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Atlantic City

Michael Ein

LAS VEGAS — New Jersey’s casino regulators are undertaking another round of regulatory review, except this time the proposed rule changes are coming from the industry rather than the state, Division of Gaming Enforcement Director David Rebuck said Tuesday.

Rebuck spoke at the annual Global Gaming Expo during a session titled “A Phoenix Rising: The New New Jersey.” Sponsored by the Atlantic City-based Cooper Levenson law firm, the session touted the regulatory and other reforms the state has made to help the struggling casino industry.

“If New Jersey had not moved the way it had in the past two years, most people would say we would be in a real difficult time,” Rebuck said. “There’s a sense of optimism right now.”

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Rebuck said as part of his commitment to listen to the industry and institute reforms that made sense, he asked casino officials to put forward their own regulatory ideas.

“I’m tired of the state coming to you because of law changes,” he said he told industry officials. “You need to step up to the plate and bring ideas to us.”

Gaming enforcement officials will read through the proposals and decide which ones can be instituted and still preserve the integrity of the games, Rebuck said. Some casino officials have submitted pages of ideas, he said, adding he expects this round of regulatory revisions to be the last for another year or so because the review process is so labor intensive.

Changing the regulations may be risky but it’s necessary, Rebuck said.

“If you want regulation where there is no risk, it’s going to be so stifling on the industry,” he said. “You are going to stifle creativity to the point where they give up.”

When the state began its efforts to deregulate the industry, including eliminating casino inspectors who are on the floor seven days a week, paring the regulatory staff by hundreds, and giving the casino more leeway in staff sizing, some observers said that would be too risky, Rebuck said. That proved to be wrong, he said.

“We didn’t have this great meltdown,” Rebuck said.

Compared to other jurisdictions, New Jersey had too many regulators — 700 — prior to deregulation in 2011, said Joseph Corbo, vice president and general counsel at Borgata Hotel Casino & Spa. In contrast, Nevada had about 400 and Mississippi had fewer than 200, he said.

New Jersey’s regulations also were onerous, Corbo said, using as an example the process of getting a new slot machine on the floor, which required casinos to follow a sequence that wasn’t practical, he said.

The regulations worked when New Jersey was one of only a few states that offered gambling but placed it at a disadvantage when more states legalized gambling, Corbo said. The changes have allowed more trust to be built between the industry and regulators, he said, adding that casinos recognize they face stiffer penalties if they do something wrong.

“The trust is they’re with us as a mature industry,” Corbo said. “We can have adult conversations about things.”

New Jersey also has led the way in approving regulations that no other state has, such as the ability for casinos to offer interjurisdictional slot machines with a progressive jackpot, Rebuck said.

Those regulations were approved earlier this year, although in order to take effect, another jurisdiction also would have to approve similar regulations. At the moment, only tribal gaming jurisdictions offer similar slot machines. Rebuck said the regulations give casinos the opportunity should they decide to offer such machines.

Regulations for mobile gaming devices also are set to take effect this year, he said. Internet gambling, however, remains in question. The New Jersey Legislature has not voted on the measure, with some lawmakers saying that Gov. Chris Christie is opposed to Internet gambling.

Christie has said he has questions about Internet gambling, particularly when it comes to keeping underage gamblers from participating and preventing the proliferation of gambling halls across the state.

Rebuck said his agency will wait to take up any regulations until lawmakers and Christie agree on whether to move forward with Internet gambling. If they legalize Internet gambling in New Jersey, some of the regulations that have to do with mobile gaming also may be applicable and reused, Rebuck said.

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