One of the main items up for consideration in the opening 2023 session of the New Jersey legislature is a proposed 10-year extension of the state's online gaming law.
New Jersey first launched online casino games in November 2013 and over the course of the last nine years, state casinos have taken in $4.9 billion in revenue from online gaming activity.
In recent years, tax revenue from online casino gaming has averaged $200 million annually while correspondingly serving as an important source of revenue for the state's three racetracks and nine remaining Atlantic City casinos.
Tax revenue from iGaming activity in New Jersey actually dwarfs that collected from mobile legal sports betting. However, the latter activity garners by far the greatest amount of public attention with respect to the gaming industry as a whole.
For the first 11 months of 2022, New Jersey sports betting collected $82.7 million in tax revenue from online sports betting sites, which accounts for over 90% of the total sports wagering handle in the state.
The state's nine Atlantic City casinos currently collect approximately 33% of gross gaming revenue (GGR) from iGaming play and helped those retail outlets survive during the 2020-21 pandemic years that sharply reduced in-person casino gaming.
"There's really no scenario where internet gaming can ever go away," said Republican state Senator Vincent Polistina. "Without having internet gaming, sports betting, these other amenities, Atlantic City would certainly suffer."
In September, both the New Jersey Senate and State Assembly held committee hearings on the 10-year extension of the online gaming law. They advanced the bill to the next step in the legislative process by unanimous votes.
Now, following the opening of the 2023 New Jersey legislative session on January 10, the extension of the iGaming law will undergo several additional rounds of minor tweaks and possible amendments before gaining final passage from state lawmakers. Once approved, the bill will be sent to Gov. Phil Murphy for his signature.
Passage of extension to iGaming law likely to be swift
Under the existing law, sportsbooks offering iGaming are required to operate in partnership with brick-and-mortar casinos in Atlantic City. The extension of the mobile wagering law must be passed prior to November of this year to ensure that casinos can continue to offer iGaming gambling can continue uninterrupted in New Jersey through 2033.
It is highly likely that New Jersey will pass a new 10-year extension to the iGaming law sooner rather than later, given that this is an election year in the Garden State, with all 120 seats in the state legislature up for grabs in November.
According to Bill Pascrell III, a lobbyist and strategic advisor to the gaming industry with the Princeton Public Affairs Group, the political calendar will bring added urgency to the swift passage of the extension before the summer hits.
"There are lots of distractions this year," said Pascrell, who observed that state lawmakers can be expected to spend the months of September and October campaigning for re-election while the legislature often sits in recess during July and August. It follows that state lawmakers will be under pressure to pass all critical bills, including the iGaming law.
iGaming revenue set to break all-time record for 2022
In November, iGaming revenue rose by 23.9% year-over-year to $146.2 million as compared to $118 million in the same month in 2021, barely less than the all-time monthly revenue record of $147.2 million set in October.
For the first 11 months of 2022, iGaming revenue reached $1.51 billion, a 22.5% YoY gain over the $1.23 billion generated for the same period in 2021. When final figures of the year are released, and December results are posted in the coming days, New Jersey is expected to set new records in both iGaming and online sports betting.
This means that few legislators are likely to oppose the renewal of a law that has not only preserved thousands of jobs at Atlantic City casinos and generated important tax revenues that continue to grow.
During the September committee hearings, one legislator wondered why the new law should not be made permanent, obviating the need for future 10-year renewals.
Lone voice of dissent
The only visible sign of opposition to blanket approval of the extension has come from Felicia Grondin, Executive Director of the Council on Compulsive Gambling of New Jersey.
"People are in need of help," said Grondin at a meeting of the Senate State Government, Wagering, Tourism and Historic Preservation Committee in early November. "It’s usually detected when it’s too late when people have lost their kid’s college fund (and) when they’ve lost their homes."
Grondin has complained about a lack of adequate staffing and funding for the treatment of problem gaming in the face of the exponential growth of online casinos and sports betting in New Jersey.
"We are competing with advertising that is so excessive and so aggressive, it's very difficult to compete with," said Grondin.