New Jersey: Ready or Not, Here it Comes

New Jersey state Assemblyman Tony Impreveduto has drafted a bill that, if passed, would enable land-based casinos possessing Atlantic City gaming licenses to offer real-money casino games over the Internet.

Impreveduto's bill, A-3150, was pre-filed yesterday for introduction in the General Assembly next week with relatively little fanfare. Assemblyman Neil Cohen, the deputy minority leader, is cosponsoring the legislation, which is likely headed for the Commerce, Tourism, Gaming and Military and Veterans Affairs Committee.

Impreveduto referred to 3150 as "groundbreaking," and called it "a protective move."

The bill would enable current Atlantic City casino operators to offer any of their terrestrial games to the Internet. It would not, however, legalize sports betting, race betting or any other type of gambling.

The Gaming Commission would determine the licensing fee, although the legislation calls for a minimum fee of $200,000 with a renewal fee of at least $100,000. The application fee would be $100,000. An additional $100,000 per year would be deposited into the General Fund for appropriation by the Legislature to the Department of Health and Senior Services--$85,000 of which would go to the Council on Compulsive Gambling of New Jersey while $15,000 would be used for compulsive gambling treatment programs in the state.

As it stands now, the legislation does not prohibit the offering of Internet wagers to persons outside New Jersey.

Penalties for violating the terms spelled out by the bill include a fine of up to $100,000 for operating an online casino without a permit and a fine of up to $200,000 for tampering with software to affect payouts. Most significant, violating online gaming regulations could lead to the revoking of an operator's online casino license as well as its license to operate land-based gaming facilities.

If the law is passed, land-based operators would have to go through the Casino Control Commission, which would handle the application process. None of the Atlantic City operators has revealed plans yet for going forth with such a venture.

Phil Levine, a spokesperson for Harrah's Entertainment Inc., says Harrah's will watch the situation very carefully, but emphasized that, at that moment, "we wouldn't want to jeopardize the standing of any casino in markets where we operate."

The company, which operates 21 casinos in 17 markets, has invested close to $10 million in its Web campaign. In October, the company officially launched a play-for-fun casino that's available to members of its Total Rewards player's club. The virtual casino's software was developed by Chartwell Technology, which develops similar systems for sites offering real-money wagering.

Joseph Azzolina, who chairs the Commerce, Tourism, Gaming and Military and Veterans Affairs Committee, says it's unlikely that the bill will be read anytime soon. Last June, Azzolina spearheaded a daylong hearing in which the legislature examined the ins-and-outs of Internet gambling. (See "More on the New Jersey Hearing.")

He revealed shortly before the hearing that he was entertaining the idea of introducing a regulatory bill, citing that regulated Internet gambling is better than allowing New Jersey residents to have access only to unregulated sites, which they now have. "If we allow it in New Jersey, at least we'll be honest," he told the Asbury Park Press in April.

Azzolina says there's still a chance that he'll introduce a measure of his own. "We may take a year or more," he said in a phone interview. "We might draft something different."

He also said that he'll take a wait-and-see approach, acknowledging that the current political climate in New Jersey is still cold to the idea. He added that such an effort would be pointless if a federal ban is passed. (Both Sen. Jon Kyl and Rep. Bob Goodlatte indicated this week that they plan to re-introduce federal bills that would prohibit Internet gambling. A spokesperson for Rep. Goodlatte's office says they're aware of the New Jersey bill, but have not had a chance to view it yet.)

Observers question whether New Jersey is ready for such an act. "It could take a month or it could take five years," Impreveduto acknowledged.

Before introducing his bill, Impreveduto spoke with officials at the New Jersey Division of Gaming Enforcement, who indicated they weren't pleased with his efforts. (Katherine Lyons, the Division's public information officer, said that they had not seen Impreveduto's bill yet, and were unwilling to make any comments on it before reading through it.) J.P. Suarez, the director of the Division, has spoken out against Internet gambling on several occasions. IGN was unable to reach Suarez for comment.

If the recent struggle to legalize account wagering legislation in New Jersey is an indication of how 3150 will be received, Impreveduto will face a steep uphill battle. Last year, the state's legislature passed an account wagering bill that would have legalized wagering over the Internet and via telephone on horse races held in the state, only to have the bill vetoed by Governor Christi Whitman.

Earlier this month, the New Jersey Horse Racing Commission, acting on the advice of Attorney General John J. Farmer, Jr., sent cease and desist letters to operators of online race wagering services that accept wagers from New Jersey bettors on races held both within and outside the state's borders.

Neither Whitman nor Farmer could be reached for comment on the Impreveduto bill.

Is Impreveduto's bold step a sign of things to come?

As developments unfold in New Jersey, all eyes could soon turn to Nevada, where Assemblywoman Merle Berman is expected to introduce a similar bill.

Both states have a lot at stake, with millions of dollars in revenue being lost to offshore Internet gambling operations.

As far as former New Jersey Division of Gaming Enforcement Director Frank Catania is concerned, regulation is unquestionably the way to go. "It's the right thing to do," Catania told IGN in an interview last April.

He also indicated New Jersey lawmakers would look upon such a policy in a much more positive light than most of their counterparts throughout the U.S. "New Jersey is a very progressive state," he said. "I think the legislators will listen."

Click here to view a copy of A-3150.