By Brian McGraw
Yesterday the New Jersey Assembly voted to approve a bill that would allow for residents of New Jersey to participate in some forms of online gambling offered through casinos licensed in Atlantic City. It will become law pending Governor Christie’s approval within the next few months.
With the failure of Harry Reid’s attempt in late 2010 to pass national legislation easing burdens on the internet gambling industry, advocates have been increasingly hopeful that states will begin to pick up the slack. Aside from New Jersey, online gambling bills have been considered in Florida, Iowa, and California.
The New Jersey bill (hopefully) has larger national implications. The bill might serve as a model demonstrating that allowing Americans to gamble within the confines of their own homes won’t end the world, that there will be safeguards in effect to alleviate concerns about limiting participation to adults, etc.
The legal implications aren’t completely clear to me but it will also somehow bump up against the Department of Justice’s continued seizure of funds related to online gaming — presumably they at least won’t be able to seize funds in New Jersey. In late 2010 over $8 million was frozen — hurting both companies offering online gaming and their consumers. When consumers request that funds be transferred to the sites or from the sites they must go through an intermediary. These intermediaries are under attack from the DoJ, and when their funds are frozen, online gaming providers must scramble to find other ways to withdraw money from player’s bank accounts or to get checks written to players in the case of withdrawing money from their online accounts (not to mention the fact that the U.S. government is effectively stealing $8 million dollars of profit, as the casino’s still provide payouts to players, even when initial payouts are seized). The frequency and scope of these seizures have been increasing, potentially ending the online poker industry in the United States without state or national legislation.