NJ Online Casino Cuts Planned Extension of Licenses
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NJ Online Casino is in the news—with a bit of uncertainty emerging as a result.
While finalizing the new budget, the New Jersey Legislature extended the state’s existing licenses for online casinos. However, the apps that have brought millions to operators and helped stabilize the gaming industry during the COVID-19 pandemic may not be around as long as planned.
Legislation introduced last September in the Assembly and Senate initially called for the 10-year licenses to be renewed for the same length of time. New Jersey first allowed their well-known casinos to offer online gaming in 2013, in an attempt to infuse revenue to the brands following the 2008 recession and failure to see business return to Atlantic City.
However, on June 27, the Assembly version saw the length inexplicably cut to two years, while the Senate bill received an amendment dropping the timeframe to five years. The Assembly would reconcile this time length the following day, which was signed into law by Governor Phil Murphy.
On one hand, the legislation brings the Garden State more in line with Pennsylvania online casinos, which began offering the licenses in five-year increments when iGaming was first legalized in 2017 and offered to players in 2019.
On the other hand, this appears to be some backdoor dealings that did not appeal to public interest or scrutiny, stripping New Jersey of a competitive advantage while New York grows to be the dominant state in sports betting, fueled by millions wagered each week on sportsbook sites and apps.
So what led to this last-minute change? Well, the Democrats who control both chambers in Trenton have yet to release a formal statement, over two weeks later, on the sudden change. It certainly drew some ire online, with members of the online gaming and sports betting community criticizing the decisions, especially the lack of transparency in the trimming of the extension.
One source from the Senate Republicans pinned the change on Speaker Craig Coughlin and his influence on the lower chamber. An attempt to reach his district office in Woodbridge was met with a full voicemail box.
The expansion of gambling to the online sphere, both in traditional casino games and sports betting, has been an unquestionable success for the Garden State. Atlantic City weathered economic downturns and the loss of months of visitors during early 2020. What helped? People could wager online.
That money goes to the casino companies, which also funds local and state taxes. Unlike the rollout of recreational cannabis, this has gone rather smoothly and has been met with considerable consumer demand.
Many of the apps that are offered in New Jersey also are available in Pennsylvania. The Keystone State has also benefited from online gaming, with the Northeast becoming a hotbed for activity.
These state governments continue to collect tax revenue while other states like Florida, Texas, and California struggle to create the legislative infrastructure to benefit the millions that live there and would likely bet.
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Those who follow the industry are concerned the failure of long-term extensions of licenses could damage relationships with the state’s longtime gaming companies. Requests for comment from BetMGM, the parent company of Borgata, and Caesars went unreturned.
