On the surface, it would seem that the veto that Governor Chris Christie of New Jersey placed on the latest online gambling bill was bad news for the industry. But the reality is that everyone who advocates for the inclusion of it as a revenue generation source is actually very encouraged.
That’s because Christie added commentary to his rejection in a 31-page conditional veto letter, essentially spelling out the conditions under which he would ultimately approve it, and it is no secret that aside from some minor concerns, most of which have to do with technicalities in the law, Christie is very solidly in favor of legalization.
As a result, those who are trying to get the bill passed know exactly what they have to do to come up with a bill that would be acceptable.
Among the things Christie would like to see is more of the proceeds dedicated to treating problem gamblers, and an increase in the gross taxes from 10% to 15% on any proceeds realized from online gambling in the state. It would also be subject to a yearly review.
Because the law as it is written in new Jersey requires that any and all casino gambling take place in Atlantic City, the bill also mandated that the servers for any online operation would have to be located within the city. And only those who held existing gambling licenses in the Garden State would be eligible to hold internet gaming licenses. That, includes the twelve casinos that are already in business.
One of those casinos could be in the process of changing hands, and that could offer an entree to one of the true giants among online gambling operators. PokerStars, which is by far the largest online poker company in the world, has announced a deal to buy the Atlantic Club Hotel-Casino, which was originally built as the Golden Nugget before becoming the Atlantic City Hilton, with a bargain price of less than $50 million. This would effectively make them an automatic player in the both land-based and internet-based gaming in New Jersey, and would offer them a lot of competitive advantages, not the least of which is the fact that they are up and running right now.
Most people familiar with the gaming industry are aware that PokerStars was part of the “Black Friday” sting that destroyed several online sites in 2011, and the company got involved in some complicated negotiations with the United States Department of Justice to buy out another Black Friday victim, Full Tilt Poker. Much of this would ordinarily be expected to hurt their chances with a gaming commission that is very strict and exacting. But there were two huge dips in revenues along the Boardwalk toward the end of last year, some of which was attributable to Hurricane Sandy, and there is growing competition from Pennsylvania casinos.
The thought is that maybe PokerStars can get through with some lenient treatment from regulators, allowing an outfit with deep pockets to provide a little boost.