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Thursday, February 7, 2013

Time for Exchange Wagering in New Jersey

While Governor Christie has conditionally vetoed the Internet gaming bill, casino supporters are claiming a victory, meaning unless someone is successful in the courts claiming the legislation is unconstitutional for violating the constitutional limits on restricting casino gambling to Atlantic City, racing will be in a pickle. As a result, it is imperative that NJ adopts Exchange Wagering as soon as possible.

The conditional veto message sent back to the legislature demands the tax rate on revenue be raised from 10% to 15% and stricter regulation and transparency about elected officials who have represented gaming entities; changes Senator Lesniak, the point person for this legislation is agreeable to the governor's changes. If the legislature approves Christie's changes, the legislation will become law.

Now comes the question of who (if ) will challenge the soon to be law on constitutional grounds? The whole bill depends on a liberal interpretation that because the servers are located in Atlantic City, the law complies to the state constitution. While I am not a lawyer or an expert in the constitution, it seems like legal fiction unless you consider the computer someone is sitting in front of in their bedroom in Teaneck as being in Atlantic City. After all while the servers are in Atlantic City, transmission of the wager goes through the Internet which goes through switches outside of the shore resort.

Will the racetracks challenge the law? That is an interesting question. After all, a challenge by the racetracks to overturn the law could be a case of cutting their nose off to spite themselves as it may alienate those very legislators they depend on for support. The best racing interests could hope for is an anti-gambling group to come forth to challenge the law.

In response to this outcome, the state racetracks must demand the NJRC quickly adopt rules for exchange wagering as this is the only way racing can compete against online casino gaming in the state, offer a wagering mechanism with a roughly 5% rake. Failure to offer exchange wagering will mean racing is conceding the Internet gaming market, something it can ill afford.


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