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New Jersey Chasing Online Gambling
Sunday October 9, 2011 : WITH NOVEMBER REFERENDUM IN SIGHT, INTEREST IN INTERNET GAMBLING GROWS (Update)
Atlantic City's parlous economic situation, competitive pressure from surrounding states, and the possibility that New Jersey could make millions in tax revenues, continue to drive politicians keen to expand gambling opportunities despite the opposition of Governor Chris Christie.
In an informative article over the weekend, NJ.com examined the current situation, identifying three political initiatives still underway in the Garden State.
The first is the legalisation of online gambling, a long-running fight which has seen state Senator Ray Lesniak drive a legislative measure through both the Assembly and the Senate in New Jersey, achieving convincing bi-partisan support, only to have the measure quashed by the governor's veto.
Sen. Lesniak has not given up on the concept of legalised intrastate online gambling; in September he reintroduced legislation authorising online gaming in Atlantic City and at an off-track wagering site, his objective being to meet the governor's objections.
Lesniak added a provision prohibiting restaurants, hotels, bars and other businesses from advertising online gaming to prevent them entering the market and expanding gambling online beyond Atlantic City. He additionally tried to assist the state's ailing horseracing industry by proposing the allocation of a portion of casino profits to the state’s racetracks.
"Online gaming will be a huge boost for the casino industry," Lesniak said at the time. "It can also be a temporary saviour for our horse racing industry until we get sports betting at our casinos and race tracks."
The governor remains unconvinced about supporting horseracing, commenting that the New Jersey casinos do not need to be burdened any longer with supporting an industry that cannot support itself.
The second initiative underway is an attempt by both Republican and Democratic state lawmakers to overturn the federal Professional Amateur Sports Protection Act, which prohibits expansion of sports wagering, in order to permit regulated sports betting in New Jersey.
To achieve this, and make the appropriate changes to the state constitution, a referendum of state residents will be required, and the lawmakers have already placed this on the ballot for November 8.
If residents agree with the sportsbetting proposal, the framing of appropriate legislation will be required, and in order to be prepared the Senate State Government, Wagering, Tourism and Historic Preservation Committee is currently drafting a measure to allow betting on non-college sports teams at Atlantic City casinos and at two specified racetracks.
Once those steps are taken, the state could go to court in an attempt to overturn the federal ban. In similar fashion to online gambling, the governor could be an obstacle, as he has previously opposed sports betting on the grounds that it is against federal law.
That said, he has not yet indicated where he would stand in the event of a positive vote for sportsbetting in the November referendum.
Two weeks ago, the Senate State Government, Wagering, Tourism and Historic Preservation Committee heard testimony from casino and horse racing executives in support of sports betting, and there is clearly strong support for the initiative.
However, NJ.com reports that there is potential conflict on how the rewards of sports betting should be allocated, with Joseph Kelly, president of the Greater Atlantic City Chamber of Commerce, proposing that revenue from sports betting should go only to the casinos, whilst state Sen. Jim Whelan, chairman of the gaming committee, warning that he would not get the legislative support to legalise sports betting if the profits were not spread around the state.
The third initiative is to make available video slots at horseracing tracks outside Atlantic City in a bid to shore up sagging popularity and prizes. Wagering on state horse races plummeted by 74 percent between 1977 and 2009, according to the New Jersey Thoroughbred Horsemen's Association.
The governor's answer is to privatise the Meadowlands and Monmouth Park racetracks, but that has not stopped some lawmakers pushing for video slot gambling at horseracing tracks.
At least six bi-partisan politicians are trying to persuade the governor to reconsider his opposition to video lottery terminals outside Atlantic City, the NJ.com article claims, noting that supporters of the idea say it could generate $500 million to $700 million in net revenue for the state.
"The states all along our borders have slots and other forms of convenience gaming located at their racing facilities,” Republican Assemblyman Declan O’Scanlon said recently in referring to the impending closure of a large breeding farm. "It’s time New Jersey began thinking along those lines before we see more farms downsize or close."
Interested parties in the horseracing business have pointed out that the state will take a serious economic knock if the racetracks are allowed to founder. Citing a 2007 report by the Rutgers Equine Science Center, they claim that the industry pumps $1.1 billion annually into the state economy, and provides 13,000 jobs.
Perhaps the comment of Assemblyman Ralph Caputo, a member of the Regulatory Oversight and Gaming Committee, best summarises the pressure for action on the problems facing New Jersey gambling:
"We can no longer afford to keep our heads in the sand and pretend that we do not have direct competition to our Atlantic City casinos in Pennsylvania, Connecticut and New York," he told NJ.com. "This becomes even more of an economic push for us to do something in New Jersey."
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