Senator RAYMOND J. LESNIAK
District 20 (Union)
Allows Internet gaming equipment to be located outside Atlantic City for certain international gaming purposes, subject to Division of Gaming Enforcement approval.
CURRENT VERSION OF TEXT
An Act allowing location of Internet gaming equipment outside of Atlantic City under certain circumstances and amending P.L.2013, c.27.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.2013, c.27 (5:12-95.17) is amended to read as follows:
1. The Legislature finds and declares that:
a. The 1976 amendment to the New Jersey Constitution that amended Article IV, Section VII, paragraph 2 thereof, and the "Casino Control Act," P.L.1977, c.110 (C.5:12-1 et seq.), that authorized casino gaming in Atlantic City casinos clearly demonstrate, both through their text and their legislative history, that a fundamental goal of these enactments was to achieve the rehabilitation of Atlantic City as a tourist and resort destination; and
b. As recognized in the July 2010 Report of the Governor's Advisory Commission on New Jersey Gaming, Sports, and Entertainment, and as confirmed in subsequent legislative hearings held in Trenton and throughout the State culminating in the enactment of significant bipartisan reform legislation in February of 2011 (P.L.2011, c.18 and P.L.2011, c.19), legalized casino gaming in New Jersey presently stands at a crossroads, facing critical regional and global challenges that jeopardize its important role in the State's economy; and
c. The State and New Jersey's general public possess a vital interest in the success of tourism and casino gaming in Atlantic City, having established a limited exception to the general policy of the State concerning gaming for private gain under Article IV, Section VII, paragraph 2 of the New Jersey Constitution within Atlantic City, which by reason of its location, natural resources, and historical prominence and reputation as a noteworthy tourist destination, has been determined by the people of this State, the Legislature, and the Governor to be a unique and valuable asset that must be preserved, restored, and revitalized; and
d. The tourist, resort, and convention industry in Atlantic City constitutes a critical component of our State's economic infrastructure that, if properly regulated, developed, and fostered, is capable of providing a substantial contribution to the general health, welfare, and prosperity of the State and its residents; and
e. As recognized in the State Constitution and the Casino Control Act, as well as in P.L.2011, c.18 and P.L.2011, c.19, an important component of the State's historical and ongoing commitment to Atlantic City involves creating and maintaining a robust casino gaming industry that is capable of competing regionally, nationally, and internationally at the highest levels of quality while, at the same time, fully retaining strict State regulatory oversight to ensure the integrity of all casino gaming operations conducted in this State; and
f. Since the development of the Internet, millions of people have chosen to gamble online through illegal off-shore operators, and such gambling is conducted without oversight, regulation, enforcement, or consumer protections, all of which raise significant concerns for the protection of individuals and consumers in this State; and
g. In October 2006, the United States Congress passed the Unlawful Internet Gambling Enforcement Act, 31 U.S.C. 5361 et seq., which generally prohibits the use of banking instruments, including credit cards, checks, and fund transfers, for interstate Internet gambling, essentially prohibiting online gambling by United States citizens, but which includes exceptions that permit individual states to create a regulatory framework to enable intrastate Internet gambling, provided that the bets or wagers are made exclusively within a single state under certain circumstances; and
h. An effective State regulatory and licensing system for participating in online gaming would increase public trust and confidence in legalized gambling, inhibit wagering by underage or otherwise vulnerable individuals, ensure that any games offered through the Internet are fair and safe, end the practice of sending much-needed jobs and tax revenue overseas to illegal operators while creating jobs and economic development in Atlantic City, and ensure that only those of good character and fitness who meet strict criteria may participate in Internet gaming operations in New Jersey; and
i. Moreover, providing regulators and law enforcement with the tools to restrict and stop the illegal Internet gambling market that takes place via the Internet in foreign jurisdictions and authorizing strict controls over how Atlantic City casinos may accept wagers placed over the Internet for games conducted in Atlantic City casinos will assist and enhance the rehabilitation and redevelopment of existing tourist and convention facilities in Atlantic City consistent with the original intent of the Casino Control Act and will further assist in marketing Atlantic City to customers that now have the convenience of gambling in jurisdictions closer to their homes through the legalization of gambling in states throughout the United States over the past three decades; and
j. Internet gaming, as defined and strictly limited in P.L.2013, c.27 (C.5:12-95.17 et al.), is unlike pari-mutuel wagering and other forms of remote gambling and will take place entirely on the servers and computer equipment located in the casino based in Atlantic City or in another facility in Atlantic City owned or leased by the casino licensee and thereby considered to be part of the casino hotel facility that is secure, inaccessible to the public, and specifically designed to house that equipment, and where the equipment will be under the complete control of a casino licensee or its Internet gaming affiliate. By contrast, in off-track pari-mutuel simulcast wagering, the customer places a wager at an off-track facility, the wager is accepted by the off-track facility, as evidenced by issuance of a ticket, and any amounts paid on a winning wager are paid out and received at the off-track facility. Any rights on the part of a customer in the event of a dishonored, misdirected or other frustrated pari-mutuel wager arise against the off-track facility where the wager is placed and received, not against the remote track at which the race is run; and
k. [Internet gaming as authorized and limited under this act, on the other hand, requires that all hardware, software, and other equipment that is involved with Internet gaming will be located in casino facilities in Atlantic City or in other facilities in Atlantic City owned or leased by a casino licensee and thereby considered to be part of a casino hotel facility that are secure, inaccessible to the public, and specifically designed to house that equipment, and where the equipment will be under the complete control of a casino licensee or its Internet gaming affiliate. All that is needed by a customer is a computing or similar device of general application and a communications connection through a common carriage or similar medium. For example, in an online poker or other card game, the "table" is the server hosted by the operator in the casino premises in Atlantic City. The "cards" are played on that table in Atlantic City, and the wager is placed on and accepted at that table. No activity other than the transmission of information to and from the players along common carriage lines takes place outside of Atlantic City; and
l. Pursuant to the 1976 amendment to the New Jersey State Constitution and the express authorization to the Legislature to determine the type of gambling games that may be conducted in casinos under regulation and control by the State, the Legislature hereby declares that in furtherance of the goals of the Casino Control Act and in recognition that the technologies necessary to support Internet gaming can be prescribed and implemented in a manner that ensures all such gambling activity occurs within casinos located in Atlantic City or in other facilities in Atlantic City owned or leased by a casino licensee and thereby considered to be part of a casino hotel facility that are secure, inaccessible to the public, and specifically designed to house Internet gaming equipment, and where that equipment will be under the complete control of a casino licensee or its Internet gaming affiliate, it is appropriate that the Casino Control Act be amended and supplemented to authorize licensed casino operators to conduct such games within the casino premises with all wagering to be conducted solely within the casinos] In the coming years, the global online gambling market is expected to see a compound annual growth rate, and the largest share of online gambling revenue comes from Europe totaling nearly $15 billion a year and growing at a faster rate than the rest of the world; and
l. Since its inception under P.L.2013, c.27 (C.5:12-95.17 et al.), Internet gaming has resulted in economic benefits to Atlantic City and to this State, and is estimated to have produced, within the first three years of implementation, approximately $998 million in economic output, over 3,000 jobs, $219 million in employee wages, and $124 million in tax revenues, of which $84 million derive from Internet gaming revenue alone. The provisions in this act, P.L. c. (C. ) (pending before the Legislature as this bill), permitting Internet gaming equipment to be located outside of the territorial boundaries of Atlantic City if necessary to facilitate the conduct of international wagering, would increase the economic benefit of Internet gaming to Atlantic City and to this State.
(cf: P.L.2014, c.23, s.1)
2. Section 29 of P.L.2013, c.27 (C.5:12-95.31) is amended to read as follows:
29. Notwithstanding any other provision of P.L.2013, c.27 (C.5:12-95.17 et al.), wagers may be accepted thereunder from persons who are not physically present in this State if the Division of Gaming Enforcement in the Department of Law and Public Safety determines that such wagering is not inconsistent with federal law or the law of the jurisdiction, including any foreign nation, in which any such person is located, or such wagering is conducted pursuant to a reciprocal agreement to which this State is a party that is not inconsistent with federal law. The division may permit Internet gaming equipment to be located outside of the territorial boundaries of Atlantic City if the division deems it necessary to facilitate the conduct of international wagering permitted under this section.
(cf: P.L.2013, c.27, s.29)
3. This act shall take effect immediately.
Under current law, Internet gaming equipment is required to be located within the territorial boundaries of Atlantic City. Current law also permits the Division of Gaming Enforcement in the Department of Law and Public Safety to allow the acceptance of wagers from persons outside of this State if the division determines that such wagering is not inconsistent with federal law or the law of the jurisdiction, including any foreign nation, in which any such person is located, or such wagering is conducted pursuant to a reciprocal agreement to which this State is a party that is not inconsistent with federal law.
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.