Online Gambling Protections in New Jersey Are Currently Set to Expire Despite Continued Evidence That They are Not a Drain On Brick-And-Mortar Atlantic City Casinos
The legalization of online casino play originally established in 2013 is set to expire in 2023.
This sunset clause was created to protect Atlantic City casinos from losing profits to online gambling, but all measures suggest this has not occurred.
Proposed Assembly Bill A2190 would extend the expiration date for online gambling in New Jersey, but would not permanently codify internet gaming.
Gambling online has become the norm for many New Jersey residents ever since the state legalized internet gambling nine years ago. However, many of those same online gamblers may not realize that their favorite gambling apps could go away sometime in 2023. While that is unlikely to happen, online gambling in New Jersey remains a temporary experiment rather than a permanent statutory change.
Why are New Jersey legislators hesitant to extend online gambling indefinitely within the state? Originally, legislators were concerned that online gambling could take profits from the well-established brick-and-mortar casinos of Atlantic City.
When New Jersey initiallylegalized online casino play in 2013, they were one of the first states in the U.S. to experiment with online gambling. At the time, there were a lot of unknowns revolving around how its introduction would impact established casinos within the state. Therefore, a sunset date acted as a built-in assurance for legislators to check in and see if the law needed adjusting.
The 2013 law is written such that online casino platforms are not separate entities, but rather an extension of the nine Atlantic City casinos. The selling point behind the expansion was to give those brick-and-mortar casinos another revenue source.
Initially, there were fears that online casinos might instead cannibalize the profits of brick-and-mortar casinos. That concern was particularly potent because Atlantic City casinos employ so many people in the state directly, as well as drive other industries that service the casinos.
The New Jersey Assembly’s Tourism, Gaming and the Arts Committee unanimously advanced A2190 on September 15, 2022. This bill would extend the current legal permission for casino licensees in the state to offer games over the internet through a later date in 2033, which regulators would determine.
As Nikita Biryukov of the New Jersey Monitor pointed out, the current law sunsets the legal status for online gambling in 2023. Should the legislature fail to act before then, online slots and table games in New Jersey would again become illegal.
A2190 does not yet have a companion bill in the New Jersey Senate. Should it pass, however, it would maintain the current standards and push 2023’s sunset date back by a decade.
Ralph Caputo, the primary sponsor of A2190, suggests that taking business from the Atlantic City brick-and-mortar casinos is still a concern, stating that with A2190 “lawmakers are leaving an avenue open to make adjustments in case internet betting begins to hurt in-person gambling.”
In other words, some legislatures in the Assembly are still concerned that online gambling could someday begin to cannibalize physical casino play. It is unclear exactly what action the legislature would take should that ever become the case.
What is clear, though, is that results in New Jersey and other markets with both online and retail casinos demonstrate that there is no immediate danger of that happening. Rather, both segments of the gambling industry appear to be growing simultaneously.
In August, the American Gaming Association said the entire commercial gaming industry in the United States had its best quarter ever in gross revenue. And nationwide, commercial brick-and-mortar casinos’ revenue through the first half of 2022 was up 11.7% year-over-year to $23.67 billion, according to the AGA. 2022 is on pace to be a record year for all commercial gaming in the United States.
For January through July, The AGA also says that revenue at retail casinos in New Jersey is up over 15% for January through July, when compared to the first seven months of 2021. Yet, this success has not come at the expense of online casinos in the state.
The AGA further states legal online casinos are enjoying their best year in the United States so far, up almost 44% as compared to a previous high established in 2020. Individual operators, like Everi, reported their strongest quarterly revenues ever in the second quarter of 2022.
Still the New Jersey Assembly appears hesitant to grant online gambling permanent legal status within the state. While continued extensions of the sunset date contained in bills such as A2190 provide temporary protections for online gambling, it is worth noting that such band-aid provisions limit long-term investments in New Jersey online gambling. Furthermore, the brick-and-mortar casinos of Atlantic City offer something online casinos cannot: live entertainment.
Hopefully, legislators will soon realize that New Jersey’s online and brick-and-mortar casinos can not only coexist, but thrive, alongside one another, and will decide to grant online gambling more permanent protections.
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