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Mark Balestra

New Jersey Opens the Forbidden Door

16 May 2000

Those who made the trek to Montreal for the Global Interactive Gaming Summit last week experienced first-hand a refreshingly friendly and productive coexistence between real and virtual gaming industry representatives. Professionals in the Net betting industry have recognized the inevitable convergence for years, but their bricks-and-mortar counterparts (at least those in the U.S. and Canada) have been slow to accept the inescapable truth.

However, presentations by several traditional gaming reps--including Brian Sandoval (Nevada Gaming Commission), Tony Fontaine (Station Casinos), Frank Farenkopf (American Gaming Association) and former New Jersey Division of Gaming Enforcement Director Frank Catania--indicate, as gaming attorney Tony Cabot suggests, that "the times, they are a-changing."

It was only a matter of time, but the question of "if" has shifted to "when" in the U.S., and competition could make "when" come even sooner than expected. For years, Nevada has had a stronghold on the American gaming market, and for years, New Jersey has searched for a way to grab a bigger piece of the pie. Could Internet gaming be the answer?

The New Jersey Assembly Commerce, Tourism, Gaming and Military and Veterans' Affairs Committee will examine that question at a public hearing later this month. The session comes on the heels of New Jersey Assemblyman Joseph Azzolina's proposition in early April for Congress to weigh the pros and cons of legislation that would enable Atlantic City casinos to offer their games over the Internet. It also follows a similar meeting held by the Nevada Gaming Commission in mid April.

New Jersey's exploration will take place May 31. Following, an introductory report on the Net betting industry and a demonstration of Internet gambling, the committee will hear testimony on:

  • the legal issues and pending federal legislation affecting Internet gambling;
  • the various international approaches to regulating Internet gambling;
  • the potential problems with Internet gambling (compulsive gambling, underage gambling and money laundering); and
  • the capacity of present and anticipated technology to implement effective regulation and mitigate the potential problems with Internet gambling.

The committee will also discuss the advantages and disadvantages of authorizing Atlantic City casinos to establish and operate Internet gambling sites.

The line-up for the New Jersey hearing, posted below, looks good for the online gaming industry in terms of getting Net betting its fair shake. If you plan to attend the open hearing, look for the final session--a panel discussion--to provide some heavy-hitting debate. The session will feature New Jersey Division of Gaming Enforcement Director J.P. Suarez, an adamant opponent to Net betting along with Cabot and Interactive Gaming Council Chairman Sue Schneider, both strong advocates of regulation.

So, Nevada and New Jersey have each taken a peek inside the forbidden door, but will one of them be bold enough to propose regulated Internet wagering or will each sit back and wait for the other to make a move?

If one takes the big step, the other would likely follow, and a sprint for first dibs on the massive Internet market could ensue. Meanwhile legislators in a few of the other 48 states might have difficulty explaining to voters why their states are turning away millions upon millions of potential tax dollars. And guess what...

Yes, another illustration of the Domino Theory could be in the works.

Agenda - May 31, 2000
10:00 - 10:15 a.m. Introduction to Internet and E-Commerce, Anthony Cabot Esq. (Lionel, Sawyer and Collins)
10:15 - 10:45 Economic Perspective of the Internet Gambling Industry, Mark Falcone (Vice President, Gaming-Lodging & Leisure Group at Bear Stearns) and/or Eric Hausler (Equity Research Analyst/Bear Stears)
10:45 - 11:15 Demonstration of Internet Gambling; Technology's Capacity to Regulate, Fernando DiCarlo (Gametronics)
11:15 - 11:45 Current Trends in Regulation of Internet Gambling, Sue Schneider (President/River City Group and Chair/Interactive Gaming Council)
11:45 - 12:45 p.m. Lunch Break
12:45 - 1:45 Legal Issues and Pending Federal Legislation, Anthony Cabot, Nick Casiello, Jr. (Sterns and Weinroth) (30 minutes)

J.P. Suarez (N.J. Division of Gaming Enforcement) (30 minutes)

1:45 - 2:00 Compulsive Gambling Issues, Ed Looney(NJ Council on Compulsive Gambling
2:00 - 3:30 A Summary of the Pros and Cons of Internet Gambling - Panel Discussion (Suarez, Looney, Schneider, Cabot)
Questions and Answers

Note: Time adjustments or other technical changes may be made.

Mark Balestra
Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.
Mark Balestra
Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.