New Jersey Senate Approves Intrastate Internet Gambling Bill

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On Monday, the New Jersey State Senate approved S 490, a bill introduced by Raymond Lesniak that would established the first intrastate internet gambling framework in the United States. The bill was approved by an overwhelming 29-5 margin and now must be approved by the New Jersey Assembly.

Lesniak commented in a press release distributed on Monday, “This bill would generate a minimum of $35 million in tax revenue to help build a bridge to self-sufficiency for our state’s ailing horse tracks. It would generate millions of dollars in private revenue and would give casinos a new product to capture gaming dollars from tech-savvy gamblers. Right now, internet wagering is taking place and the funds are going to offshore operators. It’s time that we give casinos the authority and the tools to keep these funds in the Garden State.”

S 490 has moved at a rapid pace as of late. Last week, the New Jersey Senate Budget Committee approved the measure by a 10-1 margin, with two lawmakers abstaining from the vote. Under S 490, games permitted in land-based casinos in Atlantic City, including poker, would be available online. Any online operators would be on the hook for a 15% tax on gross gaming revenues, down from the rate of 20% when the bill was introduced.

For those who believe that they’d be able to log into New Jersey’s internet gambling sites from outside of the state, think again. The bill is solely an intrastate measure and text found in a Press of Atlantic City article explains, “The games would not be available to all U.S. residents. Lawmakers said the technology exists to prevent out-of-state players from gaining access to New Jersey’s system.”

The bill mandates that all computer systems must be located in Atlantic City. To that end, Lesniak told the Press, “That’s a no-brainer, and the whole bill is a no-brainer. We need to be bold, to tell the Federal Government it has no constitutional authority to prevent online gaming here in our state.”

Several gambling-related bills were passed on Monday in New Jersey. In addition to Lesniak’s S 490, the Senate approved S 829, which, according to a press release distributed yesterday, would permit the following: “Bettors would be able to set up exchange wagering accounts, and two or more bettors would be able to place directly opposing wagers on the outcome of a horse race or races.”

Small-scale casinos may also be on the horizon in New Jersey, as a bill approved in the State Senate on Monday would permit construction of a small-scale casino totaling 200 rooms and 24,000 square feet of gaming space. Other bills call for the construction of off-track wagering facilities and the creation of larger pari-mutuel pools.

Also approved by the State Senate was S 2390, which “would lower the minimum requirement for the number of standardbred horse racing dates scheduled at the Meadowlands Racetrack and Freehold Raceway to 100 dates per season at each track.” Finally, a bill to create a “New Jersey Standardbred and Thoroughbred Racehorse Incentive Fund” was approved.

New Jersey’s gambling market has been under fire from expansion in neighboring states like Pennsylvania and Delaware and casino offerings in Connecticut and Massachusetts. The state primarily is divided into racetrack interests in the north and mega casino resorts in the south.

The Interactive Media Entertainment and Gaming Association (iMEGA) has been among those groups pushing Lesniak’s bill in New Jersey. The measure could ultimately become the model that other states interested in intrastate online wagering would follow. iMEGA is anticipating passage of the bill by the first quarter of 2011.

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