NJ lawmakers consider expanding online casino law

It will be 10 years in November since New Jersey became the first state to bring online casino gaming to a competitive market, with foreign companies with previous expertise in the industry forming partnerships with all nine Atlantic casinos. City.

That means the original 10-year law authorized by the New Jersey legislature expires in just eight months, unless state officials extend it. The Assembly’s tourism, games and arts committee met in Trenton on Monday in a bid to begin a discussion on the issue.

The landscape has changed quite a bit in online casino games, which in its first full year of operation in 2014 generated a modest revenue of $122.8 million. By 2021, that figure had reached a record $1.37 billion in revenue – partly spurred, no doubt, by consumer reluctance to visit casinos in the age of COVID-19.

But this increase in revenue has coincided with qualms among Atlantic City casinos and online gambling operators.

For casinos, the problem was that the state’s Division of Gaming Enforcement aggregated online casino revenue with brick-and-mortar casino revenue to calculate the “payment in lieu of taxes,” or PILOT, that the casinos pay to the city and the state. The online casino companies, which handle these operations, keep the majority of this revenue.

Legal uncertainty surrounds PILOT tuning

In December, casino operators succeeded in pushing lawmakers through a bill – swiftly signed into law by Governor Phil Murphy – that removes both online casino revenue and sports betting from the PILOT calculation.

Atlantic County officials then filed a lawsuit over what they said was tens of millions in lost revenue for the county in a reshuffle they never wanted for a 2016 deal. A state judge recently sided with the county in the case, which has additional litigation this month.

Industry insiders, meanwhile, said overseas online casino operators have begun to question why they have to pay a large chunk of their revenue to casino companies, seemingly in perpetuity. The 2013 law requires any online company to partner with a casino to offer its gambling.

Whether a new arrangement finally occurs, there is no doubt that casinos benefited from a share of online casino gaming revenue when attendance in the island city was down at the worst of the COVID-19 era. .

“Who knew it would be so precious?” Assemblyman Ralph Caputo was considering NJ online game after Monday’s hearing. “[Online casino revenue] really kept the lights on there.

This barrage of online casino advertisements

Still, Caputo — who recently sponsored a bill to extend the 2013 provisions by 10 years — said his committee wants to examine the impact of online casino gambling on the state’s overall culture.

“Through these conversations, we need to have an analysis of any social impact that there might be,” Caputo said. “We know how productive it is in terms of revenue.”

“The marketing is sometimes just overdone,” Caputo added to NJ online game. “It’s crazy – too much. We need to look at it and maybe regulate it. It’s like [advertising] never stop.”

Caputo said he appreciates that various companies are “fighting for revenue share and margins can be slim.”

Smoking ban enters the debate

Caputo’s bill would simply expand the partnership law covering casinos and online casino operators, but a spokesperson for a group called Americans For Nonsmokers’ Rights decided to testify.

It took no more than a handful of seconds for Caputo to say that “a smoking ban has nothing to do with this bill.” But the spokesperson insisted, in a bid to tie casinos getting an extension of online casino offerings to efforts to end the state exemption that allows casinos to circumvent the smoking ban at the statewide interior.

“Casinos can’t have it both ways,” he said.

The separate casino smoking ban bill will be considered “early in the spring” by the state’s Senate Health Committee, committee chairman Sen. Joe Vitale said in his remarks this month. latest.

“They’re trying to cloud the argument with job loss or financial ruin, but none of that is going to happen,” Vitale said of the New York Casino Association’s longstanding insistence. Jersey to allow smoking in gaming rooms.

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