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NJ Legislators Considering 2-Year iGaming Extension Instead of 10 Years
By Jeff Osienya Jun 28, 2023 LegalityIt appears than New Jersey legislators are settling for a 2-year regulated online gambling extension rather than pushing for a decade-long extension. Here’s a closer look at why this might be happening, and potential repercussions for NJ’s iGaming.It had seemed like the deal to extend online casino gaming in New Jersey for another decade was already cast in stone. However, in a move that may have sent shockwaves across the entire industry, the New Jersey State Assembly Committee shelved the idea of another extension of ten years and is in fact proposing that the iGaming extension period be watered down to just two years. Whilst there isn’t any doubt about the lawmakers' resolve to extend the iGaming period, it remains to be seen just how long, the extension will be.
The Bill’s Progress So Far…
Senate Bill 3075 was pretty much like its predecessor, the version that had been in operation since 2003, in that it sought to increase the mandate of online gaming in the Garden State by another 10 years. The bill, which was tabled by Senators James Beach ( D- Camden) and Vincent Polistina ( R- Atlantic), had cleared many vital Senate committees like the State Government, Tourism, Wagering, and Historic Prevention committees, after initially being cleared by Senate’s budget committee. Under the provisions of the soon-to-be-expired existing law, companies seeking to own an operator’s license had to be affiliated with Brick and Mortar Casinos in New Jersey. The new law sought a continuation of the same, of course with the 10 years being maintained.
Trying To Make Sense of the Change of Heart by NJ Legislators
The decision to offer an extension of two years rather than the initial ten years caught many people in the industry by surprise. Even the most informed stakeholders had not anticipated that move to be made by NJ Legislators. And till now, we have no official explanation from the lawmakers as to why they decided to cut down on the duration of iGaming in the state. However, if we view the sheer volume of active legislation when it comes to responsible gambling, we might start to have some clues about why the New Jersey legislators felt that a reduced period would suffice.
Exclusive licenses to host online casinos in the Garden State are held by Atlantic City casinos, which represent powerful forces in the larger Atlantic City political scene. On the other hand, the American Gaming Association (AGA), which is the overall trade body for commercial and tribal casinos across the United States, has long held opposition to the imposition of term limits on any form of legal gambling. As a matter of fact, the opposition by the AGA is stronger with regard to limits placed on advertising of online gambling sites, a move that helps the offshore illegal black gambling channels to continue growing.
Possibly, the move for a shorter extension would be a means to send a strong message to the key players in the industry, not to take the legal aspect of online gambling for granted. It is also seen as a sly threat to online gambling operators, in a move to keep them on their toes, so that when the matter arises again in 2025, they better be on their best behavior for an even lengthier extension to be provided. Additionally places so much power on the legislature to control how the industry behaves.
A Vital Sector That Cannot Risk Shutting Down
Online casinos have breathed new life into the Atlantic City casino scenery. Since the first online casino was established in New Jersey, the iGaming sites have collectively garnered a whopping $6.3 billion in Gross Gaming Revenue (GGR). The importance of iGaming in the state has been more evident as times have gone by. It was particularly evident in the heat of the COVID-19 pandemic when all of Atlantic City’s Brick and Mortar casinos were forced to close down. During these times, the iGaming revenue held the fort and was one of the key reasons why the state successfully steered through the harsh economic times of the pandemic.
From what was considered a drop in the ocean when it was initially started in New Jersey, in comparison to the larger revenue generated by physical casinos, to be playing in the big leagues, the strides made are there to be seen by all and sundry. Moreover, in 2015, iGaming was just bringing in $148.8 billion in taxes. Compare that to the staggering $1.66 billion it brought last year alone, and you can see the progress made in under a decade. According to local media reports, in April this year, online gaming brought in $159 million to the state, which represents a rise of 16% on a year-by-year basis from 2022.
Besides helping the state steer through the harsh economic times in the heat of the COVID pandemic, the iGaming sector was also vital in helping out during the great economic recession that rocked the country from 2007 to 2009. Given the number of times this sector has come through for New Jersey, it would be calamitous if that deadline is not met. Be that as it may, the willingness to extend the iGaming mandate exists. The only question that remains is what period will this mandate be extended for. As things stand though, the bill must be signed by Governor Phil Murphy (D) before the law expires on November 27th, 2023.
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