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Ray Lesniak Reintroduces International Internet Gambling Bill in New Jersey

Welcome to New JerseyNew Jersey state Senator Ray Lesniak, a vocal proponent of that state’s casino and tourism industries, has reintroduced a measure that seeks to open up New Jersey’s new state-authorized online gambling sites to international players.

Lesniak’s latest bill, S980, also includes State Sen. Jim Whelan as a second primary sponsor.  The bill was reintroduced last week after an earlier version, S3084 of the New Jersey 2012-13 legislative session, was introduced but allowed to die before being acted on by the end of the year.  It is possible that the duplicated introduction of the bill was done to allow Lesniak and Whelan to confirm to promises made to industry backers to introduce the bill in 2013, though it was never going to receive serious consideration before the current year.

No information specific to the new S980 has been published yet, but it is likely to be identical or highly similar to the old S3094, which was untitled but was designed as a series of amendments to New Jersey’s primary gambling-authorization law, the Casino Control Act.  The old S3094’s synopsis was “Authorizes licensing of operators to provide restricted foreign Internet wagering under certain circumstances,” while in S980, that has been updated to “Authorizes permits for certain New Jersey casinos for interstate and foreign Internet wagering; requires Internet gaming payment processors be licensed as casino service industry enterprises.”

The slight shifting of language may reflect the possible inclusion of provisions designed to allow foreign-only operators to receive New Jersey authorization, providing those operators were willing to locate their operations within the state.  Such operations would not necessarily be open to New Jersey residents.  Under such a scenario, New Jersey would serve as a licensing agency, much as the Isle of Mann or other European regulatory regimes.

The raw text of the uncompleted S3094 is likely to make up a good share of what appears in the new S980, once it has been brought into the state’s legislative processing system.  Like the old bill, Lesniak’s latest version is likely to be sent to the state Senate’s Wagering, Tourism & Historic Preservation Committee for initial debate.

The old S3094 included this passage, detailing its intent:

Authorized games and authorized gambling games may be offered to persons located outside the United States, and solely outside the United States, by any foreign casino, casino room, or licensed casino that obtains a restricted foreign Internet wagering license from the Division of Gaming Enforcement.  No restricted foreign Internet wagering licensee, other than an Atlantic City casino otherwise licensed by the State of New Jersey to offer Internet wagering, may offer wagering to any person located in New Jersey or any other location within the United States.  For the purposes of sections 2 through 27, inclusive, of this act, P.L.      ,          c.   (C.   ) (pending before the Legislature as this bill), authorized games and authorized gabling games shall include wagering on sporting events taking place outside of the United States, but shall not include wagering on horse racing.

If similar is included in S980, the nod to allow sportsbetting would also be contingent on New Jersey ultimately winning its battle with the US federal government to allow sportsbetting within its borders, and in the process break Nevada’s virtual monopoly on that activity within the US.  Both the old and new (presumably) are expressly international-only in nature.

Lesniak’s earlier bill also included a higher taxation rate on international gross proceeds, 15%, than the 8% charged on revenue generated from in-state online play.  A similar rate is possible in the new S980, which would bring up the question of whether international operators would find New Jersey licensing worthwhile.  In recent years, many of Europe’s largest online operators have relocated to Gibraltar, which after a flat-rate licensing fee is essentially tax-free.

FlushDraw will provide a detailed look once the complete text of the new S980 becomes available.

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