Gambling in New Jersey

Uptown section of Atlantic City, showing the Taj Mahal and Showboat casinos.

Gambling in New Jersey includes casino gambling in Atlantic City, the New Jersey Lottery, horse racing, off-track betting, charity gambling, amusement games, and social gambling. New Jersey's gambling laws are among the least restrictive in the United States; legal, in-state online gambling was instituted in New Jersey in November 2013, and the state is challenging Nevada's grandfathered federal statutory monopoly on legal sports betting.

History

Early era

Early New Jersey lottery ticket, used to help finance the construction of Queen's College (now Rutgers University) in New Brunswick.

Gambling has a long legacy in New Jersey, with the state historically being more permissive of gambling than most other states. Until they were banned in 1844, lotteries were common in New Jersey. They were used to help pay for the military during the French and Indian War and American Revolution, and help finance the construction of Queen's College (now Rutgers University) and the College of New Jersey (now Princeton University).^[1][2]

Freehold Raceway is the oldest racetrack in the United States, with horse racing having taken place there informally since the 1830s. The Monmouth County Agricultural Society was formed on December 17, 1853, and in 1854 they began holding an annual fair with harness racing at Freehold Raceway^[3][4] Monmouth Park Racetrack opened in 1870. In 1894, the New Jersey Legislature banned parimutuel gambling,^[5] and in 1897 the voters of New Jersey approved a referendum which amended the state constitution to ban all gambling (or possibly all commercial gambling).^[6]

Expansion of gambling

From 1894 to 1939, all gambling was theoretically outlawed in New Jersey, but enforcement was spotty, and it is not clear whether social gambling was prohibited. Bookmaking, numbers games, and slot machines were common through the state, many churches and other non-profit organizations openly held bingos, and Freehold Raceway operated without interruption.^[7] Racetrack gambling was re-legalized in 1939. In 1953, voters approved a referendum to officially allow non-profit organizations to have bingo and raffles. In 1959, amusement games were re-legalized after a 1957 court decision had declared them to be a form of illegal gambling.^[8] In 1970, 81.5% of New Jersey voted in favor of a referendum creating the New Jersey Lottery,^[1] and in 1975, New Jersey initiated the Pick-It (later renamed the Pick-3), the first legal lottery game in the United States where buyers could pick their own numbers.^[9]

In 1974, New Jersey voters voted against legalizing casino gambling statewide, but two years later approved a new referendum which legalized casinos, but restricted them to Atlantic City.^[10][11] At that time, Nevada was the only state with legal casino gambling. Resorts Atlantic City was the first casino to open in 1978.^[12] As part of the state's budget showdown in 2006, gambling in Atlantic City's casinos and at racetracks in the state were forced to close after it was determined that the official monitors from the New Jersey Casino Control Commission were essential and New Jersey law stated that gambling establishments could not legally operate without state oversight. The closures cost the state an estimated $1.3 million in casino revenues in addition to the loss of state taxes collected on casino employee wages.^[13]

Sports betting

In January 2012, New Jersey Governor Chris Christie signed legislation allowing sports betting in New Jersey after it was approved by a 2-to-1 margin in a voter referendum held in November 2011.^[14] The law permits any of the state's 12 casinos and 4 racetracks to offer gambling on professional and college sports, but prohibits them from accepting bets on college events played in New Jersey, or out-of-state games involving New Jersey college teams.^[15] The New Jersey Division of Gaming Enforcement subsequently issued regulations for sports betting.^[16]

The National Collegiate Athletic Association (NCAA), the National Basketball Association (NBA), the National Football League (NFL), the National Hockey League, and Major League Baseball filed a federal lawsuit against New Jersey to prevent sports betting, based on the Professional and Amateur Sports Protection Act of 1992 which banned sports betting in all but four states.^[17] In February 2013, United States District Court judge Michael A. Shipp ruled in favor of the athletic leagues, and barred New Jersey from issuing sports betting licenses. The court ruled that under the Commerce Clause of the United States Constitution, the regulation of gambling and the granting of a grandfather clause to four states is within Congress's power.^[18][19] In September 2013, a three-judge panel from the 3rd Circuit Court of Appeals voted 2-1 to uphold Shipp's decision.^[20][21] Christie said he will appeal the case to the United States Supreme Court.^[22]

Online gambling

In January 2011, the New Jersey Legislature passed a bill sponsored by Raymond Lesniak to allow online gambling by New Jersey residents over the age of 21.^[23][24] Because the state constitution only allows casino gambling in Atlantic City,^[25] the legislation specified that the computer servers operating the online gambling websites must be located at licensed casinos in Atlantic City.^[23] The Lesniak bill evaded possible federal prohibitions against online gambling by authorizing the Casino Control Commission to create regulations to ensure that the bets were placed from inside New Jersey.^[23][26] However, Governor Chris Christie vetoed the legislation because of concerns that "allowing customers to bet through any computer terminal left open the chance of commercial businesses such as nightclubs and cafes becoming gambling hubs around the state", and "the bill further created a legal fiction that a bet placed anywhere in New Jersey counted as an Atlantic City bet."^[27]

In December 2011, the United States Justice Department issued a legal opinion that the Federal Wire Act only prohibited online sports betting, and not online casino games.^[28] John Wefing, a constitutional scholar at Seton Hall Law School, told a state Assembly committee that he did not believe that a constitutional amendment was needed to authorize online gambling because "any online poker bet would not be completed until a server in Atlantic City accepted the wager,"^[29] and "wagers are contracts, and the law recognizes that contracts occur where the final action needed to take place occurs."^[30] However, State Senator Jennifer Beck has stated that online gambling cannot be legalized with the approval of New Jersey voters,^[31] and several federal courts decisions have said that an online bet occurs in both the location of the website, and the location of the gambler.^[32][33]

To address Christie's concerns, new legislation was drafted that prohibits businesses other than Atlantic City casinos from advertising online gambling, or allowing their facilities to be used for online gambling.^[34][35] On February 26, 2013, a revised bill permitting Internet gambling was overwhelming approved by the New Jersey Legislature, and then signed into law by Chris Christie.^[36] The law legalizes online casino gambling for a 10-year trial period, restricts the operation of the websites to Atlantic City's eleven casinos, and imposes a 15% tax on online gambling revenue, instead of the 8% currently imposed on casinos.^[37]

The act requires that the gambler be at least 21 years old and play from a computer in New Jersey. The gambler's location will likely be verified through a global positioning system (GPS), and the bill allows interstate compacts to be signed in future in order to authorize multistate gambling.^[37] Comps will be available, but will need to be redeemed by visiting the casino.^[38] Macquarie Capital estimates that online gambling will provide Atlantic City's casino with $260 to $400 million in additional revenue per year.^[39] The Casino Control Commission will create regulations for online gambling. It is unclear when online gambling licenses will be issued, or if there will be any legal challenges to the new law.^[36]

In October 2014, New Jersey state regulators reported revenue of over $100 million since regulation began in November 2013.

Expansion of casino gambling outside Atlantic City

The proposed New Jersey Casino Expansion Amendment resulted from an agreement among Gov. Chris Christie and Democratic state legislators. State legislators were in deadlock over who would be allowed to own new casinos and tax revenue sharing. The measure does not say where the casinos would be allowed. Location and other matters such as tax rates would be determined by enabling legislation to be passed by the state legislature. A law passed by popular vote in 1976 gives Atlantic City a monopoly on casino gambling in New Jersey.^[40][41]

An analysis by Fitch, a credit-rating agency, determined that as many as four of Atlantic City's eight casinos would be bankrupted by expanding casino gambling outside the city. Supporters of gambling in North Jersey say that the measure would help Atlantic City by redirecting as much as $200 million a year in tax revenue to the city. Opponents say that it is unlikely that much revenue would be generated and that it would not make up for the losses due to new competition. In recent years four Atlantic City casinos have closed, causing severe economic problems.^[42][43]

Casino gambling

New Jersey currently has seven casinos, all of which are located in Atlantic City. In 2011, New Jersey's casinos employed approximately 33,000 employees, had 28.5 million visitors, made $3.3 billion in gaming revenue, and paid $278 million in taxes.^[44] They are regulated by the New Jersey Casino Control Commission and New Jersey Division of Gaming Enforcement.

Current casinos

• The Wild Wild West Casino is officially part of Bally's, but is often considered by the public to be a separate casino.

Renamed casinos

Closed casinos

Cancelled casinos

New Jersey Lottery

New Jersey currently has 7 types of lottery games, which are sold by retailers around the state. The games are overseen by the New Jersey Lottery Commission, and the revenue is used to award prize winners (59%), raise money for education (34%), pay commissions to retailers (6%), and cover lottery administrative cost (1%).^[46]

Current games

Former games

Horse racing & off-track betting

New Jersey currently has four racetracks and four off-track betting (OTB) halls, all of which are regulated by the New Jersey Racing Commission (an entity of the New Jersey Office of the Attorney General).^[47] The state passed a law in 2013 permitting one horse race per year on a New Jersey beach, and Monmouth Park will be conducting a beach race in Atlantic City based on the Palio di Siena.^[48][49]

Current racetracks

Current off-track betting halls

Former racetracks

Charity, amusement, and social gambling

New Jersey allows non-profit organizations to run bingos and raffles.

The state of New Jersey allows charity gambling, where non-profit organizations (e.g., churches, fraternal organizations) to run bingos, raffles, casino nights, and armchair races.^[50] Amusement parks, carnivals, and boardwalks in shore communities are allowed to have amusement games involving skill or chance (e.g., spinning wheels, skeeball).^[51] Charity gambling and amusement games are regulated by the New Jersey Legalized Games of Chance Control Commission.

New Jersey permits social gambling (e.g., workplace football pool, a family poker game) insofar as the organizer of the game is on equal terms with the other participants, and does not take a cut of the gambling proceeds. Furthermore, it is never a criminal offense in New Jersey to be a player in a gambling operation.^[52] However, the New Jersey Alcoholic Beverage Commission prohibits bars and other holder of liquor licenses from allowing social gambling.^[53]

Illegal gambling

Each year billions of dollars of illegal gambling takes place in New Jersey.^[54] Illegal gambling operations range from employees who make money on office sports betting pools to online poker websites to multimillion-dollar enterprises run by organized criminals.^[55][56] Despite the availability of legal gambling in New Jersey, studies have shown that illegal gambling persists because it offers options that are not available legally (e.g., casino gambling outside of Atlantic City), and because some gamblers prefer using a bookmaker who they personally know.^[57] State law does not punish players, but a person operating an illegal gambling enterprise, or possessing equipment or records used for illegal gambling can face up to 5 years imprisonment depending on the quantity and size of the bets.^[58] However, illegal gambling arrests are rare in New Jersey, and there is presumption of non-incarceration for first-time offenders.^[59][60]

Minimum age

A person must be 21 years of age to gamble at a casino in New Jersey.^[61] It is legal for a minor to go to a casino, insofar as they do not gamble, consume alcoholic beverage, or remain on the gambling floor.^[62] Underage gambling at a casino is a disorderly persons offense (misdemeanor), punishible by a $500–$1000 fine and a mandatory six-month driver's license suspension, and plea bargaining of underage gambling charges is prohibited.^[63] The legal age for other forms of licensed gambling (e.g., lottery, horse race) is 18, but a person under 18 may take part in amusement games where the prize is an item (e.g., a stuffed animal), and not cash.^[64] There is no minimum age for social gambling.

See also

• Law of New Jersey

References

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