New Jersey to allow foreign firms for online gaming

2014-03-26

Reading time 1:38 min

(US).- The New Jersey Senate panel has approved a bill that would allow foreign online gambling operators to base their operations in the state if they shift their activities to Atlantic City. The measure, which was sponsored by state Senator Raymond Lesniak, will see foreign firms pay the same 15 percent tax that New Jersey’s casinos do on Internet revenue.

Once licensed and partnered with an existing Atlantic City casino, the companies could then offer gambling, as well as online poker, in countries where it is legal.

“This could help make New Jersey the leader in online gaming, across the country and around the world,” said Lesniak in a statement. “We could be the Silicon Valley for high-tech gaming. We should take advantage of this dynamic opportunity for a business sector with enormous growth potential.”

Any products offered by these foreign operators would also be subject to New Jersey’s existing 15 percent tax rate, minus any taxes given to other countries for their resident’s play.

New Jersey recently revised their online poker market projections from the online gambling industry and is now on pace to collect us$34 million in tax revenue. Any business brought in from off-shore operators would only help to improve those numbers.

The state Senate Government, Wagering, Tourism and Historic Preservation Committee approved the bill, He says many overseas gambling companies want the stamp of approval that would come from submitting to New Jersey’s casino regulators, who are reputed to be among the strictest in the nation.

But lawmakers dropped a provision in the original bill requiring the companies to contribute to a fund to raise US$20 million a year for three years to help New Jersey’s struggling horse racing industry.

“International Internet gaming is already taking place,” said Sen. Jim Whelan, D-Northfield, a former Atlantic City mayor. “This gives Atlantic City the opportunity to build and expand on its casino business. We have the stability and security of a regulated marketplace, we have an educated workforce, and a high-tech infrastructure. We can make New Jersey and Atlantic City a digital destination for Internet gaming.”

Internet gambling has started slowly in New Jersey. The state began online betting in November to help Atlantic City’s 11 casinos compete with gambling options in nearby states.The casinos’ online operations have won $19.7 million in this year’s first two months.Nearly 250,000 online gambling accounts have been created in New Jersey since the state began Internet betting on Nov. 21.

The bill now goes to the state Senate Budget and Appropriations Committee.