Should New Jersey Try Its Luck at International Internet Gaming?

Senator Raymond Lesniak always seems to get more press for his fundraising than he does for his progressive legislation.  It is true that to understand elected officials you need to “follow the money.”  But to understand the people of New Jersey you need to “show me the money.”  Senator Lesniak understands the people of New Jersey.

As the New Jersey economy struggles to get back on its feet, expanded gaming may be the answer. In the face of slumping tourism and gaming revenues, the state recently legalized in-state Internet gambling, becoming the third state in the country to do so.

The new law only authorizes online gaming by New Jersey residents, and all Internet gaming activities must be confined to Atlantic City. Nonetheless, analysts predict that the state’s Internet gaming market could be worth up to $1 billion in three years, which means much-needed new jobs and increased tax revenues.

So why stop there?

Sen. Ray Lesniak, one of the primary sponsors of the intra-state regulation, has now set his sights on making New Jersey an international hub for online gaming. Under Senate Bill 3084, foreign casinos and gaming companies would be able to set up shop in New Jersey, so long as they obtain a restricted foreign Internet wagering license from the Division of Gaming Enforcement. In addition, games could only be offered to participants who reside outside of the United States and in jurisdictions where online gaming is legal.

The state would impose 15 percent annual tax on all foreign Internet wagering gross revenues, which would be paid into the Casino Revenue Fund. In addition, foreign gaming companies would be required to maintain operations, including servers, equipment, and personnel, inside the confines of Atlantic City.

“International internet gaming is already taking place,” Lesniak stated. “This gives us the opportunity to get in on the ground floor with a new business sector that offers economic growth and job creation.”

In further support of his legislation, Lesniak stated that Econsult Solutions predicted the expanded gaming could create $5 billion to $8 billion a year in revenue and create 11,000 to 16,000 new jobs. He further noted that New Jersey has the regulatory infrastructure in place to support gaming operations.

“The Atlantic City casino industry is well regulated and highly respected, which gives us an advantage,” Lesniak said. “We can capitalize on our strengths and attract business to build and invest in our state.

If the legislation becomes a reality, New Jersey could legitimately establish itself as the Silicon Valley of online gaming.

Donald Scarinci is a managing partner at Lyndhurst, N.J. based law firm Scarinci Hollenbeck.  He is also the editor of the Constitutional Law Reporter and Government and Law blogs.

 

Should New Jersey Try Its Luck at International Internet Gaming?