New Jersey Governor Phil Murphy signed sports gambling legislation into law this week. As the jurisdiction that led the effort which culminated in the Supreme Court decision striking down the Professional and Amateur Sports Protection Act (“PASPA”), all interested eyes had been on New Jersey to see how aggressively the State would move to allow sports gaming, and what form it would take.

What are the key components of New Jersey’s sports gambling legislation?

New Jersey recently unanimously amended the original bill that was the impetus for the ongoing nationwide legalization expansion in order for it to include more detailed rules and regulations concerning sports gambling. As a result, New Jersey’s legalized sports gaming market will be governed by rules that include the following provisions:

  • Permitting wagering on all sporting events except: (i) high school sports; (ii) most collegiate sports played in the State; and (iii) any collegiate sporting event in which a New Jersey-based school is a participant;
  • Permitting mobile and Internet sports wagering offered pursuant to partnerships between an online operator and casino/racetrack, subject to the approval of the Division of Gaming;
  • Limiting wagering to people that are: (i) 21 years of age or older; and (ii) located in the State;
  • Strict licensing requirements for casinos, racetracks, online sports pool operators, and key employees of those licensees, including employees directly involved in sports gambling operations;
  • Strict guidelines concerning revenue sharing agreements between sports wagering license holders and third-party vendors, including Internet and mobile sports pool operators; and
  • Taxes in the amount of 8.5% of licensed operators’ sports wagering gross annual revenue, or 13% of such revenue generated by Internet or mobile sports gambling.

What does the Future Hold for Sports Gambling?

New Jersey’s enactment and impending implementation of detailed regulations concerning legal sports gambling is a welcome development for all parties with vested interests in the nascent sports gambling industry. While it was expected that casinos and racetracks would be immediate beneficiaries of the State’s legalization efforts, New Jersey has also paved the way for expansive growth in the Internet and mobile sports gambling space. It is anticipated that until federal legislation is passed, many states will follow suit, implementing unique sports gambling regulations and allowing for mobile sports gambling in one form or another. With such growth opportunities and a rapidly-evolving regulatory climate, it is critical that those interested in entering this space work closely with knowledgeable gaming lawyers to review all aspects of their prospective licensing applications and associated offerings.