Removal of Bad Actor Clause in NJ Could Mean the Return of PokerStars to US Removal of Bad Actor Clause in NJ Could Mean the Return of PokerStars to US
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Recent modifications made to the New Jersey online gambling bill, Assembly Bill A2578, which includes provisions for online poker, include changes which could possibly open the door to the return of PokerStars and Full Tilt—now also owned by Stars—in the event the bill moves forward.

As noted in a recent fuse piece, the bill’s proponents believe that action could be taken this month on the measure. Earlier versions of a New Jersey online gambling measure have passed the state’s legislature before stalling on the desk of NJ Governor Chris Christie.

The latest changes to A2578 include removing “bad actor” language that applied an arbitrary, post-UIGEA cutoff date of December 31, 2006 to existing online sites that were deemed to have “made available bets or wagers to persons located in the United States,” regardless of whether said bets or wagers may have been legal.

Such statutory language has already been the subject of preliminary battles at both the state and federal level for its possible presumptive denial of due process.

Instead, the latest version of A2578 shifts responsibility for these sites’ legal eligibility to a combination of state and federal determination of their adherence to existing gambling laws.

According to the latest version, sites headquartered outside the US or who do significant international business will be subject to review during the applications process. According to A2578:

[A]s determined by the Division of Gaming Enforcement, the division shall consult with officials of the United States Department of Justice prior to making a recommendation to the Casino Control Commission regarding licensure of the applicant.

The revised bill language continues by charging New Jersey regulatory officials with the need to “review each Internet gaming affiliate applicant’s past history… in the context of past and current Federal and State law.”

The measure then creates a mechanism for state officials to apply special conditions and limitations to firms they have found to be in violation of specific laws.

At the very least, the new version of A2578, if passed, creates a window of opportunity for a site such as PokerStars to apply for licensure, and then to plead its specific legal case before New Jersey regulators. PokerStars remains in a superior position to most other post-UIGEA, US-facing sites for its adherence to poker-only services.