- According to Lesniak, New Jersey has the potential to be an international “iGaming hub.”
- The bill would create a separate permit category called “Restricted Foreign Internet Wagering” (RFIW).
- Gaming companies issued these permits would not be allowed to offer gaming to US customers nor would there be any sharing of player pools between the international and US sites.
- Revenues from foreign gamblers would be subject to a 10% tax on gross gaming revenues plus a 2.5% “investment alternative.”
New Jersey has the potential to be an international “igaming hub,” says to State Senator Raymond Lesniak (D-Union), who proposed a new bill late last week that would allow the state to offer regulatory services to online gaming operators doing business outside the US.
The bill would create a separate permit category called “Restricted Foreign Internet Wagering” (RFIW)—but gaming companies issued these permits would not be allowed to offer gaming to US customers nor would there be any sharing of player pools between the international and US sites.
The bill seeks to court operators that are currently regulated offshore jurisdictions such as Gibraltar, Isle of Man, Malta, Alderney and Curaçao.
During a news conference at the Atlantic City Convention Center, Lesniak explained New Jersey’s competitive advantage: “These companies, now located in Gibraltar or Isle of Man or any other offshore places, don’t have the stability—the stamp of approval—that gives a lot of credibility to their product.”
RFIW permit holders would pay a non-refundable deposit of $100k to apply for a license, an initial $200k fee and $100k in annual renewal fees. A further $100k a year would go towards problem gambling.
Furthermore, the operators collectively would agree to contribute $20m a year for three years to the New Jersey Racing Commission “to be used to support the horseracing industry in this State through the augmentation of purses,” it was announced.
Revenues from foreign gamblers would be subject to a 10% tax on gross gaming revenues plus a 2.5% “investment alternative”—a payment towards New Jersey development—or pay an increased rate of 15% on revenues. The taxes would be offset against any taxes payable on foreign players’ own jurisdictions.
All personnel, servers and gaming equipment used to offer services to overseas gamblers must be located in New Jersey and all accounts and records would be required to be available for inspection during hours when gaming was offered.
Econsult Solutions Senior Economist, Adam Ozimek, joined Senator Lezniak for the press conference and suggested that the proposed legislation could generate as much as $4.5bn in additional annual revenues in New Jersey and produce almost 10,000 jobs.
Lezniak accepted that getting the bill past potential vetoes by Governor Christie would require some “optimism.” The World Trade Organization may also take issue with the unilateral proposal: New Jersey can offer gambling to foreign players, but foreign countries may not offer gambling to New Jersey players.
On the surface, the bill appears to be overly optimistic in its assessment of the enthusiasm operators will have for placing themselves under a New Jersey regulatory regime, rather than that offered in existing offshore jurisdictions.
