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NJ senator pushes online betting bill

Published On: Jan 02 2012 11:38:31 AM CST
Updated On: Jan 02 2012 12:16:36 PM CST
ATLANTIC CITY, N.J. -

Rushing to take advantage of a U.S. Justice Department ruling that in-state Internet gambling does not violate federal law, a New Jersey lawmaker is pushing for his colleagues to pass a bill legalizing online gambling within the state's borders.

N.J. Sen. Raymond Lesniak told The Associated Press on Monday he'll try to get a bill through the Legislature and on Gov. Chris Christie's desk by next week. The goal is to make New Jersey the national leader in online gambling, now that the federal government says in-state bets do not violate the law.

"We can be the Silicon Valley of Internet gaming," said Lesniak, a Democrat from northern New Jersey. "It's the wave of the future. It's going to come and we can be in the lead on it."

Last month, the Justice Department opened the door for cash-strapped states and their lotteries to bring online gambling to their residents, as long as it does not involve sports betting.

The department said the federal Wire Act only prevents gamblers from wagering on sports outcomes online, and said other in-state bets would be OK.

Nevada is already moving fast to capitalize on the ruling. Late last week, the state's gambling regulators approved rules that allow companies in the state to apply for licenses to operate poker websites.

Caesars Entertainment Corp., which owns four of Atlantic City's 11 casinos, and Boyd Gaming Corp., which owns half of the city's Borgata Hotel Casino & Spa, have already submitted proposals to be licensed in Nevada.

New Jersey tried to become the first in the nation to approve Internet gambling last year, but Christie, a Republican, vetoed the bill in March, fearing it would violate federal law and lead to a proliferation of back-room Internet gambling dens across the state.

A spokesman for the governor could not say Monday whether Christie would sign the bill if it passes.

A spokesman for Senate leadership said it won't be clear until Tuesday whether there's enough support to move forward quickly on the bill, and a spokesman for Assembly leadership did not immediately respond to a message seeking comment.

Lesniak introduced a new bill in August that he said contains safeguards to address Christie's concerns, including fines of $1,000 per player per day for anyone running an illegal Internet betting parlor, and $10,000 for advertising such illicit operations.

Bettors would have to be New Jersey residents at least 21-years-old, and physically be in the state. Lesniak said existing software could verify those requirements.

So far, the bill is not scheduled for a vote on Jan. 9, the last day of the current legislative session, but Lesniak said he is trying to secure approval from Assembly and Senate leaders to have it approved in committees this Thursday, then finally approved on Jan. 9 and sent to Christie.

He said he expects to determine on Tuesday whether sufficient support exists to fast-track the bill through the Legislature in the closing days of the session.

"`I got it through last year with overwhelming support," he said.

Robert Griffin, CEO of Trump Entertainment Resorts and president of the Casino Association of New Jersey, did not immediately return a message seeking comment Monday, but last year, he said that money currently going to offshore online betting operations could benefit New Jersey.

Trump Entertainment Resorts announced plans last year to set up an Internet gambling operation as soon as it becomes legal to do so.

The bill said only the Atlantic City casinos could offer Internet gambling in New Jersey, requiring the computer servers to be physically located in Atlantic City to comply with state law mandating that all New Jersey casino gambling occur there. Gamblers would have to set up online wagering accounts with the casinos.

The bill also contains a provision intended to gain the support of the state's horse racing tracks, reinstating two-thirds of the subsidies the casinos had to pay to the tracks until last year. The casinos once had to pay $30 million a year to the tracks in return for keeping slot machines out of the tracks. Lesniak's bill would require that Internet betting licensees pay $20 million a year for three years to help increase race purses and help the tracks through a difficult period.

If the Internet bill becomes law, giving the casinos a new revenue stream, Lesniak said that would not necessarily make New Jersey lawmakers more likely to approve slot machines for horse tracks.

"Those are two separate issues," he said.

Internet gambling revenue would be taxed at 10 percent instead of the current 8 percent on traditional casino revenue.

The bill also would allocate $100,000 a year from online gambling proceeds to fund programs for compulsive gamblers. People with gambling problems would be able to set limits on how much they could bet or lose within a specific time frame.