New Jersey, generating further revenue.

Christie vetoed an online gambling bill last year, saying a referendum would be required.

During a late May visit to Atlantic City to promote tourism there, Christie said he would try to get sports betting in the city before the fall, readying legislation after NJ voters passed a referendum last November.