New Jersey Lawmakers Eager to Boost Revenues Across the State
Horse racing is big business in the state of New Jersey. Now that online gambling has gained momentum along the East Coast, lawmakers are eager to strike while the iron is hot. Internet gambling is enjoying a purple patch in New Jersey, where it already exceeded $204 million for the year to date by October 31, 2017. If current trends continue, New Jersey could end on $244 million + for 2017 in GGR (Gross Gambling Revenue) from online activities.
The New Jersey state legislature has been abuzz with activity promoting all sorts of online gambling regulations in recent months. Senator Raymond Lesniak recently introduced Senate Bill 3536 which is geared towards expanding online gambling activity in the Garden State to include foreign-based operators in the United Kingdom. SB 3536 includes an important amendment in terms of gambling servers.
Presently, NJ regulations insist that servers must be in Atlantic City. If Lesniak’s bill passes the vote, New Jersey will get a piece of the lucrative UK market with shared players and shared gambling jackpots.
The increasing liberalization of online gambling activity across the US has fueled new initiatives in the New Jersey state legislature. For example, Democratic assemblyman, Ralph Caputo would like to see horseracing tracks in New Jersey offering online casino gaming.
The impact of such a decision could result in significantly enhanced gaming revenues and more cash for state coffers. The horse racing industry in New Jersey is under pressure, and the provision of online casino gambling may help to boost profitability. Caputo was formerly in the casino industry and believes that the provision of online casino games would drive traffic to the NJ racetracks.
NJ Racetracks and Casinos Could Both Benefit
Current legislation in New Jersey permits online gambling anywhere in the state. However, agreements between New Jersey casinos and racetracks will be mutually beneficial. Both the casino industry and the horse racing industry can benefit from a compact between the two groups.
The CEO of Monmouth Park racetrack, Dennis Drazen believes that casinos and racetracks will enjoy a win-win situation from an agreement. The way it is supposed to work is as follows: Punters will have time between horse races to place bets on online casino games.
This would increase revenue streams for the horse racing industry, and the casinos offering these betting options. The business model has not been finalized, but there are suggestions of compensation schemes between the casinos and the racetracks in New Jersey. It may be commission-based, or a fixed fee paid by land-based casinos to the racetracks for hosting online casino games.
US Supreme Court Hears NJ Online Sports Betting Case
Monmouth Park is particularly notable as a big money spinner for the state of New Jersey. If legislative changes are made, this betting enclave may become a Vegas-style sportsbook and racetrack. Monmouth Park boasts several dozen TVs, an oval bar, and a seating capacity of approximately 250.
Dubbed the Home of Betting this sports bar offers limited betting opportunities to patrons. Given that tremendous expansion is coming to New Jersey, upgrades and enhancements will have to be made to betting tracks around the state. On Monday, 4 December 2017, the US Supreme Court heard both sides of the story vis-à-vis bringing online sports betting to the state of New Jersey.
No decision has been reached yet, that will take another 6 months according to industry aficionados. However, big money is not sitting idle. Many of the leading industry players are already making plans to invest heavily in the possibility of legalized online sports betting.
If New Jersey wins a landmark decision, it could provide billions of dollars in revenues to states across the country. Atlantic City enjoyed a purple patch in the 1980s – during its heyday. Major international sports events such as Wrestlemania and Boxing matches were lining up to be hosted in Atlantic City.
That dovetailed with the construction of the $1.2 billion Trump Taj Mahal – the biggest casino in Atlantic City at the time. Unfortunately, it also signaled the end of a prosperous era for New Jersey’s equivalent of Las Vegas. By 1991, the Trump Taj Mahal filed Chapter 11 bankruptcy, and by the end of the 1990s, casinos began struggling. By 2006, New Jersey’s gambling revenue peaked at over $5.2 billion, before dwindling to around $2 billion by 2016.
How Are Casinos Faring in the State of New Jersey?
Based on the performance of individual casinos, Atlantic City is now on the mend. Money is being pumped into restoration initiatives, and a rebound is on the cards. Thanks in part to the success of online gambling – online casino and online poker (now accounting for 10% of all GGR), New Jersey is poised for success.
Across state lines, New York racetracks and Pennsylvania racetracks already offer video poker games and slot machine games. However, New Jersey racetracks do not offer such betting options, to their disadvantage. Eilers & Krejcik Gaming , a research enterprise estimates that the provision of online casino games and the full development of the New Jersey sports betting industry could yield $502 million in gambling revenues for the state.
If New Jersey’s sports betting market is fully legalized, it is possible – according to Oxford Economics – that some $8 billion could be placed in annual bets. For these reasons, industry analysts are pushing for fully legalized online casino betting at New Jersey racetracks.
Such is the interest in New Jersey’s gambling market, that key players such as MGM Resorts International is currently scouting out possibilities to build sports books in the state of New Jersey. No figures have been provided yet, but experts expect millions of dollars in investments to come flooding back to New Jersey.
Massive Expansion of NJ Racetracks to Include Casino Games
The current capacity of Monmouth Park is just 250 patrons, but expansion to accommodate upwards of 2,500 seating capacity is being considered. Various CEOs of leading betting enterprises have been quoted as saying you can never have enough television sets in sports betting arenas.
As it stands, 2018 is set to revolutionize the sports betting arena of NJ, with massive capital inflows. But before any of this gets going, the Professional and Amateur Sports Protection Act of 1992 will have to be overturned. New Jersey is one of over a dozen states that passed legislation this year to introduce sports betting. Others include Pennsylvania, New York, Connecticut, and Mississippi. Major Las Vegas casinos are eyeing all the states for expansion initiatives.
No matter what happens, New Jersey is leading from the front by pushing for regulated online casino gaming and sports betting. One of its staunchest proponents is soon to be retiring Sen. Raymond Lesniak who initiated proceedings back in 2011.
While the moves were sanctioned by then Gov. Chris Christie and the New Jersey DGE, it was the sports organizations that filed suit against the New Jersey governor, effectively stopping sports betting in its tracks. Sen. Raymond Lesniak is hoping for an enduring legacy after he retires, now that the matter is before the US Supreme Court and will likely be decided upon by June 2018.