Drama surrounds veto of New Jersey online gambling bill

3 March 2011
Gov. Chris Christie has vetoed legislation that would have made New Jersey the first American state to license and regulate online gambling. The absolute veto came hours after it appeared only a conditional veto would happen.

The legislation, which would have given Atlantic City casinos the ability to offer online gambling to New Jersey residents, passed the State Assembly by a 63-11-3 vote and the State Senate by a 35-2 vote in January.

In a message to the Legislature explaining his veto, Christie said the online gambling bill violated the New Jersey Constitution.

"The State Constitution explicitly requires casino gambling to be restricted to the territorial limits of Atlantic City," Christie wrote. "Senate Bill No. 490 seeks to avoid this requirement by deeming all Internet wagers as being placed in Atlantic City, even if the person placing the bet is outside the boundaries of the city. In my view, the creation of a legal fiction deeming all wagers to have 'originated' in Atlantic City cannot overcome the clear and unambiguous language of the State Constitution."

"Moreover, certain provisions set forth in this legislation are not consistent with my administration's policy objectives, such as the continuation of public subsidies of horse racing," Christie added.

Christie said he was also worried about the development of Internet gambling cafes in New Jersey. "Nothing contained in the legislation would prohibit commercial establishments outside of Atlantic City such as nightclubs, bars, restaurants, cafes and amusement parks from offering Internet gambling opportunities in order to attract patrons or customers," Christie said.

At the end of his veto message, Christie suggested it would take a public referendum to change his mind about online gambling.

"The expansion of gambling has been slow and cautious," Christie wrote. "The public has expressed concerns regarding the potential ills associated with gambling and has demanded that gambling be closely scrutinized and regulated to ensure that it is administered in a fair and legitimate manner. This public sentiment has resulted in an established line of court rulings that have consistently required direct voter approval for each new form of gambling introduced in this state."

Sen. Raymond Lesniak, who sponsored the online gaming legislation, said he would work to bring new online gaming legislation to the governor's desk.

"We need to work as quickly as possible to bring this bill back to the governor's desk, and position Atlantic City to become the Silicon Valley of the high-tech gaming sector," Lesniak said in a statement. "New Jersey can still become the first state in the nation to offer legalized Internet wagering, and by leading the way, we position the Garden State to reap the benefits of getting in on the ground floor of a multi-million dollar market."

Sen. Jim Whelan also said he was ready to work on getting another online gaming bill to the governor's desk this year.

"We want to be the first. We want to get there first," Whelan told Casino City.

"I would have preferred (Christie) signed the bill, or secondly a conditional veto. But he has left the door open for a bill in the future."

"We can address the cyber caf? issue," Whelan added. "The horse racing issue -- that was frankly part of getting the votes in the state Legislature. In a perfect world, I'd rather not have that either. But we had to take care of the horse racing industry. We just need to make it clearer that this is temporary help for the industry."

"I've spoken with Senator Lesniak, and we're going to put together a bill that addresses these concerns," Whelan said.

Earlier this morning, it looked like Christie was going to issue just a conditional veto, which would have allowed the Legislature to send the bill back to the governor with amendments in place through a simple majority vote.

"At the beginning of the day, Senator Lesniak thought he had an understanding on what changes (the governor) wanted to see if there was a conditional veto," said Joe Brennan, chairman of the Interactive Media & Gaming Association, which worked with Lesniak on the bill."

"It's a full veto now," Brennan said. "The governor wants it to go to a public referendum. We know it would pass based on a referendum. We used the governor's own pollster and found that 63 percent would vote for (online gaming)."

"I was surprised when the governor changed his mind in the last half of the day," Brennan added. "But my surprise is incidental."

"New Jersey had taken the lead in establishing itself as the center for Internet gambling and the jobs it could have created and the investment would have drawn could have helped the state," Brennan added. "Now it looks like New Jersey will miss out on the first mover advantage that it was in position to grab."

"Certain Nevada-based casinos and offshore operators opposed the bill," Brennan said. "Maybe it was their lobbying (that killed it). Who knows? Regardless of what the governor did today, people are going to bet on the Internet. They're just not going to do it on a site licensed by the state of New Jersey. I'm not saying I encourage it, but that's the reality."

Vin Narayanan

Articles by Vin Narayanan is the former managing editor at Casino City and has been involved in the gaming industry for over a decade Vin is currently based in Hong Kong, where he runs his own consultant group and works as head of gaming and public relations for Mega Digital Entertainment Group.

Before joining Casino City, Vin covered (not all at the same time) sports, politics and elections, wars, technology, celebrities and the Census for USATODAY.com, USA WEEKEND and CNN.