ATLANTIC CITY, N.J. — Gov. Chris Christie vetoed a bill Thursday that would have made New Jersey the third state to legalize gambling over the Internet, but he said he would sign it if it had a 10-year trial period and a higher tax rate on casinos.
It was the second time since 2011 that the Republican governor has vetoed an Internet-betting bill passed by the New Jersey Legislature. But the path Christie laid out toward winning his approval heartened supporters of online gambling, including Atlantic City's 12 casinos, numerous online betting companies and state lawmakers who hope to make the seaside resort a nationwide hub for Internet gambling.
The parent company of PokerStars, the world's largest online poker website, which is buying The Atlantic Club Casino Hotel in Atlantic City, said it looks forward to completing the purchase of the struggling casino in a marketplace that allows Internet gambling.
"We welcome the definitive statements made today by Gov. Christie in seeking to place New Jersey at the forefront of Internet gaming in the United States," said Eric Hollreiser, a spokesman for The Rational Group, based in Isle of Man. "We have consistently said that this bill will drive economic development and job creation in New Jersey and are committed to play our part in that process. The distinctive environment that I-Gaming can create for New Jersey is unprecedented, and we are pleased that Gov. Christie sees the significant benefits of mixing online and offline gaming."
Michael Frawley, the Atlantic Club's president, said the eventual legalization of online gambling in New Jersey will make the state "the leader in what is certain to become a new gaming model."
The Casino Association of New Jersey also welcomed Christie's comments.
"Our industry believes that Internet gaming is essential to the continued stabilization, development and success of Atlantic City through the generation of meaningful revenue, jobs and resultant tax revenues – objectives the governor has always facilitated," association President Tony Rodio said.
Nevada and Delaware have passed laws legalizing Internet betting, which also is going on offshore, untaxed and unregulated.
In a statement that read more like an endorsement than a veto, Christie said he supports online gambling, with some minor changes, including bumping up the tax rate on casinos' online winnings from 10 percent to 15 percent.
"Now is the time for our state to move forward, again leading the way for the nation, by becoming one of the first states to permit Internet gaming," Christie wrote. "While Atlantic City's reputation and stature as one of the premier resort destinations on the East Coast are well-chronicled, it is no secret that revenue from the region's most important industries, gaming and tourism, has been in decline.
If Christie signs a future bill, it would represent the largest expansion of legalized gambling in New Jersey since the first casino opened there in 1978.
State Sen. Raymond Lesniak, one of the state's staunchest supporters of Internet gambling, said he was encouraged by Christie's comments and predicted the changes the governor wants could be accomplished quickly in a new bill. Assemblyman John Amodeo predicted a new bill could pass by the end of March, saying, "the governor's expressed concerns can easily be addressed."
Joseph Brennan Jr., director of the Interactive Media Entertainment & Gaming Association, an online gambling trade association, was about as happy as someone whose key bill was just vetoed could be.
"The changes Gov. Christie has asked for show his commitment to New Jersey becoming the leader in iGaming," he said. "The protections they put in place are consistent with the governor's long-held desire to make New Jersey the epicenter of a safe and secure online gaming industry. There is still a little work to do, but this is a major victory."
The extra money online gambling would bring is needed as Atlantic City continues to lose market share, revenue and jobs to casinos in neighboring states. Since 2006, New Jersey's casino revenue has fallen from $5.2 billion to just over $3 billion last year.
In his comments to the Legislature, Christie, a former federal prosecutor, gave insight into the issues he'd been wrestling with regarding Internet gambling. He acknowledged that some experts "caution that this type of convenience gaming will lead to declines in tourism, and a loss of visitors to the region."
He said he also considered social impacts and recommended more funding for compulsive gambling treatment programs and "an annual analysis of the potential problems and harms associated with these new games" to be paid for by Internet gambling licensees.
"Our state cannot carelessly create a new generation of addicted gamers, sitting in their homes, using laptops or iPads, gambling away their salaries and their futures," the governor said.
He also recommended a series of ethical and legal protections to make sure Internet gambling is done transparently, including having lawmakers disclose any past or present representation of companies seeking online gambling licenses.
Christie vetoed New Jersey's first attempt at Internet gambling in March 2011, citing concerns about its constitutionality and worrying about the proliferation of illegal back-room Internet betting parlors that would be difficult to find and prosecute. The latest bill tried to address those concerns by providing hefty fines for anyone who runs or even advertises such a back-room betting parlor.
The bill would have legalized the online playing, for money, of any game currently offered at Atlantic City's casinos, including poker. It would have taxed Internet gambling revenues at 10 percent, up from the 8 percent that the casinos pay for money won on their premises.
Donald Weinbaum, executive director of the Council On Compulsive Gambling of New Jersey, said the state currently has about 350,000 problem gamblers, a number that would surely grow if the ease of online gambling was offered.
Wayne Parry can be reached at http://twitter.com/WayneParryAC
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