NJ egaming bill set to be signed into law today
Regulation permits any games currently played inside Atlantic City casinos to be offered online " shares of NJ operators see boost in anticipation.
New Jersey Governor Chris Christie is expected to sign an egaming bill into law today, legalising online poker and casino games in the state for the first time and breathing new life into the local economy and wider US online gambling market.
The bill “ initially handed a conditional veto by Christie earlier this month “ is subject to a vote in the Assembly and Senate at a session beginning at 2pm EST. If approved, it will immediately be delivered to the Governor’s desk in order for him to sign it into law.
Sources in New Jersey described today’s hearing and subsequent signing as “a formality”, meaning New Jersey would become the third state to regulate egaming after Nevada and Delaware by the end of today.
Christie’s conditional veto on 7 February came as a somewhat surprising breakthrough with those close to the matter, including bill sponsor Senator Raymond Lesniak, believing Christie would, at best, call for it to be poker-only. The Governor vetoed an almost identical bill in 2011 citing fears of problem gambling, corruption and a detrimental effect on land-based casino revenues.
However, at the second time of asking he asked for online winnings to be taxed at 15% rather than the suggested 10%; for the law to “sunset” or undergo a complete review after 10 years; for licence fees to be doubled; and that state-elected officials disclose their past and present representations of entities seeking or holding internet gaming licences.
At the time Lesniak told eGR North America that he saw no reason why the amendments couldn’t be made, adding Christie’s decision was “better late than never”.
Attention will now turn to the operators fighting it out for early mover market share. The state’s larger population of 8.8 million and inclusion of lucrative casino products including slots, means it is immediately a more attractive prospect than Nevada which boasts a population a third the size (2.7 million) and has limited its regulation to poker only.
According to data specialists H2 Gambling Capital, the first year of a regulated egaming industry in New Jersey would generate a gross win of as much as US$410m, increasing to $590m four years later.
Several powerful established US land-based casinos, including Boyd Gaming and Caesars Entertainment, have an existing presence in New Jersey and will hope their brand recognition and marketing spend will see them grab a sizeable share of the potential online revenues.
Both companies saw a boost in share price following the conditional veto and are likely to see a repeat of that once the bill is signed into law.
Caesars, which owns four of Atlantic City’s dozen casinos and reported full-year losses of more than $300m yesterday, saw its stock rise from $8.49 to $13.91 when Christie issued his latest veto with the stock settling down to an improved $11.71.
Meanwhile Boyd, owner of a 50% stake in the significant Borgata Hotel Casino & Spa, saw its share price reach a six-month high of $7.77 following the news.
Moreover, the share prices of the operators’ potential technology partners for online poker in Nevada such as bwin.party Digital Entertainment and 888, both immediately leapt by more than 15% on 7 February based on the conclusion that the agreements would also be rolled out in New Jersey.