New Jersey operates the most successful statewide online gambling industry in America, but lawmakers in the Garden State are gearing up for international integration.
On November 30, state senator Ray Lesniak (D-20) introduced Senate Bill 3536, which would revise current regulations by allowing computer servers and other equipment used in New Jersey’s iGaming industry to be operated outside of Atlantic City.
If passed, SB-3536 – which is bears the title “An Act Allowing Location of Internet Gaming Equipment Outside of Atlantic City Under Certain Circumstances” – would pave the way for New Jersey to share its online casino and poker player pools with international operators in Europe and elsewhere.
In a concluding statement attached to SB-3536, Lesniak summarized the bill’s intent:
“Under current law, Internet gaming equipment is required to be located within the territorial boundaries of Atlantic City.
This bill allows the division to permit Internet gaming equipment to be located outside of Atlantic City if the division deems it necessary to facilitate the conduct of international Internet wagering.”
Existing regulations were put in place by the New Jersey Division of Gaming Enforcement (NJDGE) in 2013, when New Jersey legalized online gambling through licenses issued to Atlantic City casinos. Under the New Jersey State Constitution, gambling activity in New Jersey is confined to Atlantic City only, and requiring essential equipment involved in the iGaming industry to be physically located there preserves the iGaming law’s constitutionality.
But as Lesniak noted in his bill’s text, NJDGE regulations also permit player sharing agreements with other jurisdictions – including foreign nations – provided such agreements remain consistent with federal law.
In October of this year, New Jersey forged such an agreement with Nevada and Delaware, the two other states which had legalized iGaming at the time (Pennsylvania has since passed legislation to become the fourth).
And in August, a preliminary agreement to share online poker player liquidity with the United Kingdom fell through, in large part due to the current locational law.
At the time, NJDGE director David Rebuck explained how an emphasis on Atlantic City served to scuttle the U.K. deal:
“Our law is very restricted in that the gaming servers, the actual gaming servers that allow for the outcome of the game to be determined, have to be in Atlantic City, and that’s just not a business model that they were willing to adopt.
If those states will not allow their gaming servers for online gaming to be here, we really are kind of stuck, unless there is a legislative change. We’re not in a very strong position to effectuate liquidity with those restrictions.”
By removing the current restrictions and allowing similar agreements to be enacted, Lesniak’s bill would let international players access New Jersey’s online casinos and poker rooms.
So-called common operators – or iGaming companies like PartyPoker, PokerStars, and Betfair currently serving customers in New Jersey and abroad – would benefit through increased player liquidity. Per data compiled by player volume tracking site PokerScout, the New Jersey-based PokerStars platform maintains a seven-day average of just 110 active players at any one time. If connected to the international site through player sharing, that number would grow by 11,000 players.
Lesniak has spent much of his four decades in the New Jersey statehouse advocating for gambling expansion, and he issued a statement explaining where SB-3536 fits into his legacy:
“I’ve changed my mission from making New Jersey the Silicon Valley of internet gaming to the Mecca of internet gaming.
Online gaming has helped Atlantic City revive its casino sector with a success that we can expand in ways that will generate more revenue, create jobs and fuel technological innovation in gaming.”