NJ eyes constitutional OK for sports, Web betting
By WAYNE PARRY (AP) – 10 hours ago

ATLANTIC CITY, N.J. — Convinced that Internet gambling is coming someday, New Jersey wants to be its epicenter.

Lawmakers want voters to decide this fall if the state should offer sports and Internet gambling in an attempt to make the state the nation's leader in an emerging betting industry and stop the slow death spiral of Atlantic City casinos and the state's racetracks. That's provided, of course, that a federal ban is repealed.

Senate President Stephen Sweeney, Sens. Raymond Lesniak, Jim Whelan and Jeff Van Drew and Assemblyman John Burzichelli called Thursday for a gambling summit that would bring together lawmakers, industry leaders and policy experts.

The Democratic legislators want a constitutional amendment to be placed before voters in the November elections to maximize revenue for Atlantic City's 11 casinos and its racetracks, which are locked in a bitter struggle over dwindling gambling dollars.

"There are billions of dollars of gambling money that we're leaving on the table," said Lesniak, who represents a district in northern New Jersey, near where the Meadowlands racetrack wants to offer slot machines to attract new gamblers. That's something Atlantic City has vowed never to let happen.
"There's enough new revenue to go around for all the state's entertainment facilities instead of everyone fighting each other," Lesniak said.

The proposed constitutional amendments would pose two questions to voters this fall: Should New Jersey be able to offer sports betting, and should it be able to offer legal online versions of casino games such as blackjack, poker, roulette and other games of chance?

Lesniak, who is suing the federal government to overturn a ban on sports betting in all but four states, said he's optimistic the referendums can be prepared by the end of August in time to get them on statewide ballots this fall.

New Jersey missed out on its chance to legalize sports betting in 1991, before a federal law took effect restricting legal sports betting to states with laws allowing it already on their books. The 1992 law permitted it only in Nevada, where Las Vegas sports books determine the odds for sporting events across the country, and in Delaware, Montana and Oregon.

Republican Gov. Chris Christie has tasked a committee with studying New Jersey's gambling industry before deciding what to do about the competing demands of casinos and racetracks, both of which are withering under ferocious pressure from competitors in neighboring states.

The panel is about two weeks away from issuing recommendations.
Atlantic City is still the nation's second-largest gambling market after Las Vegas. But it's in the midst of a 3 1/2-year revenue slump that coincided with the arrival of slots parlors in Pennsylvania, where there are now nine. Next month, they also will offer table games, competing even more directly with Atlantic City.

In 2006, when the first Pennsylvania slots parlor opened and the economy was still steaming along, Atlantic City's 11 casinos brought in $5.2 billion for the year. By 2009, their combined annual revenue had fallen to $3.9 billion.
So far this year, the casinos have won $1.49 billion, down 7.9 percent from the same period in 2009.

The situation is equally dire for the state's racetracks, which say they cannot survive without slot machines to attract new gamblers.
New Jersey's casinos pay millions of dollars a year in subsidies to the horse tracks under an agreement in which the tracks are prohibited from offering slots.

"Atlantic City is dying," Lesniak said. "The Meadowlands is dying. Our racetracks are dying. We have time to get this right and craft a constitutional amendment that will maximize revenues for the state and for our tourist destinations."

Copyright © 2010 The Associated Press. All rights reserved.

I'd vote yes on the general principle of it but no if it is equal to passing the NJ legislative bill in its current form.

Joe,

1.) Does this constitutional ammendment pertain to the U.S. constitution or NJ constitution?

2.) Why is this going to a vote for the public to decide? I thought lawmakers like Lesniak wanted this? What is the point of putting it to the public? What if they vote against it...Lesniak is painting himself into a corner if public decides against this gambling?

3.) Seems like this poker bill is tied to sports betting...Why?...Poker is probably more readily acceptable when compared to sports betting...Just look at the bills before congress...IMO this poker bill will not go anywhere if tied to sports betting which will require a herculian effort to repeal...Not to mention the NFL has not 1 but 2 teams that call NJ their home...

4.) What is imega doing for players rights? We want the rakes to be fair and don't want to be taken advantage of. Just because online poker is regulated in NJ doesn't mean we have to play if the games are poor, the player pool is weak, and the rake is too high. As poker players we will continue to play on unlicensed sites and the possibility that we completely boycott licensed sites is not out of the question. What is the point of this bill if the online poker rooms are virtually empty due to unsatisfactory benefits for the players?

5.) What does this bill do specifically about player liquidity? W/out allowing residents from other states, can any joint partnership or B2B sites offer an increased player pool w/ countries outside of the U.S.? This of course is very key to the U.S. and the reason why players continue to play on pstars and fulltilt.

These lawmakers cannot and should not be making these decisions w/out the players input and organizations like the PPA...Otherwise you are wasting your time and this will be a monumental failure for everyone involved...Poker players await your response.

Michael of NJ

...

Hello Chairman Brennan,

I apologize if you felt my tone was negative. I've just been hearing many sides to this story and I was really just looking for definitive answers since you are so close to the situation. I have actually been a fan of yours for many years since Imega's first initial challenge of the UIGEA when you were really the only ones out there championing our cause. I visit your site frequently but it is hard to get a clear position from there on IMEGA's role regarding the proceedings in NJ. I thank you for responding...It seems like this process is only beginning but like many, I am clueless as to how it will end up for better or worse.

Michael of NJ

If this were to pass for poker, would that mean that as a NJ resident, I will only legally be able to play at a NJ sanctioned online poker room? And if so, will only NJ residents be able to play there? This is a fear I have had since I first heard about this possibility.

The proposed constitutional amendments would pose two questions to voters this fall: 1) Should New Jersey be able to offer sports betting, and 2) should it be able to offer legal online versions of casino games such as blackjack, poker, roulette and other games of chance?

1. Yes
2. No

The devil is in the details. What does "legal online versions" mean? There must be further details about how the constitutional amendment is actually worded. Does it make playing on unlicensed sites illegal? Does it make it illegal for unlicensed sites to offer play to NJ residents?

By definition, states would disapprove of play on sites they do not regulate. There's the growing pain. It cannot be avoided. Anyone who tells you different - that play can continue on existing sites without any problem - is not, to my mind, being honest.

What the above does not say is "who can offer poker in a regulated market?" We fully expect Stars, Tilt and others to compete to offer, in partnership with the casinos, poker in NJ. They must too, since they've all hired counsel in the state.

Will the transition be seamless and without pain? No. But with a Fed solution unlikely, do to the agenda on the Hill and electoral math, what do you do? And by that, I ask: what do you do that is practical?

Joe@iMEGA

And BTW, my take on Fed law prospects are in no way a criticism of PPA, John P. or anyone active on the issue in DC. Quite the contrary. If it were possible right now, in my opinion, it would have happened because of everything the industry and PPA has thrown at the issue. I'd prefer to see PPA win this in DC.

Chairman Brennan,

Since you let the cat out of the bag citing that Stars and Tilt have hired counsel, can you please tell me in 888 has hired council?

Please briefly explain this referendum thing? I don't understand it in the slightest bit. What is the next step in NJ? Is there a place we can go to keep up w/ the proceedings? And do you think it will go through?

You speak to A.C. executives and officially regularly...With July 18 coming and the legalization of poker tables in PA, have they even accepted the fact that A.C. is gonna be hard hit and could likely be a ghosttown. As for me, PA is only 1 hr away from me vs. 2.5hrs from A.C.

Thank you for all your efforts,
Michael of NJ

Thanks for your clear explanations, Joe. I do like the sound of it better now. I still am wary of an "Italy" solution, where our favorite sites like PS & FTP can get licensed (or at least provide a skin to b&m casino operators), but they are limited to only in-state players. If this is the best that can be gotten anywhere, on state or federal level, it is at least something. But I think it is too early to throw in the towel on the issue, and passing the NJ legislation at this juncture, when the federal legislation still has momentum for passage, can lead the country away from the better federal solution.

What momentum? Is there something beyond our "quarterly congressional hearing" that our industry's lobby has received in return for all of their hard efforts? Has Rep. Frank, who is chairman of House Financial Services, even managed through all of his efforts, to have a committee vote on his own bill? And the rumors of Sen. Reid's "poker bill" are just that: rumors.

We are coming up on the 4th anniversary of the passage of UIGEA, which means the 4th anniversary of a big effort by the industry to lobby against it. Other than the six-month delay for full implementation (which, BTW, was a huge win for John Pappas and PPA), what do we have that is tangible in the way of "momentum"?

Believe me: I'd love to have a single, one-fell-swoop solution to this. It simply does not seem that the support is there in Congress to move this, and conditions may worsen in November.

So maybe we walk and chew gum on this one. State and Federal. But real movement - as in committee and floor votes - seems to be happening at the state level.

Joe@iMEGA

Momentum on the legislative front seems to be on the State level atm. If Federal legislative efforts continue to stall and States pass legislation I fear the Fed's will give up on the issue, saying that online gaming is a state issue and states our taking steps to regulate it.

I haven't given up on the idea of Federal legislation but progress needs to be made on that front because the states aren't going to wait till Congress decides to move on this issue. I don't really like (parts of) the NJ bill (or any of the other state proposals so far) but if the Fed are unable to move legislation then some states will and we might be forced to accept a mixed bag of state laws/regualtion.

I am still hopeful of positive movement in DC, but I can't blame Joe for his pessimism. It took our opponents 10 years to get UIGEA passed, and even then they had to use a political trick. We have been at this strong for 3 years now. I do not think it will take us 10 to succeed (were smarter and have a better case), but it may.

So movement on the state front is important. As is litigation in the courts. If nothing else it keeps pressure on Congress to act. And ultimately Congress WILL have to act. International and interstate commerce is their responsibility, after all. And a hodgepodge of state internet laws in the long run benefits very few.

As state bills go, NJ is the best we have seen so far. I suspect this has a lot to do with Joe's and iMega's involvement in the matter. For an online slots player or an online blackjack player (or an online sports better if they get that) the NJ bill is a fine one as it allows for clear competition among sites and that will benefit the players.

The real problem is the bills failure to understand the unique nature of poker: poker requires an active and large playing pool to be both profitable for the site and meaningful to the player; casino games need no such thing: a player does not care how many others are at the tables or slots, and the site only needs a certain, much smaller, pool of players to profit.

If the NJ bill passes it will not be good for NJ poker players. There simply will not be enough action at most times for most players to have an experience they will find enjoyable or profitable. And this is due precisely to the bill's explicit limitation of players to those that reside in NJ. I can think of numerous, easy ways the bill can be changed to legally allow for a playing pool that is NJ residents and everyone else in the world where its legal. What I can't think of is any way to get the NJ legislature to realize that this should be done.

Perhaps it would be best for NJ to go ahead and pass the law and then see the NJ only poker site or sites spring up and ... FAIL. Fail to produce predicted revenue and fail to stop NJ players from (then illegally) playing offshore sites. Maybe that is what it will take to get them to write a decent law for poker. But I can still HOPE that NJ poker players will not need to go through all that to get something decent in a state bill.

Skallagrim

Does the PPA plan to get actively involved in lobbying in N.J, to improve upon the input iMEGA has offered to the process ?

No, they don't "plan to"; they already are, and have been from the get go, afaik.

Is the PPA supporting the online gaming referendum in NJ or not ? If so, how ?

+1 here.
France also is going the "italy" route. Dont see how NJ can do anything on its own without disregarding Federal law

I don't think the PPA has yet thrown their support behind it, although I can't say for absolutely certain. The PPA is lobbying to improve the bill from the players point of view, afaik.

PPA is lobbying in NJ.

Joe,

I have some comments. I'll preface them by reminding everyone that I do support iMEGA, especially as you all stood up for my right to play in Kentucky. I've posted this here several times, yet it seems some mistakenly think this is not the case.

I don't really agree with how you define momentum. Consider where we started. UIGEA passed the House in 2006 by a vote of 317-93, and it was a free standing bill at that time (it was HR 4411). Politicians openly and proudly opposed us, and they only do that when they think there is ZERO downside to doing so. Anti-online poker folks did a good job of building a coalition against us. The GOP even put a plank in its platform advocating a ban on online gaming.

From this starting point, poker players ensures that Congress had heard from us loud and clear. We are on offense in Congress, which is our best defense. No bills have been proposed against us since 2006, after years of anti-poker bills (see Federal online poker & gaming legislation history). We've also seen significant improvement in medial coverage (we especially saw this in Kentucky). This has all maintained the status quo, and it's the status quo that is propelling the state fight.

Imagine trying to push a state bill if the feds did successfully shut down all interstate gaming (aside from horse racing under IHA). Instead of going to states with the argument that it's already going on, Congress can't stop it, and states ought to get revenue for this existing activity, you'd instead go to states asking them to start NEW gaming.

I'm happy with our progress. Unfortunately, there is a lot of inertia in DC. Politicians still think the big government anti-gaming types enjoy the support they did twenty years ago. We're chipping away at this every day.

PPA is fighting at the federal and state level. Again, the state fight would get pretty tough if the feds were successful. Also, our opponents won't abandon hopes for a federal ban, either. Remember when Congress banned interstate sports betting in states that did not already have it? Our opponents would love the same for online poker and online casino gaming.

TE,

I'm a PPA member, so I support all that the group does. None of the above was critical of PPA, their efforts, their goals or their people. Period.

If we want to have a definition of momentum that is broad enough, then the above qualifies. If we want a more narrow definition, the above is not sufficient for US players. I have said that we should "walk and chew gum", so of course I do not want the tent pegs pulled up in DC, no have I suggested as much.

But while iMEGA is out in the weeds at the state level, parties like Harrah's actively and adamantly oppose what we're doing, to the point that they've personally vilified me in Trenton to legislators, since they can't compete on ideas. Whatever.

We've done NOTHING to oppose their efforts in DC, but they're just out for themselves alone on this, so if it's not Harrah's way, expect them to bend over backwards trying to put the brakes on you, including playing dirty.

(Note: if anyone from Harrah's wants to debate me on this point, I will be all too happy to do so.)

So TE, in the end:

PPA = great
Pappas = great
Fed bills = great
Momentum in DC = poor
State bills = great

It will be the fourth anniversary of UIGEA this fall. Based on the mid-term election projections (Dems down; GOP up) does anyone think we shouldn't be trying everything (I mean, besides Harrah's)?

Joe@iMEGA

Thanks! Glad you're a member.

I didn't take your comments to be critical of PPA. I was simply providing my take on the situation.

I think we're doing better at the federal level than you think. The fact that Harrah's is, per your own post, all-in on federal legislation tends to show where this really is.

Additionally, being strong enough on the Hill to prevent new anti-poker legislation really is worth something to poker players. As long as we can play the current sites, we players won't have to settle for whatever crumbs the states are willing to offer. They'll have to give us something we want, rather than insisting on criminalizing play on those sites. Also, the fact that we can still play on current sites does put the onus back on the federal government.

I guess Harrah's business interests don't align with the state legislation they've seen to date. I'm not too surprised, really. They probably see themselves getting stuck with small sites subjected to high state taxes.

Also, sorry to hear you've been criticized personally by Harrah's lobbyists. These fights can be tough, and you're the face of iMEGA. I know I've certainly been vilified by some for my role on the PPA Board. It was far worse in the past than it is now. It's no fun and it's very stressful to experience, but that's how it is.

Similarly, Barney Frank has been vilified by some for supporting us, while Jon Kyl, Spencer Bachus, Jim Leach, James Dobson, and Chad Hills have all been vilified by some for opposing us.

As they say, politics isn't a non-contact sport.

Companies often oppose legislation that harms their interests. Too bad so many states see gaming only in terms of money. If they put together something player-friendly and site-friendly, they'd not have this opposition.

Agree

We'll have to agree to disagree here.

They could be, but certainly are not yet. I hope these state legislators will take players' needs into more consideration. FWIW, NJ is closest.

Of course. I think we need to fight at the state level. It's too bad no state has stepped up with a player-friendly bill yet.

I have a very simple question.

Does anyone have any idea re. NJ's (or any state's) chance of getting the federal law limiting sports betting to states that already have it (Nevada) declared unconstitutional and, thus, voided?

I realize that the feds have been very successful in using the "interstate commerce" clause in the constitution as a catch-all to expand their power; however, afaik the last time they tried to tell some states that they could have something that other states couldn't have, the issue was slavery, and that lead to beaucoup problems.