Online gaming extended for 5 more years in N.J.

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A decade after New Jersey became one of the first U.S. states to legalize internet gaming, state leaders have extended it for another five years.

Gov. Phil Murphy on Friday signed a law re-authorizing online gambling in the state through 2028, hours after both houses of the state Legislature overwhelmingly approved the bipartisan plan (A2190).

Internet gaming, which then-Gov. Chris Christie signed into law in 2013, allows people in the Garden State to play and bet money on virtual versions of poker, slots, and other games found at casinos without having to leave their homes.

It has become a big money driver for Atlantic City and the state’s gambling industry, taking in more money than any other of the five states that offer it.

Under New Jersey’s original law, authorization is set to expire a few months from now, in November 2023.

The state Senate passed the five-year extension 37-0 and the Assembly 76-2 at the Statehouse in Trenton on the busy last day before their summer break. It came the same day they approved a new $54.3 billion state budget that Murphy also signed into law.

Supporters say the online gaming market, which grew further during the coronavirus pandemic, is key to Atlantic City casinos and New Jersey’s often-uneven gambling industry, especially as nearby states expand gaming. They also stress it provides the state with tax money for important programs and warn jobs would disappear without an extension.

State Sen. Vincent Polistina, R-Atlantic, a main sponsor, said the extension will “help keep New Jersey at the forefront of an evolving gambling industry”. and “ensure stability.”

The extension relates only to online casino games and does not involve online sports betting, which is considered a separate part of the gambling industry. New Jersey legalized wagering on sporting events in 2018 — both in person and online — under a separate statute that is not poised to expire this year.

Lawmakers first considered re-upping internet gambling for 10 more years, then cut the period to two years last week without explanation. But casinos, their political allies, and South Jersey business leaders fiercely opposed that timeline, saying it was too short.

Some speculated it might have been done as leverage over the Atlantic City in terms of possibly raising the amount of gambling taxes collected by the state in the future. That rate is 8% on in-person winnings from gamblers at casinos, 13% for online sports betting, and 15% for internet gambling.

Either way, opponents warned the limited, two-year window hurt the state’s online gaming industry, and thus Atlantic City as a whole.

“No one is going to invest money in a company that has (an internet gambling identity) if you only have two more years,” state Assemblyman Don Guardian, R-Atlantic, a former Atlantic City mayor and another sponsor of the extension, told the Associated Press. “Those things cost money. This has been what’s helping keep Atlantic City alive.”

In the end, the law splits the difference at five years.

Murphy told a gaming convention in Atlantic City last year he would approve the extension, saying “New Jersey remains the leader in the rapidly evolving gaming landscape and “we are going to do whatever we can to nurture the online industry.”

“This is no fad,” he added.

The Chamber of Commerce of Southern New Jersey thanked lawmakers for shifting away from that “drastic and unexpected” two-year timeline.

“Although not the 10-year window the bill’s sponsor originally intended, this adjustment still allows for the sports betting industry to grow and thrive in New Jersey with a five-year security in its operating ability,” the chamber said.

Since New Jersey began taking internet bets in November 2013, Atlantic City’s casinos and their online partners have won $6.29 billion from gamblers, according to the American Gaming Association, the casino industry’s national trade group. That does not include money from online sports bets.

Internet gambling has been widely credited with helping Atlantic City’s casinos stay afloat during the early shutdowns of the COVID-19 crisis, as well as in the months that followed casinos reopening, when many gamblers remained leery of returning to crowded indoor spaces.

One question has been why the state hasn’t sought to make internet gaming permanent beyond 10 years. Former state Assemblyman Ralph Caputo, an Essex County Democrat who helped push the extension, said last year that lawmakers wanted to leave it open in case adjustments are needed should online gaming starts to impact in-person gambling.

Caputo also said caution remains because of an ongoing concern: that internet gaming can increase gambling addiction, especially in the wake of the isolation COVID-19 brought. A 2021 survey from the National Council on Problem Gambling showed the risk of gambling addiction has doubled since 2018.

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