NJ online poker legislation (passed)

[As armas]

The two versions are close to matching but I found two major differences:

1) The senate version calls of a 10% tax of gross revenue, while the assembly version is 20%.

2) The assembly version has this ridiculous 270 days that must pass from its enactment to the 1st hand of poker being dealt. The senate version does not have this.

I can't see the 270 day thing staying. I mean why would anyone fight for that to stay in? The % tax could be a big fight. Alot of support for the bill comes from Democrats who see this bill as a means of raising revenue for state entitlement programs for old people. By law a good amount of the money made from AC gambling goes to these programs.

[BlaneH]

Lesniak commented on the tax difference during the last Assembly meeting on the bill. He basically said he hopes they can just meet in the middle at 15%. I posted about the 270 day thing when I first saw it. Absolutely pointless amendment. I have no idea why they even would put it there to begin with. It's just some arbitrary barrier.

[Duck Rabbit]

Anyone have a sense of whether 20% is high or if 10% is low? What kind of rake do you think we'd be looking at with both levels of taxation?

[tamiller866]

I believe Italy is 20% and Spain announced 25%, so 10% would seem low.

[PokerXanadu]

Originally Posted by Duck Rabbit

Anyone have a sense of whether 20% is high or if 10% is low? What kind of rake do you think we'd be looking at with both levels of taxation?

It depends somewhat on the final details, such as whether it is taxation on gross revenues or net revenues after promotions. For instance, if the sites give on poker rakeback, deposit bonuses, jackpot prizes, player point awards, etc., do they subtract such things from revenue before figuring the tax?

Most likely, it will be taxation on gross revenue without any such deductions. In this case, 20% is edging toward the higher end for poker, but mid-range for all the other gaming. 10% would be fairly low.

Note: For poker, a 10% deposit tax is about equivalent to a 25% gross revenue tax.

[midas]

Originally Posted by Duck Rabbit

Anyone have a sense of whether 20% is high or if 10% is low? What kind of rake do you think we'd be looking at with both levels of taxation?

My bet is the online rake is the same as B&M in NJ - 10% max 4.

[sba9630]

Originally Posted by As armas

... I can't see the 270 day thing staying. I mean why would anyone fight for that to stay in? ...

Whenever a new government program or regulation comes about, one of the standard questions asked around the conference table is: "How long will this take to implement?" Common answers are: 3, 6, 9, 12, 18 months, etc. Since 270 days is 9 months, and unless there's some statutory reason it has to be in place, I'm sure someone just threw that number out there and they just went with it.

Once it's written in legislation, I'm not sure how you get around it.

[GMan42]

Originally Posted by midas

My bet is the online rake is the same as B&M in NJ - 10% max 4.

If it is, I don't even know why I'm sweating this.

[novahunterpa]

Has anyone heard if Chiesa (NJ's AG) has let Christie know his stance on the constitutionality of going forward with online gaming without a voter referendum.

Last I heard this was still a potential sticking point and that Christie was waiting for clarity from the AG's office.

[BlaneH]

The same AG that is encouraging him to flaunt federal sports betting laws? I would think he is gonna go with the expert testimony that says it's not necessary for referendum.

[raradevils]

Originally Posted by midas

My bet is the online rake is the same as B&M in NJ - 10% max 4.

Why does it need to be that high? They don't have to pay dealers.

[OneOut]

Originally Posted by raradevils

Why does it need to be that high? They don't have to pay dealers.

Because it can be and they either don't know any better or don't care?

[dmyers1166]

Originally Posted by raradevils

Why does it need to be that high? They don't have to pay dealers.

If there is any competition it will be less, no dealer costs and employee costs are one of the biggest factors in any business. No facilities costs, insurance and just maintenance. Online is way less costly than B&M. 5%/$3 max is really high online, see Cake/Merge and basically unbeatable. If the fish pool is expanded then it can be beat, but then the fish will go broke very fast at these rake levels.

B&M plays so slow that the rake doesn't completely eat weak players alive, online it will just run through the bankroll like stuff through a goose.

[GMan42]

I agree, in theory they have lots of reasons to keep rake low. The thing that worries me is that if they make tons of money off their online BJ/Roulette/slots/whatever, they may not give two ****s that no one's playing hold 'em because their rake structure is unworkable. I really wish this bill were poker-only.

[raradevils]

Originally Posted by GMan42

I agree, in theory they have lots of reasons to keep rake low. The thing that worries me is that if they make tons of money off their online BJ/Roulette/slots/whatever, they may not give two ****s that no one's playing hold 'em because their rake structure is unworkable. I really wish this bill were poker-only.

Not I. I want people to "stumble" into the poker section after they just won at BJ or slots and give it a go...after all they watched it on TV once and it looked so easy with the hole cams.