New Jersey Legal Gambling and Poker Laws

New Jersey Legal Gambling Online
Gambling and Poker Laws in New Jersey

New Jersey is a certified poker destination for players not only from the East Coast, but from across the US and around the world.  While it may lack a bit of the glitz of a Las Vegas, New Jersey remains a significant part of the poker universe.  Online poker has also caught on in the Garden State, so it's not surprising that we consistently receive questions from our members in New Jersey concerning how poker works online, the process for signing up and the legal issues involved in online poker.  Those are all questions we'll address here in one place with our Guide to New Jersey and Online Poker.

Update as of 2016

This section is an updated version of the original article. While the the information on this page is correct, some new legislation might be in effect since thie page was originally written. We've left the orginal article in tact below the new information.

Overview of New Jersey Gambling From 2013 - 2016

No US state has had more changes to its gambling laws than New Jersey in the past 3 years. New Jersey had its rollout for online casinos and poker sites. The state also has been in a multi-year legal struggle with the major American sports leagues in an attempt to legalize sports betting.

In other news, New Jersey became the only state since Black Friday to offer PokerStars a gaming license. Several bills were passed to help Atlantic City avoid bankruptcy, or otherwise help the casino industry there. Finally, a casino referendum is set for the November election which might approve land-based casinos in the northern reaches of the state, near New York City.

I'll cover each of those happenings below, each in their turn.

Legal Online Gambling in New Jersey

In November 2013, the rollout for licensed and regulated online gambling in New Jersey happened. Eventually, five different partnerships emerged, with a number of ancillary companies involved. The five partnerships currently are: Borgata and PartyPoker, Golden Nugget and Betfair, Tropicana and Virgin Casino, Caesars Interactive and 888 Holdings, and Resorts Digital Gaming and PokerStars. It was not always that cut-and-dried.

A month prior to the rollout on November 21, 2013, the Division of Gaming Enforcement suspended the review of PokerStars' license application. This did not mean it was rejected -- just suspended. PokerStars was left in a legal limbo which would last until October 2015, because of its role in the Black Friday Scandal of 2011. PokerStars executives were indicted by the U.S. Justice Department, so the DGE did not want to license their company.

In August 2014, Amaya Gaming Inc. out of Montreal, Quebec bought Rational Group, which owned PokerStars and Full Tilt Poker. Amaya CEO David Baazov would campaign for over a year to get PokerStars licensed in New Jersey. Ironically, Baazov eventually was indicted in an insider trading scandal in Canada, and had to resign (temporarily) from Amaya Gaming's board of directors. (That case is still pending.)

While the US poker community awaited PokerStars' re-entry into the United States gaming market, Borgata emerged as the leader in the online casino market. Caesars Interactive's various websites combined to make Caesars the number two operator. Tropicana and Golden Nugget were fairly even in the 3rd and 4th spots, while Resorts Casino waited (and waited) for PokerStars to be licensed. About six months before that happened, Resorts Casino entered a partnership with NYX Gaming, which is 10% owned by Amaya.

Disappointing Numbers in New Jersey

The numbers in the online casino and poker market were disappointing, especially at first. The geolocation software did not work properly, so many gamblers on the borders of New Jersey could not play, because their devices showed they were in Pennsylvania or New York State. Also, credit card payments often declined. Visa payments only succeeded about 43% of the time, while MasterCard payments worked about 70% of the time. This caused significant confusion and frustration with new registrants, helping to slow down signups.

Gov. Chris Christie once predicted New Jersey online gambling would generate $1 billion a year. It turned out it was more like $120 million a year. Online casinos did better than online card rooms, with the iCasinos making perhaps 60% to 65% of the revenues. Despite this, New Jersey officials did not enter into an interstate poker compact with Nevada and Delaware, which would have increased player liquidity. Measures were taken to fix the geolocation software glitches and the credit card issues, which has helped with the growth in revenues.

Despite the boost in revenues, it became apparent that online gambling would not be the panacea for Atlantic City casinos. Thus, the governor and the legislature took other measures to boost Atlantic City's finances.

Legalized Sports Betting

In another attempt to help Atlantic City, the leaders of New Jersey have attempted the past 5 years to promote legal sports betting in the state. In 2011, the people of New Jersey voted in a referendum that would allow licensed and regulated sportsbooks in the state. That led to attempts in 2012 to legalize and regulate sportsbooks in the casinos and racetracks of New Jersey.

When it appeared this might happen, a coalition of the American sports associations filed a joint lawsuit against New Jersey. The group of associations was the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), National Hockey League (NHL), and National College Athletics Association (NCAA). They argued that New Jersey was violating the Professional and Amateur Sports Protection Act (PASPA) of 1992.

The PASPA law was pushed by the NFL in 1992, because they wanted to ban sports betting at the federal level in all 50 states. Nevada had been operating sportsbooks for year, so they lobbied Congress to avoid having their money-generating bookmakers outlawed. The sports leagues argued successfully that sports betting would undermine their sports, so Congress made a compromise. Those states with legal sports betting would be grandfathered in to the law. This ended up being four states: Nevada, Oregon, Montana, and Delaware. The latter three states had sports lotteries -- less than full sportsbooks -- but their forms of gambling were protected in those states.

New Jersey was given one year to legalize sportsbooks, but the New Jersey State Legislature failed to do so. At the time, New Jersey's leaders did not see the urgency. 1992-93 was only 6-7 years after the US Supreme Court ruling which granted Native American tribes the right to build casinos on their reservations, because they were sovereign nations by treaty rights (with the US government). As late as 1989, New Jersey and Nevada were the only states with casinos, so Atlantic City had a seeming monopoly east of the Mississippi. In the years since, many states near New Jersey -- Pennsylvania, Delaware, New York, and Connecticut -- legalized tribal or private casinos. Some placed slot machines in racetracks.

New Jersey lost its monopoly and its casino industry collapsed. Sports betting would give the industry an advantage over nearby rivals. So it attempted to legalize sports betting. So far, that has been unsuccessful.

New Jersey's Sports Betting Lawsuits

The case went to the court of U.S. District Judge Michael Shipp in Trenton, who ruled in favor of the sports leagues. New Jersey appealed to the Third Circuit Court of Appeals in Philadelphia, which confirmed Shipp's ruling. New Jersey appealed to the U.S. Supreme Court, which declined to hear the case.

Taking the advice of the Third Court of Appeals, New Jersey's lawmakers struck down the state law regulating sportsbooks. Instead, the state would choose not to enforce sports betting laws, providing de facto legalization by choosing not to regulate the industry. Monmouth Park, a racetrack in North Jersey, planned with William Hill to open a sportsbook in October 2014.

Once again, the sports leagues sued. Once again, the case went before Judge Michael Shipp, who ruled against New Jersey. Gov. Chris Christie appealed to the Third Court of Appeals, which once again ruled against the state. Christie's lawyers called for an appeal using the "en banc" option, meaning all the 24 judges in the appellate court would rule on the case (instead of the original 3 judges). Surprisingly, the Third Court of Appeals granted that request. Both sides have made their case before the en banc group of judges, and are awaiting a judgment. If the court rules in New Jersey's favor, sports betting will be legal and the PASPA law will be all-but-dead (pending appeals).

PILOT Bill for Atlantic City Casinos

In 2015, a PILOT bill was passed to help Atlantic City standardize their annual tax burden. PILOT stands for "Payment in Lieu of Taxes", and it set the tax rate for the combined Atlantic City casinos at $120 million a year for the next 15 years. The idea was to avoid costly annual legal battles the state of New Jersey and the AC casinos have over tax rates. Each year, the state assesses taxes, only to have the casinos file tax appeals. The lawyers win, but both sides waste a lot of money on legal fees.

The bill gives casino operators a chance to project costs years in advance, which is a help itself. The PILOT bill could spell trouble for the future, though. If the North Jersey casino referendum succeeds, the fixed PILOT payments might require a heavier tax burden than otherwise would have happened, as Atlantic City revenues dipped. Also, if one or more Atlantic City casinos closed their doors, it would push more of a burden on the remaining casinos. At the same time, if new casinos appeared in Atlantic City (such as Revel Casino), the casinos might pay a smaller percentage in taxes than they had figured.

2014 Atlantic City Casino Closures

Since it was mentioned, I'll quickly discuss the wave of casino closures in Atlantic City in 2014. To begin 2014, the city had 12 brick-and-mortar casinos. Almost immediately, the Atlantic Club closed its doors. The closure actually was brought about by Caesars Entertainment and Tropicana Casino, which partnered to buy the Atlantic Club in a bankruptcy option, then close their former competitor. Caesars Entertainment received Atlantic Club's player database, while Tropicana received the casino's gaming equipment at a discount.

In August and September of 2014, the real disaster hit the Boardwalk's casino industry. Caesars Entertainment decided to close the Showboat in Late-August. The Showboat was profitable, but Caesars wanted to consolidate its customer base in its remaining three AC casinos: Caesar's Atlantic City, Bally's, and Harrah's. Caesars has $23 billion in debt, so the Showboat's closure is a sign of the financial trouble the biggest domestic casino company in the US has.

On September 16, the Trump Plaza closed its door. Trump Plaza had been in enough disrepair that Donald Trump wanted his name taken off the property in August 2014, fearing it would tarnish his image. At the time, there were rumors that Trump Taj Mahal would close.

Trump Taj Mahal Bankruptcy

The Trump Taj Mahal entered bankruptcy in October 2014. At the time, Carl Icahn was the biggest creditor of Trump Entertainment Resorts, which owns the Trump Taj Mahal. Icahn was owed $290 million and he was clearly in a position to take control of the Taj. In October 2014, the famed activist investor and Tropicana Casino owner filed a motion to have the Tropicana's worker’s union, the Local 54 of Unite-HERE, lose its health and pension benefits. A judge ruled in Icahn's favor, setting off acrimony which continues to this day.

Meanwhile, Carl Icahn was taking control the Trump Taj Mahal in the bankruptcy process. In December 2014, he loaned an additional $20 million to the Taj in order to keep it afloat through much of 2015. In the early months of 2015, Icahn cemented his control of the casino. Donald Trump and his daughter, Ivanka, praised Icahn as a family friend who would turn the casino around. The Donald agreed to keep his name on the casino, no doubt with additional incentives.

The Trump Taj Mahal is the one casino in Atlantic City which is not running a profit at present. As of July 2016, Carl Icahn continues to negotiate with the Local 54 on health and pension benefits. The union has voted to strike, if no deal is reached by July 4. Meanwhile, Icahn has reneged on a pledge he made before the judge in October 2014 to invest $100 million in renovations for the Trump Taj Mahal. The billionaire claims he cannot invest that kind of money in the troubled casino, if the North Jersey casino referendum passes.

Revel Casino Bankruptcy

Revel Casino closed on September 2. Revel Casino had troubled before its doors opened in April 2012. The Revel Building is the most expensive skyscraper in Atlantic City history. The $2.4 billion building was conceived as a Vegas-style integrated casino-resort. Morgan Stanley pulled out of construction, walking away from a $900 million investment. Revel Casino was envisioned before the Global Recession and the global financial institution realized it was a bad idea to open such a grand casino in the prevailing economic climate of 2012.

Revel Entertainment Group opened anyway, on April 2, 2012. The casino was in business for 29 months, undergoing two bankruptcies along the way. Its most famous contribution to American culture during its time in operation was to be the setting of the Ray Rice elevator altercation with his then-fiancé, Janay Palmer. Videos of Rice knocking out Palmer in the Revel Casino's elevator caused a national outrage. Meanwhile, Revel Casino was failing. When the company underwent a second bankruptcy in June 2014. After no bidders emerged, in September 2014, it closed its doors.

In October 2014, two bids were entered in a bankruptcy auction for the Revel Building. One was Brookfield USA Holdings LLC, a Canadian developer with global interests. The other was Polo North, a Florida development company (and country club) owned by Glenn Straub. Brookfield Management won the bankruptcy option, with a bid of $110 million against Polo North's $93 million bid. Brookfield Management could not renegotiate energy prices with the building's supplier, ACR Energy Partners, which charged $3 million a month for electricity. Citing an inability to make a profit at that price, Brookfield pulled out of the process in December 2014.

Polo North was now the lone bidder, so it began to proceed with the process over the next few months. It was not an easy process, though. ACR Energy Partners sued to stop Polo North's purchase in January 2015. Then it filed a motion which would allow it to stop providing energy for the Revel Building in February 2015. In early March 2015, Los Angeles developer Izek Schomof entered the scene with a $80 million bid. Eventually, Schomof exited the negotiations, because he could not renegotiate energy prices with ACR Energy Partners. Glenn Straub won the bidding for $82 million -- less than 5% of what the casino cost to build.

Revel Casino is still not opened. Glenn Straub, the irascible owner of Polo North, has been mired in lawsuits with Revel's tenants and with ACR Energy. After months of legal squabbles, Straub eventually bought out ACR Energy for $30 million, so he now controls energy supply to his casino, for what would have been 10 months of electricity. Straub is now feuding with the Division of Gaming Enforcement, which wants him to get a full casino license. Glenn Straub, who claims he'll have on outside management firm handle casino operations, claims he should only need to receive a vendors license (which is quicker and cheaper).

Eventually, there will be a new Revel Casino. Some of the other casino operators in Atlantic City fear a 9th casino will hurt business in the other 8.

MGM Resorts Returns

Borgata Casino is now fully owned by MGM Resorts, which had been barred from New Jersey gaming for 5 years. In the interim, Borgata was owned by Boyd Gaming. Borgata is the most profitable casino in Atlantic City, generating almost half of the city's gaming revenues. Some believe MGM Resorts’ return is well-timed to collect a North Jersey casino license.

North Jersey Casino Referendum

The biggest issue facing New Jersey gambling in 2016 is the upcoming North Jersey casino referendum. The issue of whether to build two casinos in the Northern end of New Jersey is going to be on the November ballot. Over the years, the states of Pennsylvania and New York have built a significant number of casinos, with more on the way. Also, New York has approved video lottery terminals (VLTs), while Pennsylvania placed slot machines in their racetracks.

With nearer gaming opportunities, Pennsylvanians and New Yorkers have stayed home to gamble. Atlantic City's gaming revenues have dwindled from $5.4 billion in 2006 to less than $2.4 billion in 2016. Faced with the saturation and localization of casino gambling, many New Jersey leaders want to build casinos in North Jersey.

If passed, New Jersey will receive two casino licenses, likely in Jersey City and the Meadowlands. The casinos cannot be within 70 miles of Atlantic City. Bids on the developments must exceed $1 billion. Only those holding Atlantic City casino licenses can submit plans. If enough license holders do not submit plans within 6 months, outside interests can apply for a casino license.

The issue is controversial. Supporters of Atlantic City say North Jersey casinos will destroy what's left of the Atlantic City casino industry. Proponents of North Jersey say Atlantic City is already finished, but two profitable casinos in the outskirts of New York City would generate enormous tax revenues. New Jersey State Senate President Stephen Sweeney introduced a plan to send $1 billion of those revenues (over a 10-year period) to Atlantic City, to help it transition to a non-gaming economy. At the moment, that is the plan.

New Jersey's Changing Gambling Industry

As readers can see, New Jersey has an evolving gambling industry. Atlantic City might not be the bastion of casino gambling it has been in the Garden State. North Jersey might become the new center of casino gambling in the next few years. Sports betting might become legal, while online gambling should continue to expand. Whatever the case, New Jersey is inexorably tied to gambling and should for decades to come.

Daily Fantasy Sports in New Jersey

State Senator Jim Whelan, a Democrat from Atlantic City, sponsored a daily fantasy sports bill on March 7, 2016. The bill would regulate the DFS industry in New Jersey, taxing sites like DraftKings and FanDuel at a 9.25% tax rate. That is the same rate that Atlantic City casinos pay on their revenues, and slightly under the national average for the nascent daily fantasy sports industry.

On March 14, the State Senate's Wagering and Tourism Committee voted 5-0 to approve Whelan's DFS bill, which is SB 1927. DraftKings and FanDuel opposed the legislation, because Whelan's bill did not specify daily fantasy sports as a game of skill or a game of chance. The DFS companies argue, if they applied for a license as a game of chance in New Jersey, it would make their activities illegal in dozens of other US states.

In those circumstances, the DFS companies likely would withdraw from the New Jersey market. The bill would be, in effect, a ban on daily fantasy sports in the state.

On June 9, SB 1927 was passed by the Senate Budget and Appropriations Committee. The successful vote means SB 1927 is going to receive a full vote on the floor of the New Jersey State Senate. If it passes, then it will move to the NJ State Assembly.

Online Poker in New Jersey

Best Licensed Online Poker Sites: New Jersey

When you start out with online poker, it's tempting to just sign up at the first room you come across.  After all, who wants to go to all of the trouble of comparing room after room when you just want to play poker? 

That's why we've simplified the process with this list of the top New Jersey online poker sites.  All of the sites on our list receive the highest ratings for operating legally, rewarding players generously and maintaining software that provides a smooth, safe online poker experience:

Most recent updates

2013 has been a staggeringly busy year for online gambling regulation in New Jersey. Not only did the legislature and Governor Chris Christie have an extended debate over the direction and nature of regulation, but they managed to resolve their differences and pass a bill into law within the space of two short months.

The New Jersey Division of Gaming Enforcement is now tasked with developing the nuts and bolts of the regulations that will govern online gambling and online poker in the state. That process is ongoing, but largely shielded from public view.
While regulation was becoming a legislative reality, PokerStars began the process of acquiring an Atlantic City casino in early 2013.

Why would an online poker site want to purchase a struggling brick-and-mortar casino? Because New Jersey's online gambling bill limits license applications to land-based operators, meaning that the casino purchase is the only way for PokerStars to enter the New Jersey online gambling market. Observers expect the license process to be resolved by summer's end, but there's no consensus on PokerStars' chances for approval.

Watch our poker news section for daily updates on regulation and other important topics for US online poker players.

Playing New Jersey Online Poker

Unlike neighboring state New York, poker players in New Jersey aren't restricted from signing up at most online poker rooms.  The rule of thumb for New Jersey online poker players: if a site accepts US players, then you can be pretty confident New Jersey residents will also be allowed to create an account.

Online Poker Legality: New Jersey

Two things we always have to get out of the way before talking about online poker and the law.  The first is that this page does not offer legal advice, and you should not treat it as any sort of substitute for legal advice.  The second is that knowing your state law is always a good idea, so we strongly suggest you bookmark the New Jersey State Statutes online [1].

Our purpose with this section is to bring some of the crucial elements of New Jersey gambling law to your attention.  Hopefully with this quick foundation, you'll have a much easier time digesting state law than you would otherwise have.

  1. Under New Jersey law it's explicitly illegal to make just about any bet or wager: "All wagers, bets or stakes made to depend upon any race or game, or upon any gaming by lot or chance, or upon any lot, chance, casualty or unknown or contingent event, shall be unlawful" (Section 2A:40-1).
  2. The law offers a supplemental (and very standard) definition of gambling: "staking or risking something of value upon the outcome of a contest of chance or a future contingent event not under the actor's control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome" (Section 2C:37-1).
  3. Just like Nevada, the overwhelming focus of gambling law in New Jersey is on the operator, not the player.  Players do not face a specific criminal charge for simply participating in illegal gambling activity, although the line between a player and an operator can begin to blur very quickly.  For example, telling a friend about an illegal poker game or offering to step in as dealer could move you from the "player" column to the "promoting gambling" column under New Jersey law.
  4. "Promoting gambling" (2C:37-2) is a charge with a broad scope.  It includes participating in the "proceeds" of gambling activity as well as conduct that "materially aids any form of gambling activity."  Depending on the size of the illegal gambling operation, punishment can run from a citation to several years in jail.
  5. What constitutes material aid? Section 2C:37-2(a(2)) makes it clear that just about anything could potentially fall under this term, which "includes but is not limited to conduct directed toward the creation or establishment of the particular game, contest, scheme, device or activity involved, toward the acquisition or maintenance of premises, paraphernalia, equipment or apparatus thereof, toward the solicitation or inducement of persons to participate therein, toward the actual conduct of the playing phases thereof, toward the arrangement of any of its financial or recording phases, or toward any other phase of its operation."

Will New Jersey Regulate Online Poker Soon?

The answer to this question is almost certainly yes.  New Jersey has been inching in the direction of regulated online poker for a few years at this point, and we firmly believe that the progress of other states on the matter is exerting real pressure on New Jersey to move forward with a law to regulate poker played online in the near term.  This pressure will become especially acute once Nevada's regulated online poker rooms come online in earnest, likely in late 2013-early 2014.

New Jersey Gambling Facts

Background of Regulated Gambling in New Jersey

Many assume that the story of gambling in New Jersey begins and ends with Atlantic City, but there's a longer tale behind the casinos on the boardwalk, which have only been open since 1978.  Over a century before an Atlantic City casino took its first bet, New Jersey residents were risking their paychecks on horse races at Monmouth Park.  That industry was shut down by the law at the turn of the century, and regulated gambling didn't return in earnest until 1970 when the state approved a lottery.

Current Regulated Gambling Options in New Jersey

Today that lottery sits aside one of the largest collections of commercial casinos found anywhere on the globe.  Atlantic City made it an even dozen in 2012 with the opening of Revel.  Outside of Atlantic City you'll find other regulated gaming activity like pari-mutuel wagering at tracks and OTBs, charitable gambling events and social gambling (as permitted within the law).

Current Regulated Online Gambling Options in New Jersey

Everyone seems to agree that regulated Internet gambling will eventually come to New Jersey.  Putting a firm date on "eventually" has been the trouble to date.  There has been talk of regulating online poker and other forms of gambling since 2010, but a bill has yet to advance to the Governor's desk.  Until "eventually" becomes something a bit closer to the present tense, poker players will have to continue to rely on regulators from other jurisdictions.

New Jersey Online Poker & Gambling News

Much of recent media coverage has focused on the financial woes afflicting the state's casino industry [2], but another story has also been brewing over the course of the last year: New Jersey is taking on what seems to be all comers - professional sports leagues, the BCAA and the federal government - in its bid to legalize sports betting [3].  Both stories are likely to continue to develop in the weeks and months ahead, as will New Jersey's ongoing attempts to regulate online poker.

New Jersey Gambling Research [4].  The official website of the city provides information about the casinos that drive Atlantic City, along with a detailed picture of the region beyond the casinos.

Division of Gaming Enforcement [5].  Complete set of resources regarding land-based casino gambling in new Jersey.  Financial records, self-exclusion information, game testing and all other relevant information can be found at the DGE's homepage. [6].  Site of gambling law expert I Nelson Rose, who frequently writes about New Jersey's push into online gambling and sports betting.

New Jersey's Place in Poker History

While Las Vegas may be the ultimate poker destination, Atlantic City is arguably just as iconic for a certain generation of poker players.  It is, of course, the casinos of Atlantic City - not Vegas - that provided the backdrop for Rounders, for many the definitive modern poker movie.  New Jersey is also the original home of the man many consider to be the absolute best in the game: Phil Ivey [7]

Of course, Ivey now resides in Vegas, so that's a point against New Jersey

Sources & Citations For This Article on New Jersey Online Poker