New Jersey could be the first state in America to issue an online gambling license two years after the Justice Department shut down Internet poker sites operating in the U.S. On Tuesday, the state’s Division of Gaming Enforcement announced that PokerStars has completed its application for a gaming license.
Mobile Apps
The state has 90 days to review the application. New Jersey is desperate for cash after seeing its unfunded pension liabilities increase to $47.2 billion in 2012, according to Bloomberg. Some industry analysts believe that legalization of online betting could lead to the development of mobile and social apps that allow users to gamble on their devices.
The popular online poker site is being represented by lobbyist John Kelly, Jr., president and owner of All-Circo Inc., who is advocating the legalization of Internet-based betting sites with state and national politicians. However, approval of any state gaming license will likely result in multiple lawsuits as federal statutes make it illegal to conduct electronic-based wagers and betting.
Credit: Commons/Wikimedia
Enforcement
Interestingly, the Justice Department under an Obama administration has sent several signals that it may not intervene with state passage of online gambling licenses, a move that prompted PokerStars and Full Tilt sending applications in multiple states. In 2012, PokerStars settled criminal charges brought by the Justice Department for $731 million. The site had been accused of money laundering, bank fraud and illegal gambling.
Approval by the state of New Jersey will likely have wide ranging effects for the Internet betting industry. Illinois, which is facing record deficits and state debt, is also considering legalizing gambling sites in the state. Illinois has several bricks-and-mortar casinos in the Chicago area.
Taxable Revenue
Illinois estimated that the legalization of online gambling will generate between $400 million and $1 billion in taxable revenue per year. Bettors and casino-goers cited convenience as the primary reason for wagering on the Internet, according to Casino.org. Last year, Illinois became the first state in the United States to sell lottery tickets online. That move prompted other states, including California, Florida, New York, and New Jersey, to explore ways of selling official state-run lotteries on the Internet.
Rational Group, the parent company of PokerStars, is planning to purchase controlling ownership of Atlantic Club, an Atlantic City casino. Thus, the site is being viewed as increasing its clout in state politics due to Atlantic City-area casinos employing thousands of workers. Industry analysts expect online gambling to be permissible in the state of New Jersey in late 2013.
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Lee
April 20, 2013 at 9:49 am
Hi marv
Looking at the possable tax revenues you show here I can see as soon as one state gets the go ahead every other state is going to approve online gambling as well how can they afford not to. Every state is in desperate need of financial help so even if people do not like the thought I think they have no choice but to allow this to go ahead.
Really interesting thanks lee
Marv Dumon
April 20, 2013 at 9:53 am
Thanks Lee. On the surface, politicians may rationalize the introduction of online gambling to increase revenues. But unfortunately, I think there’s good old corruption and campaign fund-raising involved. Gambling is a huge business and 2014 is going to be a hard-fought election year requiring tons of expensive media ad.
It’s unfortunate that government is so broke that it can no longer make policies based on what’s right but based on what brings money.
Julie
April 22, 2013 at 6:34 pm
Wow, this will be a huge win for the internet based companies. It seems the overhead would be so small compared to a brick and mortar building.