New Jersey No is Thinly Disguised Yes

Despite most stakeholders urging him to sign, Gov. Chris Christie repeated his 2011 veto of legalized online gambling in New Jersey. Announcing his decision in writing on Thursday, the last day of the legal deadline, Christie nevertheless gave online gambling proponents reasons to rejoice.

Presenting his reasons for the veto he mentioned the possible social impacts of legalization, as well as the potential danger of declining casino tourism.

At the same time, the governor expressed his general support for the efforts to have legal and regulated Internet gambling in the state that also comply with American gambling laws.

“Now is the time for our state to move forward, again leading the way for the nation, by becoming one of the first states to permit Internet gaming. While Atlantic City’s reputation and stature as one of the premier resort destinations on the East Coast are well-chronicled, it is no secret that revenue from the region’s most important industries, gaming and tourism, has been in decline,” read the governor’s statement.

Outlining the necessary steps before he could sign a similar bill, Gov. Christie listed some required changes and safeguards.

In terms of the social costs Gov. Christie called for greater funding of compulsive gambling treatment programs, as well as “an annual analysis of the potential problems and harms associated with these new games”. These expenses would of course be covered by the licensed operators.

With regards to the safeguards, he demanded full transparency in the system affecting all stakeholders, including lawmakers, who would have to disclose any connection with the operators applying for a license.

Furthermore, the governor wants to see a 15% revenue tax on gambling instead of the 10% proposed by the vetoed bill. The tax rate for land based casinos currently stands at 8%.

The original proposal would have allowed playing any of the games online that are currently on offer at Atlantic City casinos. This would have made New Jersey for instance the 3rd state after Nevada and Delaware making it legal for their residents to play online poker in US.

Industry reaction to the decision was overwhelmingly positive, especially for a vetoed legislation.

Tony Rodio, President of the Casino Association of New Jersey said that the “industry believes that Internet gaming is essential to the continued stabilization, development and success of Atlantic City through the generation of meaningful revenue, jobs and resultant tax revenues — objectives the governor has always facilitated.”

The highly supportive tone of the statement also means that PokerStars parent company, The Rational Group, will go ahead with plans to purchase The Atlantic Club Casino Hotel.

Welcoming the statement, Head of Corporate Communications, Eric Hollreiser reaffirmed the group’s intent to establish a land based presence in Atlantic City. “We have consistently said that this bill will drive economic development and job creation in New Jersey and are committed to play our part in that process,” said Hollreiser.

Legalization supporter State Senator Raymond Lesniak expressed his conviction that a new proposal, incorporating Gov. Christie’s demands, could pass very quickly. It is estimated that such a bill could become law in less than two months.

The subsequent implementation could see operators setting up business as early as this year. This would be a major step forward in improving access to online casinos in US.

Which is nice and all, but it raises one inevitable question. If the governor is so supportive and the changes he is asking for are so easy to incorporate, then why wasn’t all of this discussed between the legislative and the executive branches before submitting the bill? Could we be witnessing some theatrics aimed at placating the opponents of legalized online gambling?