TRENTON — Gamblers in New Jersey should be able to play poker and other betting games online, state senators said Monday after approving in-state online gaming.
A Senate committee on Monday also approved a resolution to ask voters next year whether to legalize sports betting in New Jersey should a federal ban be overturned.
Under the Internet gaming bill, New Jersey would be the first state to allow — and tax — an intrastate online gaming system, and in doing so, could test the federal government’s restrictions on online gambling.
Federal law bans wagering across state lines. However, this bill would allow a system for only state residents — and foreign gamblers — to place bets online. It was unclear whether the in-state restriction would conform with federal standards, but Senate backers say they believe it will.
The measure, sponsored by Sen. Raymond Lesniak, D-Union, was amended to allow residents of other countries, but not other U.S. states, to gamble via proposed online gaming portals on servers based in Atlantic City. The bill passed 29-5 and goes to the Assembly for committee consideration.
Players would be able to log on from anywhere in New Jersey to websites run by licensed casinos. Those casinos would apply for a one-year renewable license to run a portal. Most existing table games would be available at the gaming hubs.
But the games would not be available to all U.S. residents. Lawmakers said the technology exists to prevent out-of-state players from gaining access to New Jersey’s system.
In a significant concession, a tax exacted on gross revenue from Internet gaming would amount to 15 percent, rather than a previously proposed 20 percent.
That money has become critical to discussions of wider gaming policy, as it would be used to fund winners’ purses at horse-racing tracks. That provision prompted some northern New Jersey legislators to agree to support other bills being proposed separately to help revive Atlantic City’s casino and tourism industries.
The bill specifies that all computer servers, equipment and other support services and companies for the online gaming industry be located in Atlantic City.
“That’s a no-brainer, and the whole bill is a no-brainer,” Lesniak said following the vote.
“We need to be bold, to tell the federal government it has no constitutional authority to prevent online gaming here in our state,” he said.
Licenses for online gaming would cost operators $200,000 the first year and $100,000 to renew.
Meanwhile, the Department of Human Services would be charged with running compulsive gambling treatment and prevention programs, which would be funded by licensees at a cost of $100,000 per year.
Also Monday, a Senate committee released a measure that would ask voters whether the state should allow betting on sports events. The bill was approved 6-1 Monday by the Senate Economic Growth Committee, allowing it to receive future consideration by the full Senate.
If approved by voters, a constitutional amendment would authorize the Legislature to enact laws allowing betting at casinos in Atlantic City and at racetracks, including former racetracks, on sports or athletic events.
Lesniak, the measure’s sponsor, read statements into the record from racing and casino operators in Delaware, illustrating that allowing sports betting had boosted profits there.
Sports-betting supporters say New Jersey is losing out on hundreds of millions of dollars a year to organized crime and casinos in other states. The resolution calls for a referendum to be held in November 2011 in which voters would decide whether to allow gambling on professional sports games. But a federal ban on sports betting in all but four states would have to be overturned first.
Lesniak said revenue from sports betting could help New Jersey’s struggling racetracks stay alive. He read a text message a friend of his sent him recently from a Delaware racetrack where sports betting is legal.
“At Delaware Pk Sports Book on way to Eagles game,” the message read. “Oh boy NJ missing out! You gotta get it in NJ. Packed house 10am Sunday.”
Lesniak, who is an attorney, is suing the federal government to overturn a ban on sports betting on constitutional grounds, mainly that it fails to treat all states equally. New Jersey was offered a chance to allow sports betting in 1991 but failed to do so.
A 1992 law restricts sports betting to the four states that met a deadline to sign up for it: Nevada, where Las Vegas sports books determine the odds for sporting events across the country, Delaware, Montana and Oregon.
“It’s something whose time has come,” Lesniak said. “Sports betting is going on every day in every neighborhood. Atlantic City is losing out, New Jersey is losing out.”
The Associated Press contributed to this report.
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