With New Jersey’s prominent gambling history, it’s hard to imagine that this state didn’t legalize online gambling until recently. To discuss the issue of legal online gambling in the U.S., one first must visit the history of the Federal Wire Act and why it exists in the first place.
Read below to find out how New Jersey was victorious in the case for legal online casinos and to see how you can get in on the action.
Licenses for N.J. casinos are submitted through Atlantic City casinos. The law grants the land-based casinos in New Jersey the right to apply for a permit to start a legal online gaming site through partnerships with iGaming providers or operators.
The three types of licenses available are as follows:
- Casino Service Industry Enterprise License – This license is for software providers for land-based companies, as well as companies that provide lists of gambling players.
- Vendor Registrants License – This license pertains to online gambling service providers
- Ancillary Casino Service Industry Enterprise License – This license deals with companies providing services such as payment processing, geolocation, age verification, and customer identity. It also includes junket operators and affiliates.
On February 26 in 2013, the New Jersey legislature passed the new bill legalizing online gambling. Senator Ray Lesniak had pushed the bill to stimulate the Atlantic City economy, which was seemingly failing. Chris Christie signed the bill into law, expecting to welcome financial benefits to the state. And boy was he right.
Atlantic City and Online Casinos
Atlantic City has been known as the “Las Vegas of the East” for nearly a hundred years. Yet, unlike Las Vegas casinos – which have been antagonistic toward legalizing online gambling – Atlantic City casinos saw the opportunity that awaited them by embracing the online market.
Now, an online presence can rescue land-based casinos. The best case-in-point is the Golden Nugget. Their physical casino has consistently lost money for seven years, but Golden Nugget’s online casino is the most financially successful operator in the U.S.
Since New Jersey state law requires that all online casinos partner with a land-based casino, some Atlantic City casinos have formed legal partnerships with well-known European operators, such as 888’s partnership with Caesars casino.
The path to legalization had to do with the challenge of overcoming what had been a relatively unimportant piece of legislature: the Interstate Wire Act of 1961.
Introducing the Wire Act
The Federal Wire Act – otherwise known as the Interstate Wire Act of 1961 – was put to restrict betting companies’ information from being transmitted across state lines via wire communications. This legislation was initially established to end organized crime through interstate gambling. However, when this law was created, online gambling did not yet exist.
In modern society, our everyday life requires the internet, which relies on interstate wire communications. Therefore, this law has some jurisdiction over online gambling.
In 2006, The U.S. Department of Justice (DOJ) went even further. It passed the Unlawful Gambling Enforcement Act (UIGEA), which restricted banks from processing transactions from online gambling operators outside of the U.S. This law effectively pushed out major online gambling companies through threats of money laundering and illegal gambling charges. Many of the best online poker sites for U.S. players were pushed out of the country because of this legislation – including PokerStars, a prominent name in the industry.
At the start of 2010, a bill was introduced by Senator Ray Lesniak, which would allow casinos in Atlantic City to operate online casinos in the state. Lesniak’s bill passed the Senate with widespread support. It passed with a 29 to 5 margin. However, when the bill ended up on Governor Chris Christie’s desk, it was vetoed and suspected of being turned down due to political motivation.
Later the DOJ released a re-modification of the Federal Wire Act, hence stating that interstate transmission of wire communication which had no relation to sports betting, would not pertain to this law. This new version of the Federal Wire Act, passed in 2011, excluded online poker from its limitations, making it possible for states to pass their legislation regarding the activity.
The following year, Chris Christie changed his stance on online gambling. Senator Lesniak introduced a new online gambling bill to cater to Christie’s concerns. In December of 2012, the bill passed the state Assembly, and it moved on to the Senate. The bill passed the Senate with a 33 to 3 margin. After a few amendments and revisions, the bill was finally signed into law on February 26, 2013.
The first online casino to gain a license in New Jersey was Caesars, which started by April 2013.
Legal Online Poker in NJ
When the Federal Wire Act was re-evaluated and excluded all forms of online gambling outside of sports betting, this excused online poker, allowing the activity to be legalized and regulated by state law.
Four states proceeded to pass legislation creating laws around regulated, legal online poker. Out of those four, three signed agreements to share online gambling pools. As a result, it is not strictly illegal to play poker online for money within the United States. However, it is crucial to abide by the individual state laws surrounding the matter.
Moving forward with legal online poker meant new legislation for those states.
Delaware passed the Delaware Gaming Competitiveness Act in 2012, allowing for the legalization of online casino games – including online poker. Nevada followed the lead with the authorization of online poker licenses in 2013, as they launched the first-ever legal, regulated online poker site in the U.S.
New Jersey then introduced online gambling, passing legislation to regulate online gambling activities. Atlantic City casinos could operate N.J. online casino sites and legal online poker sites.
A few years later, in 2017, Pennsylvania became the fourth state to legalize online poker in the U.S., beginning the process of legalization and regulatory matters for online poker sites.
As of 2019, there are over 20 casinos that now offer or have licenses for online gambling in New Jersey. The mammoth Parx casino, with its physical location in Pennsylvania, is the latest to join in on the action.
The Online Gambling Race
Now that online poker, legal online casino sites, and legal online sports betting are monitored and regulated in the Garden State, casinos and racetracks are racing to launch their websites and mobile casinos.
As the economy grows, so does the competition. And competition among legal online casinos is excellent news for you. Casinos are trying to attract new customers with special bonuses and deals for first-time deposits. Have a look to see what might be a good fit for you.
Additional states are joining in on the legalization of online casinos – with West Virginia and Michigan being the latest to legalize online gambling. Of course, we’re proud to say that New Jersey is leading the pack in terms of the numbers of legal online casinos, a variety of games, and best bonuses for new and existing customers.
It now depends upon individual states to decide whether online casinos will be legal within their boundaries. Seeing the success of New Jersey, it’s become increasingly difficult to step away from this table.