- Senator Lesniak does not know exactly what Governor Christie will do, but on Tuesday he suggested that “most expect Governor Christie to veto the bill on Thursday, or at best issue a conditional veto.”
- Lesniak said that people who thought that a federal online poker bill was going to get approved in the last session or in the recent lame duck session do not understand how things work in Washington.
- A senior analyst for Wells Fargo estimates that Internet gambling in Atlantic City “could increase casino revenue by $650 million to $850 million in its first year.”
All eyes are on New Jersey Governor Chris Christie to see whether Atlantic City casinos will soon be able to offer their casino games, including poker, over the Internet. In December 2012, “An Act Authorizing Internet Gaming at Atlantic City Casinos under Certain Circumstances” (A2578; S1565) was passed by the Senate and General Assembly, and it has been sitting on Governor Christie’s desk ever since.
Governor Christie must make his decision by this Thursday, February 7. Proponents of Internet gaming in New Jersey have been urging Governor Christie to allow Atlantic City casinos to offer real money casino games to players over the Internet since Governor Christie vetoed a similar bill in 2011. New Jersey Senator Raymond Lesniak, one of the sponsors of the legislation, pulled no punches and pleaded with Governor Christie to sign the bill.
“Governor Christie, if you are listening, if you have a heart or a pulse, sign the bill,” Senator Lesniak urged on Tuesday morning during an Internet gambling conference at Resorts Casino Hotel in Atlantic City. Similar to recent buzz heard elsewhere, Senator Lesniak does not know exactly what Governor Christie will do, but on Tuesday he suggested that “most expect Governor Christie to veto the bill on Thursday, or at best issue a conditional veto.”
“People who thought that a federal online poker bill was going to get approved in the last session or in the recent lame duck session do not understand how things work in Washington.”
Under New Jersey law, there are several options available to Governor Christie as to how he can deal with the bill and the upcoming deadline. First, he could let the deadline pass and take no action. Alternatively, he could veto it completely or offer a conditional veto, or sign the bill into law. Given the Governor’s penchant for the spotlight, it is unlikely he will let the deadline pass without taking some form of public action.
If, however, he prefers to shy away from the Internet gambling spotlight, and he lets the deadline pass without taking any action, then the bill will automatically become law. If he vetoes the bill, the legislative process would have to start all over again. If a conditional veto is offered by the Governor, then it will mean that the Governor objects to parts of the bill and will have proposed amendments that would make it acceptable for his approval. If the Legislature were to re-enact the bill with the recommended amendments, then it would need to be presented for Governor Christie’s signature again.
Of course, if Governor Christie signs the bill into law on Thursday, this legislation would authorize all forms of gambling, including poker, that are offered at Atlantic City casinos to be offered online. Per the requirements of the New Jersey Constitution (Article IV, Section VII, paragraph 2), all of the equipment, including servers, would be located in Atlantic City casinos. The legislation makes this clear by stating, “All Internet wagers shall be deemed to be placed when received in Atlantic City by the licensee. Any intermediate routing of electronic data in connection with a wager shall not affect the fact that the wager is placed in Atlantic City.”
“Even Harry Reid knew it was not going to happen, but he was not going to turn down the campaign donations.”
Internet gaming vendors would be classified, and required to obtain a license, as “Casino Service Industry Enterprises,” along with other vendors that offer goods or services that directly relate to casino or gaming activity. An Internet gaming permit would be valid for one year and then subject to renewal. The issuance fee would not be less than $200,000 and each yearly renewal fee would not be less than $150,000.
In addition to the issuance and renewal fees, a casino licensee with an Internet gaming permit would pay $150,000 annually to be deposited into the State General Fund. Internet gaming gross revenues would be taxed at the rate of 10%, as opposed to the 8% tax that is applied to casino gross revenues.
Under this legislation, play would be open to individuals 21 years of age or older, located within New Jersey at the time of the wager and who have established an Internet wagering account with the casino licensee. Software, computers and other gaming equipment would be required to have the ability to verify that the individual placing the wager is present within the state.
“I am warning you that if Governor Christie fails to sign the bill, not only could it initially cost New Jersey tens of millions of dollars in tax revenues, but it could also cause several Atlantic City casinos to close their doors.”
In addition to regulating play within the state of New Jersey, the bill contemplates opening play to individuals outside the state and conducting wagering as part of an interstate compact if such wagering is determined to be not inconsistent with federal law or the law of the other jurisdiction.
If the bill is signed by Governor Christie on Thursday, Senator Lesniak said during his presentation at the Online Gambling Conference on Tuesday that he believes “Atlantic City could be the Silicon Valley of Internet gambling.” That being said, with Thursday’s deadline fast approaching, Senator Lesniak had a few additional comments for Governor Christie during his presentation on Tuesday:
Governor Christie says that Internet gambling is not good for Atlantic City, but I am warning you that if Governor Christie fails to sign the bill, not only could it initially cost New Jersey tens of millions of dollars in tax revenues, but it could also cause several Atlantic City casinos to close their doors.
Senator Lesniak also said that he believes that the bill is New Jersey’s best chance at Internet gambling, because he does not believe that federal legislation will be implemented any time soon, if at all—and that any attempt to modify the New Jersey Constitution to expand casino gambling outside of Atlantic City would likely fail.
As for a federal poker bill, he said that people who thought that a federal online poker bill was going to get approved in the last session or in the recent lame duck session do not understand how things work in Washington. With all of the important foreign and domestic issues facing Congress, and the very difficult process of getting legislative support for a bill, it was never going to happen, he said. Senator Lesniak went on to say that, “even Harry Reid knew it was not going to happen, but he was not going to turn down the campaign donations.”
“Most expect Governor Christie to veto the bill on Thursday, or at best issue a conditional veto.”
Senator Lesniak, also pointed out that one of the concerns Governor Christie has with the current bill is a potential conflict between the New Jersey Constitution and pending Internet gambling bill. Other than certain exceptions for lotteries and charitable raffles, the New Jersey Constitution only authorizes “wagering at casinos or gambling houses in Atlantic City.”
In contrast, the New Jersey Internet gambling Bill attempts to legislate that “Internet gaming…will take place entirely on the servers and computer equipment located in the casino based in Atlantic City,” regardless of the fact that the individual player may be located somewhere else in New Jersey outside of Atlantic City.
If the bill is vetoed by Governor Christie, proponents of Internet gambling in New Jersey could seek to amend the state Constitution through a public referendum or special election to expressly authorize certain types of Internet gambling from outside of Atlantic City. Senator Lesniak, was not optimistic, however, in the chances of a public referendum being successful. He said that prior attempts to modify the New Jersey Constitution to expand casino gambling outside of Atlantic City have failed, and that any attempt now would face extreme, and well-funded opposition, from the likes of Casino magnate Sheldon Adelson, who has been a vocal opponent of Internet casino gambling.
While New Jersey sits and waits for Governor Christie to act, lawmakers in Nevada and Delaware have already approved some form of Internet gambling, and several other states are actively considering whether or not to get in on the action.
And, for New Jersey, the action appears to be significant. Several sources have recently cited a Wells Fargo analyst report by Dennis Farrell Jr., a senior analyst for Wells Fargo, and his colleague Alex Schneider, in which they declare that “this is one of the last chances the governor has to provide a lifeline to Atlantic City casinos,” and estimate that Internet gambling in Atlantic City “could increase casino revenue by $650 million to $850 million in its first year.”
Governor Christie now holds the fate of Atlantic City in his hands.