David Rebuck, director of the New Jersey Division of Gaming Enforcement, serves as the chief government regulator of Atlantic City’s $3.3 billion casino industry. He has been overseeing an unprecedented overhaul of the state’s gaming regulations.
Q: Feb. 1 marked the first anniversary of historic casino reform legislation signed by Gov. Chris Christie to make Atlantic City’s slumping gaming industry more competitive. What are the most important accomplishments so far?
A: Well, there are a lot of specific accomplishments that have occurred in the last year. But I think the number one accomplishment is that it set a tone for Atlantic City and that we were able to come in, make the adjustments and do so in a very short period of time — one year. So that the promises of the legislation are now realized.
I think the casinos themselves, the residents of Atlantic City and the other leadership interests in Atlantic City have all seen significant changes in regards to how the casinos are regulated by the DGE. And also, we have been able to work very closely and cooperatively with the Casino Control Commission, where the naysayers might have thought that the two state agencies would not be able to work together in developing this new model.
Q: For years, the casinos complained that New Jersey’s gaming regulations were outdated, too onerous and too expensive. How will the reforms improve the regulatory climate and save the gaming industry money?
A: Well, there are two areas where the gaming industry is going to save money. And everybody focuses on the one, which is the money that is paid by the gaming industry for regulation. That is a direct cost. Last year, it was $65 million approximately and this year it is $55 million approximately. So the focus of this net savings of $10 million is a direct savings to the industry.
But what I stress to individuals and what I stress to the public as well and to the industry is that this is just the tip of the savings that are going to be realized by the casino industry. There are significant operational savings, which I can’t really measure. But I would think that any industry representative would tell you that the regulation changes that have been made have allowed them to make significant operational adjustments to deal with business needs (and) to be able to compete with other jurisdictions.
Those monies that they are able to realize as savings in their operations for their bottom line are significant, and it’s allowed them as companies to compete in a lot stronger way than they would have been able to had they not been in place.
Q: Critics say New Jersey’s casino deregulation unraveled a system that had served as a worldwide model. What would you say to those critics, especially those who feared that deregulation would compromise the integrity of the games?
A: First, it didn’t compromise the integrity of the games, and second, I still think we have the gold standard. In comparing our operations here to other jurisdictions, there is nothing I want to copy from them. I still see those jurisdictions coming to us, asking us how they can do things better by looking at our model. I’ve had ... representatives from the industry reaching out to us here to work with them on a national basis to help establish benchmarks for best practices for model laws and for uniformity in regulations by other states.
I’m more than happy to be the leader in this for the state of New Jersey on behalf of the governor and the attorney general. I think it is a good thing for the state to still be seen as the leader not only by the industry, but certainly by other jurisdictions.
Q: A legal opinion issued in December by the U.S. Department of Justice appeared to set the stage for the legalization of Internet gambling if states want to approve it. As a lawyer and a casino regulator, what is your interpretation of that opinion?
A: It’s very clear when you read through the opinion in regards to their past actions, the Justice Department essentially said to the states that intrastate Internet wagering does not violate the (federal) Wire Act. In New Jersey’s case, and most other states that have legalized gaming, it has allowed them now to start the legislative process to determine how or if they want to have intrastate Internet wagering. It’s a huge change. Nevada is a little ahead of all the other states because they actually developed regulations.
As it relates to New Jersey, it has been very clear that the governor, Sen. (Raymond) Lesniak and the leadership in the Legislature have discussed how New Jersey can institute Internet wagering. The governor is on record as saying that he just wants to do it right.
As you well know, a year ago he vetoed a bill that was promulgated by the Legislature to allow for it. But I think in hindsight, it’s now viewed by most that it was probably the right thing to do, even with the Justice Department opinion, because it was overly expansive and would not have met the Justice Department’s standard. So we’ve got to do it right. The attorney general, the Legislature, our office and the Governor’s Office, we are all working together trying to come up with a standard model.
Q: How long do you think this process will take?
A: I don’t see it taking a long time. I think there are a number of significant legal issues that have to be agreed upon by the executive and legislative branches of government and once those issues are ironed out and agreed to — doing it the right way, as the governor said. I think we have a good chance to move forward quickly.
Q: It appears you feel Internet gambling is inevitable in New Jersey. What might need to be done to satisfy the governor’s concerns that it would be unconstitutional by spreading casino gaming outside of Atlantic City?
A: The biggest question that probably has to be addressed right now is the question of the constitutional referendum, whether one is needed or not. There are legal arguments that a referendum is not needed because the Internet wagering would be hosted only in the Atlantic City casinos.
Essentially, all of the transactions would occur here. The individual would establish an account here, in person, and then be able to play off of that. So you know the person is of age and you know that they are not excluded and that they are legitimate to gamble.
Access to that account in the casino would be from within New Jersey and you could make sure through technology you are not really having the signal come in through, let’s say, Pennsylvania, New York, Maryland or some other state.
So from a technological standpoint you can control that. But the real question is, do we need to bring this before the population in New Jersey as a referendum or not because there are legal issues both ways?
Q: In November, New Jersey voters approved a ballot referendum authorizing the Legislature to legalize sports betting in the state. However, there is a federal ban on sports betting in all but four states — Nevada, Delaware, Oregon and Montana — which had a form of sports betting on the books before the ban was enacted in 1992. What needs to happen to make sports betting truly legal in New Jersey?
A: The governor signed the bill and the Legislature passed it in the lame-duck session. We have drafted regulations to allow for sports wagering. Those sports wagering regulations are being reviewed now. The next step would be, they would be submitted to the Office of Administrative Law for publication.
At some point in time, there would be litigation. Clearly, the federal law, the Professional and Amateur Sports Protection Act, PASPA, prohibits New Jersey from engaging in sports wagering. So the question is, will New Jersey seek, as a plaintiff, to have PASPA overturned or will the federal government or one of the sports leagues intervene with what we are doing here, to stop us with an injunctive action from moving forward?
We are moving forward. We haven’t been stopped yet. I do fully expect there will be litigation at some point in time. It’s a big issue for the country. It’s a big issue for New Jersey as to our rights as a state. I think we have some very strong legal arguments, and I will acknowledge that the other side has some strong legal arguments, too.
Q: What can Congress do?
A: There are bills that have been introduced by Congressman (Frank) LoBiondo (R-2nd) as well as Congressman (William) Pascrell (D-8th) to make amendments to PASPA to allow sports wagering to occur in New Jersey. If Congress obviously moves on that and the president agrees, then that would forgo the need for litigation. I personally don’t think we can wait for that to happen because we don’t really control that decision. That’s a great uncertainty.
Q: What are the prospects of the Meadowlands racetrack in North Jersey getting a casino? The proposal, supported by North Jersey lawmakers but opposed by lawmakers in South Jersey as well as the Atlantic City casinos, has been debated for years.
A: The Senate president and the governor have both made it very clear that they are not going to allow that to move forward in the short term. I’ve heard numbers as much as five years from now.
Q: Revel will open its $2.4 billion casino on April 2. What do you think Revel will do in terms of revitalizing the city?
A: (Revel CEO) Kevin DeSanctis has always told me, “Remember, Dave, Atlantic City is only 47 blocks wide.” So if we can take an area like that up there that is definitely in need of rehabilitation and economic development and make it work there, then I think we have the ability to expand and have an explosion of growth and development beyond that area.
Then it becomes a momentum that builds beyond just the casino. So I see the casino not just being another new casino that is bright, modern and different than any other one, but also being an economic development driver for a region of the city and, hopefully, then takes it and expands into that 47-block area.
We are all real optimistic here. Let’s not forget we are working with another casino operator who may want to come into New Jersey — that being Hard Rock at the other end of the city. If they can get their financing and they can get their act together to allow for a new casino at that end, then we have another economic driver in another part of the city.
Q: Crime fears have escalated in Atlantic City since a fatal carjacking in September at Trump Taj Mahal Casino Resort. That was the second fatal carjacking of an Atlantic City visitor in the past two years. Can you say for sure that Atlantic City is safer for tourists?
A: There has been no lower day than that last shooting murder that occurred in Atlantic City, because it happened at a time when I thought we were starting to get momentum in doing good things. So given that incident, which was terribly tragic and one that is unexplainable, we essentially doubled our efforts in working with (Tourism District Commander) Tom Gilbert as well as the CRDA and the casinos. We just took additional steps to say, “You’ve got to do more.”
One of the things we also instituted is, I met with the casino leadership and I essentially told them, “Your security for your entire property is now of concern to the director of the Division of Gaming Enforcement, not just the gaming floor.” And when I said the entire property, what I meant was the hotel, the garage, the Boardwalk for the properties that have Boardwalk frontage, the side streets, and their property.
You know there is only so much they can do. They can’t go outside of their property. But I made it very clear to them in a meeting. I said that you are responsible for all of your property and I will, as a representative of state government, expect you to do more on your entire property. And they have stepped up. They have done an awful lot. I have to give them credit for that. I’ve think I have a good rapport with most of them.
When we have disagreements, we work it out professionally. I don’t hold a grudge against them. We are all trying to do the same thing. We are trying to make it a successful tourism destination that people will come to, have a great time and want to come back. They get it. I have been very pleased since that date on the additional steps that have been taken.
So to answer your question, yes, today we are in better shape than we ever were. Do we need to improve? Yes. Will we continue to improve? Yes. And there are a lot of things out there that are going to help. You’re looking at additional police officers at high times that are going to be installed by the ACPD. You’re looking at additional police officers, period, with the specialists coming on board.
The new lighting on the Boardwalk, a huge improvement, you can see it for yourself where it’s already been done. It’s going to be finished well before the beginning of the summer season. The (blighted) buildings are getting torn down, and there’s going to be more that will be torn down because of the money that is being put against that and the efforts that have been taken.
There has been great cooperation from the city. I know we had our disagreements initially, but anybody who sees what has been transpiring for the last probably three or four months with the city and CRDA has to realize they are starting to work together better. We just have to keep working together. This is not easy.
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