Governor Chris Christie (R – New Jersey), has internet gambling on his mind. The New Jersey state legislature recently passed a bill that would legalize online gambling for state residents only. The bill now sits on Christie’s desk, awaiting his signature. This ground breaking legislation would not only be the first of its kind in the USA, but also a direct challenge to the 2005 Federal UIGEA (Unlawful Internet Gambling Enforcement Act) that currently outlaws all online gambling in the nation. If approved, state lawmakers would have to go to Federal court to overturn the UIGEA, which is considered an uphill battle even if the bill has Christie’s blessing.
What is the impetus behind this ground-breaking effort? New Jersey state legislators believe legalized online gambling would bring up to 500 new high technology jobs to the state, in addition to lining state coffers will much needed tax revenue. Brick and mortar casino operations in New Jersey have suffered ever since the 2008 financial crisis, reporting steep losses in revenue and customers. These languishing “old fashioned” gambling operations now wait with baited breath, hoping they will be allowed to start their own online casino sites and become profitable once again.
This newfangled legislative effort in New Jersey falls on the coattails of Delaware’s recent move to legalize parlay sports betting. Initially, Delaware state lawmakers were hoping to fully legalize all forms of sports betting, including single game betting. Unfortunately, they experienced a backlash from professional sports lobbying groups and the NCAA (National Collegiate Athletic Association), which threatened to remove all college sporting events from the state. Delaware legislators finally agreed to move forward with parlay sports betting only, granting licenses to existing land-based gambling operations. Although this has produced significantly less revenue than originally expected, it is considered a small financial success for a state mired in debt and an unbalanced budget.
Nevada casino interests are eying the situation in New Jersey closely. The state is facing nearly 14.9% unemployment, including thousands of laid off casino workers. Additionally, the sudden ebb of gambling income has turned the housing market upside-down, forcing many residents into foreclosure. Las Vegas casino giants like Caesar’s Entertainment Group (formerly Harrah’s) and the MGM are eager to launch online casino websites of their own, hoping to recoup lost income from the exodus of tourism dollars from the state.
If New Jersey does push forward and challenge the Federal UIGEA in court, they won’t be going it alone. Representative Barney Frank, D-Massachusetts and former Chair of the House Financial Services Committee, has already sponsored bills that would abolish the UIGEA and fully legalize and regulate online gambling in the USA. Fellow members of the Financial Services Committee have agreed with Frank’s effort, passing a bill with bipartisan support earlier in 2010. It is unclear whether or not the new Congress will debate this issue.
Ultimately, once one state has legalized some “new” form of gambling, other states eventually follow suit. Nevada would be expected to follow New Jersey’s lead, in an effort to pump life back into its own economy. Other North Eastern states, like Connecticut and Massachusetts – which are home to powerful Native American casino operations – might also join the “most likely” list of states looking to subsidize state budget shortfalls with internet gaming revenue. Industry experts already cite the relative success of Canada’s legalized online gambling policy, including its state run online casinos. Whether or not the government itself would run USA casinos is unclear: in all likelihood, it will be private, well financed land-based casino companies.
In the meantime, the current offshore online gambling world remains content with the status quo. Competition from multi-billion dollar casino giants is the last thing they want. So, enjoy what might be your last “Hurrah” with casinos situated somewhere in Central America or Europe. Soon, you might be playing at online gaming sites in New Jersey or Nevada.
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