New Jersey Governor Chris Christie signed
A2578 into law on February 26, 2013. It legalized online poker and casino games in New Jersey. The bill had broad support in both chambers of the New Jersey Legislature. It passed the Senate 35-1 and the Assembly 68-5.
New Jersey online gambling is expected to generate about $500 million a year in revenue. New Jersey will tax online gambling revenue at a rate of 15%. This is nearly double the 8% tax rate imposed on Atlantic City’s gross gaming revenue. Atlantic City casinos are also required to reinvest 1.25% of their brick and mortar gaming revenue into capital projects to create jobs. Online gambling revenue will not be subjected to this tax.
All gaming servers must be located in Atlantic City. Play will available to any
one that is physically located in New Jersey at the time of play. The proposed launch date for online poker and casinos is November 26, 2013. There will be a 5-day test launch starting on November 21, 2013 to ensure that all systems are working properly.
The only companies that will be allowed to operate online gambling in New Jersey are the Atlantic City casino owners. At this time there are 12 potential operators. Ten of these operators have announced potential software providers. Only Atlantic Club and Revel have yet to announce any partnership. These two casinos will not join the industry at its start.
Over 70 companies have applied for an interactive gaming license in New Jersey. Only about half of these applicants have come forward. The New Jersey Division of Gaming Enforcement will not announce the companies involved in the process unless they are approved for licensing.
Atlantic City has fallen on hard times. The State hopes that online gambling can help its ailing casino industry. New Jersey fell to number three in the US in terms of gaming revenue for the first time in 2012. Pennsylvania, where many former Atlantic City customers were based, overtook the number two spot.
Atlantic City casino revenue has fallen every year since 2006. It is down 41% from its peak. Even worse for Atlantic City, it has not found a way to substantially improve its nongaming revenue to offset these losses.
One advantage Atlantic City has over Nevada and Delaware, the only other states to legalize online gambling, is that it has large population bases at its borders. Players in Philadelphia and New York City are a short drive across the river away from playing online poker or casino games.