New Jersey becomes latest state to approve online gambling

Already fierce competitors, Nevada and New Jersey are preparing to open a second front in their fight for gambling dollars, this time in the virtual world of online gaming.

On Tuesday, New Jersey Gov. Chris Christie signed a law legalizing Internet betting, following Nevada, which approved its version last week and hopes to be online for poker within months. Tiny Delaware is also in the hunt for online riches and could be taking bets by this fall.

All three states will be offering online gaming, especially poker, to those living or visiting within their borders. At some point, however, all are hoping to be the regulatory vehicle for running such gaming to anyone who uses a computer, tablet or smartphone anywhere they exist. The value of offshore gaming is estimated well into the billions of dollars.

Christie’s action has more of an immediate local impact and is the largest expansion of legalized gambling in the Garden State since casinos began operating legally in Atlantic City in the late 1970s.

“This was a critical decision, and one that I did not make lightly,” Christie said. “But with the proper regulatory framework and safeguards that I insisted on including in the bill, I am confident that we are offering a responsible yet exciting option that will make Atlantic City more competitive while also bringing financial benefits to New Jersey as a whole.”

The bill, which was revised to meet Christie’s objections, calls for a 10-year trial period for online betting and raises the taxes on Atlantic City winnings to 15%. The state estimates that online gaming will help push the state’s Casino Revenue Fund from $235 million this year to $436 million next year.

For both New Jersey and Nevada, online gambling, particularly from poker, is designed to supplement the state’s cut and increase tourism. Such intrastate gaming will be worth an additional $2 million to $3 million to Nevada, state officials there estimate. Because its population is smaller, Nevada will not see as big of a revenue jump from intrastate gaming as New Jersey, which could go online in about six months to a year.

Stocks in gaming companies rose Wednesday in early morning trading. Shares of Caesars Entertainment, which runs four New Jersey casinos -- Bally’s Atlantic City, Caesars Atlantic City, Harrah’s Resort Atlantic City and Showboat Atlantic City -- rose 4% while shares Boyd Gaming, which operates the Borgata Hotel and Casino resort, rose 3%. Online gaming companies also saw their shares rise in value.

But there are still hurdles to be overcome before online gaming reaches its full potential.

The federal government changed its position in 2011 to allow some online gaming within states where gambling is legal, but it is unknown whether the federal government will move to broaden the market.

In addition, states probably will have to negotiate with each other and enter into agreements, or compacts, that will determine the conditions of operation across state lines.

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