The Development of Gambling in New Jersey
New Jersey’s history with games of chance dates back to its first lottery in 1969. In 1976, the state legislature approved land-based casino operations, making New Jersey the second U.S. state to do so.
Atlantic City casinos prospered for years, attracting visitors to the resort. By the early 2000s, however, the industry was losing ground, largely as online gaming sites gained popularity.
A proposal to legalize internet gambling in New Jersey was introduced in 2010 but failed to pass. A later bill, NJ A2578, passed in 2013. It allowed the state’s casino operators to launch online gaming sites, provided players were at least 21 years old and physically located in New Jersey.
State-Authorized Operators
Under the 2013 law, online gambling was restricted to Atlantic City casinos. Seven operators are listed as authorized to offer internet gaming sites:
- Tropicana Casino Resort Atlantic City
- Resorts Casino Hotel Atlantic City
- Ocean Resort Casino
- Hard Rock Hotel & Casino
- Golden Nugget
- Caesar’s Interactive Entertainment (an affiliate of Boardwalk Regency Corporation)
- Borgata Hotel Casino & Spa
These are the only licensees identified, although some operate multiple sites. This is allowed if the site is owned by a virtual casino licensee and its servers are physically located in New Jersey.
Applying for a New Jersey Gambling Licence
The Division of Gaming Enforcement (DGE) manages licences for land-based and internet casinos in the state. Its review applies not only to casino owners: operators, employees and companies working with casinos may also need licences. The Casino Control Act specifies requirements that include:
- Criminal background check, including fingerprinting
- Copies of state and federal securities filings
- Business Entity Disclosure Form
- Multi-Jurisdictional Personal History Disclosure Form
The Casino Control Commission
The DGE sends applications and related documents to the Casino Control Commission for review and a decision. An online casino that challenges a ruling may also have its case heard by the Commission. The body has three members: a chair, a vice chair and a commissioner.
The governor appoints Commission members, subject to confirmation by the state senate. After confirmation, members serve staggered five-year terms and may be removed only for cause.
Transactional Waivers
Casino operators must first obtain a transactional waiver before receiving a full licence. This temporary permit lets a gaming site operate on an interim basis, with access restricted to a set number of players and specific hours each day.
Sites operating under a transactional waiver are closely monitored. Inspectors review safeguards against underage betting, among other measures. Operators must also show that they track player locations accurately enough to prevent anyone outside New Jersey from wagering.
A transactional waiver generally lasts six months. If the casino has not obtained a full licence by the expiry date, it must apply for another six-month waiver. While the waiver remains in effect, the DGE may set additional conditions, including restrictions on who can hold particular roles.
Fees and Tax Contributions
Applying can be costly. Casinos must submit a $100,000 USD deposit with their application. If approved, the deposit is credited toward the $400,000 USD licence fee. The deposit is non-refundable, so applicants whose applications are rejected forfeit it.
Licences may be renewed annually for $250,000 USD. Operators must also pay a 15% tax on revenue and contribute 2.5% to the Casino Reinvestment Development Authority (CRDA).
Conclusion
New Jersey is often described as having relatively permissive gambling laws within the United States, but its licensing system is tightly regulated. The state has an interest in protecting Atlantic City casinos and its gambling industry. NJ A2578 established measures intended to protect players, deter organized crime and increase revenue for existing casinos.
