Atlantic City casinos reject proposed online gambling legislation in New Jersey
16 June 2010
On June 3, legislation that would give Atlantic City casinos the ability to offer Internet gambling services within the state of New Jersey cleared a big hurdle when S490 was reported from the Senate State Government, Wagering, Tourism & Historic Preservation Committee by a 3-1 vote with relatively few amendments.
One week later, that same legislation faces a new hurdle. The casinos that would benefit the most from the legislation have said through their trade organization — the Casino Association of New Jersey (CANJ) — that they don't want it to be passed.
CANJ, which represents all 11 Atlantic City casinos, sent a letter to Assemblyman John Burzichelli, the chairman of the Regulatory Oversight and Gaming Committee in the Assembly, urging his committee to vote no on online gambling legislation or "at least not hold any vote on it, until further guidance can be given from the Attorney General or other law enforcement."
Joseph Corbo, the president of CANJ and the vice president and general counsel at the Borgata, asserts in the letter that the industry is interested in working with federal and state governments on finding a "viable business model to deal with some forms of Internet gambling," but "it is very clear that the federal government must take the lead on this issue."
In 2006, the Congress passed, and then-President George W. Bush signed, the Unlawful Gambling Enforcement Act (UIGEA), under which states are allowed to offer Internet gambling services provided they can prove minors and people from outside state borders can be prevented from gambling online.
Casino City contacted Corbo to ask if the UIGEA represented enough federal guidance on the issue, but Corbo responded in an e-mail that he had no further comment, outside of the letter to Burzichelli.
Corbo's letter went on to say that expanding gambling services to the Internet would harm Atlantic City by undermining the city's status as a destination resort.
Frank Catania, the president of Catania Consulting Group of New Jersey and the former director of the New Jersey Division of Gaming Enforcement, disagreed.
"This bill would give the casinos the ability to market to people playing poker, slots, or other games on the Internet in New Jersey and bring them to Atlantic City," said Catania. "The demographics of people who are playing on the Internet are different from the demographics of the people who are actually coming to the casinos now. The ones on the Internet are the younger crowd, and if the casinos could use this to bring the younger crowd in, in my opinion, it's going to increase their business."
In his letter, Corbo also tries to raise doubts about the Interactive Media Entertainment & Gaming Association (iMEGA), which has been actively lobbying the New Jersey legislature to regulate online gambling.
"Who is iMEGA?" Corbo asks. "By its own admission, it refuses to disclose it (sic) members, but the Executive Director has stated that 'there are pure poker operators that are iMEGA members, as well as members that are sports, casino, etc.' Why don't they disclose these members?"
"One of our prerogatives is the confidentiality of our membership," iMEGA Chairman Joe Brennan, Jr., told the Press of Atlantic City. "We have been through the federal courts and asserted our right to keeping that confidentiality."
One member of iMEGA actually has come forward. After Kentucky seized the domains of 141 Internet gambling sites, the state's court of appeals refused to hear iMEGA's appeal unless it could show that it represented at least one affected party. TruePoker.com identified itself, and iMEGA's appeal in Kentucky is now moving forward.
While the letter's intent is to derail the legislation, Catania doesn't believe that it will. He cited other examples of gaming legislation that CANJ has opposed that have moved forward, and also noted that New Jersey's current legislative session ends at the end of 2011. Unlike many states, New Jersey's legislators meet all year, so there is plenty of time to get the bill passed in the Senate and through the Assembly as well.