The recent New Jersey internet wagering legislation, co-sponsored by N.J. State Senators Lezniak and Whelan, appears to have momentum.  The buzz throughout the state capital is that some version of the legislation will be passed soon, perhaps as early as June.  As with a similar internet wagering bill that passed the New Jersey Legislature last year prior to being vetoed by the Governor, only Atlantic City casinos will be permitted to offer gamblers the ability to wager of the internet.

Although there will likely be changes to the latest version of the bill, it appears well settled that the legislation’s primary objective is to support the struggling New Jersey casino industry, not to compete with it.  As such, do not anticipate current, non–U.S. internet wagering websites to be offering internet wagering options in New Jersey, unless they only provide software support services to existing New Jersey casinos.

The most recent version of the internet wagering legislation is silent as to licensing requirements for internet/technology providers because the legislation only permits licensed casinos to offer internet wagering.  The legislation otherwise defers to the N.J. Casino Control Act (“Act”) with regards to licensing issues.  Under the current Act, if an internet software company were to provide a New Jersey casino with software and technical support so as to enable a casino to operate an internet website, it is likely the internet software company would be required to obtain a license under §92(a) of the Act, the same section under which a slot machine manufacturer is licensed.

What if an internet/technology company wants to do more than simply provide software support for internet wagering?  What if both the internet/technology company and the Atlantic City casino agree that the internet/technology company will be involved in the operational aspects of internet wagering and perhaps even share in the internet gaming revenue?  Under the current Act, such an internet company would most certainly be required to obtain a casino license in order to share in internet gaming revenue.  Perhaps subsequent drafts of the legislation will address this issue more specifically moving forward and create a new type of internet provider license.

Regardless, the legislature would be wise to allow New Jersey casinos to explore and enter into all types of business options when it comes to internet wagering and not limit the casinos’ flexibility to offer world class internet options.  Both the New Jersey Division of Gaming Enforcement and Casino Control Commission certainly have the experience to deal with any type of licensing scenario so as to insure the integrity of all involved in internet wagering in New Jersey.  How it plays out remains to be seen.