On Wednesday, New Jersey Division of Gaming Enforcement (DGE) Director David Rebuck issued a “Director’s Advisory Bulletin” in order to address how his department will handle online poker operators who offer their games in “grey markets.” These grey markets are jurisdictions in which online gaming is not explicitly forbidden, but also in which there is some question as to the games’ absolute legality.
This is an issue in New Jersey because when starting up their internet gaming operations, many Atlantic City casinos did not want to build software platforms from scratch. Instead, they opted to partner with companies that already had established platforms that were being used for online gambling around the world. Caesars, for instance, partnered with 888 Holdings and uses the same software for WSOP.com that is used on the international 888poker.com site. Similarly, the Borgata partnered with bwin.party to use the partypoker software. Some potential software providers, though, operate in countries that are considered grey markets, bringing into question whether or not what they are doing is kosher enough for them to obtain an internet gaming license in New Jersey.
Wrote Rebuck in the Bulletin:
These cross-border Internet gaming operations have caused uncertainty with gaming regulators regarding the legality of Internet gaming operations of their licensees in foreign jurisdictions and how those activities should be considered when evaluating suitability for licensure. This uncertainty in the minds of casino regulators is the result of a variety of factors: legislative bodies that failed to enact laws specific to online gaming, confusion regarding the applicability of existing land-based gaming laws to Internet gaming operators, in-personam jurisdiction issues inevitably created by the borderless nature of the Internet, and the lack of affirmative, concrete actions by the foreign government indicating whether it opposes Internet gaming by its citizens.
He followed that up by confirming that companies that operate in “black markets,” that is, jurisdictions in which online gaming is absolutely, explicitly illegal, “will not be able to establish the ‘good character, honesty, and integrity’ required for licensure in New Jersey.”
He added that New Jersey licensees are also not permitted to operate in places where online gambling is legal if they have not been granted the proper license in that jurisdiction.
Rebuck went on to say, essentially, that it can be dangerous for a government to try to view another country’s regulations through the wrong color glasses. Things are complicated. He continued:
It is in this context that the Division finds itself attempting to articulate a licensing standard that fulfills its regulatory responsibilities under the Act while also giving proper deference to the sovereignty of other jurisdictions. After careful consideration of the various issues implicated in its decision the Division, in assessing the legality or Internet gaming in a foreign jurisdiction, will not adopt a standard that could erroneously substitute its own judgment for that of another sovereign jurisdiction’s executive, legislative or judicial authority. The state of the law in many jurisdictions is constantly evolving and often defies a clear categorization, making it extremely difficult for the Division to adopt a more stringent approach.
He concluded that each potential licensee will be evaluated on a case-by-case basis. If they are operating in black market jurisdictions, they won’t get licensed. If the New Jersey DGE deems the places the applicant operates as being grey market, then the applicant can still be eligible.
