NJ Division of Gaming Enforcement
Online Gambling laws have been a hot topic in the United States of America for quite some time now. On a Federal level, online gambling is illegal. The government implemented the Federal Wire Act to make it very difficult for citizens to transact between their banks and online gambling operators.
Up until a few years ago, the individual states resigned themselves to the fact that only select areas would be able to enjoy the revenues from land-based casino play only. Over the last decade though, we have seen a rise in rebuttal against the government by individual states, to legalise internet gambling. Certain states like Delaware, Pennsylvania, Nevada, and New Jersey have managed to effectively change the legislation in their states, legalising online casino gambling and sports betting, with the proviso that they would heavily regulate the practice.
Each of the states is therefore responsible for monitoring and regulating online gambling in order to ensure that the practice remains untainted by crime and performs fairly.
The state of New Jersey enjoys online gambling presiding from the hub of Atlantic City. The New Jersey Division of Gaming Enforcement (NJDGE) is the regulator in charge of all gambling practices within the state. They have been in place since 1977, but find that their role has changed as from 2013 when gambling became legalised in the state.
While a 10 year trial period has been legislated, the period is being treated as a foundation phase on which to grow the industry and prove that well-regulated gambling can work and aid greatly in bringing in revenues. The mission of the NJDGE is therefore very clear:
“To protect the public interest by maintaining a legitimate and viable casino gaming industry, free from the influences of organized crime, and assuring honesty, good character, and integrity of casino owners, operators, employees, and vendors.”
THE NATURE OF THE REGULATION
New Jersey gambling regulation is extremely strict, ensuring that only the fairest gambling practices are adhered to in the state. In order for the state to maintain the level of regulation they desire, they have closed borders towards remote casino practices, who they would have a hard time controlling. All licensed online casinos must reside and have a legitimate business base in Atlantic City itself to qualify for a gambling permit.
Initially, only licenses were awarded to the 11 land-based casinos that were in Atlantic City, which has since then been reduced to 8 establishments, but the expansion Act allowed for licenses to be garnished to other casino operators who set up shop in the city, as well. This is why big international casino brands, like William Hill and 888 Casino have acquired legal licensing in the state for sports betting and casino gaming.
As part of the strict control, players from outside of New Jersey state are not permitted to play at NJDGE regulated sites (though William Hill and others have sites facing the rest of the world too). However, if you are over 21 and are physically inside the borders of the region for any reason (residing, visiting, or passing through), you can enjoy the great variety of online gambling entertainment available to you. The NJDGE casinos use sophisticated Geolocation Software to keep outsiders away from their sites. Any casino contravening this regulation will face the penalty of losing their license.
All illegal betting vendors face hefty fines and even up to 5 years imprisonment for operating without a license. All of this legislation and strict regulation is in place simply to protect the people of New Jersey against rogue agents and extensive losses. Players can rest assured at NJDGE casinos that they have the benefits of:
- Legal regulation: All casinos are answerable to the NJDGE for malpractice and unfair treatment of customers. This means that there is fair recourse for players who feel abused.
- Fair gaming software: Software is rigorously tested and monitored to maintain strict technical standards. By law, each casino is mandated to employ a team dedicated to the prevention of cheating. This comes into play more in the poker rooms than anywhere else though.
- Easy banking: Thanks to the legalisation of gambling in the state, those transacting with online casinos in the state will not be affected by the Federal Wire Act of the USA.
- Gamification: The inclusion of other online casino specialists into the mix of licensed operators has maintained a healthy sense of competition, ensuring that players have at their disposal some great bonuses, promotions, and games to play.
BENEFITS FOR CASINO OPERATORS
Often times gambling hubs are formed in areas with very low taxation on gambling services, like Malta, Gibraltar, and others. This is not the case with New Jersey, who charge online vendors 15% Tax, as opposed to the land-based rate of only 8%. So, there must be other advantages that supersede the high tax rate, to make vendors want to set up shop in New Jersey. Here are some of the benefits for casinos licensed in New Jersey we found:
- New Jersey is a new budding market with great growth. Statistics show that gambling revenues are only set to increase. Having an NJDGE license offers an operator the chance to tap this strong market.
- Competition is limited in the area, with the NJDGE very cautious about flooding the market with operators. Casinos, therefore, all have a slice of the pie.
- Having a regulatory body residing over you is a form of security from player abuse, allowing casinos the necessary recourse and backing they may need.
THE INS AND OUTS OF LICENSING
Obtaining a license to operate an online sports betting or casino gambling business in New Jersey is both an expensive and involved process. The high fees ensure that only seasoned operators can license in the area, keeping smaller, less experienced vendors away.
For a company wanting to apply for a license in this jurisdiction, they will need to fill in the following forms:
- Business Entity Disclosure Form: This is for the registration of the casino as a business. Here you will need to provide information regarding your accounting and financial standings, software used, and company history.
- Multi-jurisdictional Personal History Disclosure Form: Here, you will need to furnish personal information on every holder, director, affiliate, principle employee (mangers), financial backers, and investors of the company. The DGE then does a full background check of the financial responsibility, integrity, and good character of each individual, in keeping with the policies mandated by the Casino Control Act. They will then receive their own Personal Key Member License to operate in the industry.
- Service Industry Licensing: Company related to the casino business who operate in servicing the industry need to apply for a separate permit in order to do so.
Once the strict vetting process and investigation into the company and its staff is cleared, the best online casino or sportsbook may be awarded their permit for trade. But the legislation does not stop there. Throughout the course of the year, the casino is expected to supply the regulator with ongoing information. This includes:
- Final minutes of all Board of Director Meetings and Committee Meetings.
- Any information with regards to changes, upgrades and adaptions to security protocols to be implemented on the site.
- Any changes in the corporate entity of the business, including resignations, dismissals, title changes, and other updates to the structure of the company.
COSTS OF LICENSING
Aside from the intricacies of the licensing procedure which are very thorough, the fees involved are quite expensive. The initial licensing costs a deposit of $100,000 with an issuance fee of $300,000 upon licensing. Renewals can cost up to $250,000 per year with a cost of up to $4,750 per key employee license (renewable every 5 years). Added charges of up to $250,000 are levied for Responsible Internet Gaming levies.
With the above costs and the strict vetting processes, casinos who apply for licensing in this jurisdiction are sure to toe the line and avoid wasting excessive amounts of effort and money each year.
VERDICT ON NJ DIVISION OF GAMING ENFORCEMENT
The New Jersey Division of Gaming Enforcement is a legitimate Gambling regulator that answers to the state and is driven by the legislature, as laid out in the Casino Control Act.
All casinos licensed in this jurisdiction are continuously monitored by people on the ground in Atlantic City, ensuring that safe, fair, and ethical practices are maintained. In order to stand in good stead under the Federal Government, the state must show due diligence in gambling enforcement, which it strives to do with the help of the NJDGE and the Gambling Control Commission.