Online Poker on the Line in New Jersey

Hopes that pro-online poker legislation like Rep. Barney Frank’s now famous (and infamous) HR 2267 will get passed any time in the near future have been waning in light of the incoming “lame duck” Congress, but a new hope has blossomed somewhere unexpected – New Jersey. Everyone knows that the beleaguered state has been scrambling to compensate for Atlantic City’s lagging profits, and it looks like online poker could be the answer.

On Monday, New Jersey State Senator Raymond Lesniak presented an online gambling licensing bill to the Senate Budget Committee. The bill, S 490, is only radical in that it would make New Jersey the first state to legally condone online gambling, but for both proponents and opponents of online gambling, that alone is enough.

Bill S 490 includes a lengthy outline of how online gaming (including poker) would be licensed, regulated and taxed. The bill would only cover those activities already present and allowed in brick and mortar gambling establishments. It would also only extend to online players and operators located inside the state. In return for playing host to such operations, New Jersey would receive a licensing fee and a tax payment equal to 20% of gross revenues for every operator.

For the most part, online operators would be subject to the same regulations and licensing procedures already imposed on the state’s many live casinos and sportsbooks. The only exception, of course, is that online operators would also have to submit their software to the Division of Gaming Enforcement for approval and would have to agree to real-time auditing and monitoring by the necessary state departments.

Industry experts calculate that New Jersey’s tax on these expanded gaming operations could earn the state hundreds of millions in gross revenue. Lesniak has also extended an olive branch to other parts of the gambling industry by already earmarking $30 million in those funds to supplement New Jersey’s lagging live horse racing industry.

The Senate Budget Committee has already approved the proposed bill with a nearly unanimous 10-1 vote. IMEGA has been championing the bill for months, and CEO Joe Brennan has predicted that the new legislation could be passed and put into action as early as Q1 2011.

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