New Jersey boasts a thriving gambling industry with strictly regulated casino gaming, lotteries, sports betting, poker, on-course and off-course horse race wagering. Various forms of online gambling are also legal and available to residents across the Garden State. Only Nevada can match New Jersey in terms of gambling opportunities.
Betting activities have an extensive legacy here as New Jersey is largely considered one of the states with a more permissive attitude toward gambling. Gambling expanded outside Nevada in the mid-1970s after New Jersey residents voted in a referendum to approve the legalization of landbased casinos.
The first legal online casinos arrived in 2013 but it was not until the summer of 2018 that the first legal sportsbooks opened doors to residents. New Jersey’s historical SCOTUS victory ended the federal ban on sports wagering and led to a massive betting expansion throughout the US. More importantly, it allowed for state-sanctioned sports betting and New Jersey was among the first states to take advantage.
New Jersey has established itself as the country’s second-largest gambling hub and only Nevada surpasses it in terms of proceeds. With a gross gaming revenue in excess of $2.9 billion as of 2020, the gambling industry in the Garden State shows no signs of slowing down anytime soon.
Casino Gambling Legislation in New Jersey
Gambling in all its forms was theoretically illegal between 1894 and 1939, although enforcement of the prohibition was sporadic and largely ineffective. State legislature reintroduced legal on-course wagering on horse races in the late 1930s. The first attempts to bring regulated casino gambling to New Jersey were made three or so decades later but proved unsuccessful at first.
Casino Control Act of 1977
Legal Casino Games
Rules on Games and Their Conduct
Tipping and Gratuity Rules
Sanctions for Violations of the Casino Control Act
Assembly Bill 2578
Casino Control Act of 1977
Residents finally endorsed legal gaming during a 1976 referendum. Many were confident the casino legalization would aid the local economy and further the revitalization of Atlantic City, whose popularity as a resort town had started to dwindle after World War II. As a result, Governor Brendan Byrne approved the New Jersey Casino Control Act in early June 1977, allowing for regulated gaming but only on the territory of Atlantic City.
Legal Casino Games
The legislation restricts gambling to the premises of large resorts and hospitality complexes provided that they hold the necessary licenses. The law outlines the authorized gambling games licensed resorts can offer, which include slots, baccarat, craps, roulette, blackjack, sic bo, along with various forms of casino-banked poker like Red Dog and Pai Gow. It also established the Casino Control Commission and the Division of Gaming Enforcement whose task is to oversee the operation of gambling licensees.
Rules on Games and Their Conduct
There are no restrictions on the operating hours of authorized casinos – they can offer their services around the clock unless instructed otherwise by the regulators. Some provisions relate to specific games, their odds, and payouts. For example, slot machines at licensed premises should have an average player return of no less than 83%.
All gambling tables on the premises must contain signs that inform patrons about the minimum and maximum bet limits. Key employees and floor personnel members are prohibited from engaging in wagering within the licensed casinos. The rule extends to dealers, pit bosses, security guards, and surveillance employees.
Tipping and Gratuity Rules
Dealers have the right to accept gratuities from players at their tables. Upon receiving a tip, they should immediately deposit it within designated lockboxes so that pooled gratuities can later be distributed among all dealers based on their working hours. The Casino Control Act only allows exceptions to this rule for dealers at certain poker tables.
Gambling on credit is strictly disallowed in Atlantic City casinos. Traveler’s checks can be accepted by casino cashiers provided that certain conditions are met. Patrons who seek to gamble with amounts exceeding $10,000 within a single day must undergo obligatory identity verification. The same goes for customers who want to redeem chips for cash in excess of this amount. If the patron is a foreign national, they must provide a passport as proof of identity.
Sanctions for Violations of the Casino Control Act
All business entities and persons who provide unlicensed gaming services are committing a fourth-degree crime under the provisions of the Casino Control Act. Those found guilty of this transgression must pay fines capped at a maximum of $200,000. The same applies to violators who offer casino games with invalid licenses.
It goes without saying that any form of cheating or swindling for profit is against the gambling laws of New Jersey. Attempting to reduce a losing bet is also a violation. Cheating offenses are further classified based on the amount of money involved. Cheaters who have won amounts ranging from $200 to $500 are guilty of a third-degree crime, while those who win $75,000 or more are committing a second-degree crime.
Using electronic, mechanical, or computer devices to impact the odds and gain an edge over the house also constitutes an offense. The same goes for the use of marked cards, loaded dice, and other contraptions that allow one of the parties involved in a game to obtain an unfair advantage.
Assembly Bill 2578
Legal online gaming made its way to New Jersey in February 2013 when the state legislature voted in favor of Assembly Bill 2578, signed into law by then-Governor Chris Christie. Under the legislation, licensed brick-and-mortar casinos within Atlantic City can offer gambling over the internet.
Authorized online operators can only provide such services to players aged 21 or older, who are physically located within state borders. Geolocation technology is in place to determine the whereabouts of the customers.
Sports Betting Legislation in New Jersey
New Jersey has a long and complicated history when it comes to sports betting, so let’s go back to the beginning. It all started in October 1992 with the passage of the Professional and Amateur Sports Protection Act (PASPA). Also known as the Bradley Act, the legislation effectively prohibited sports wagering on a federal level.
Exemptions from PASPA
Senate Bill 3113
Assembly Bill 4111
Exemptions from PASPA
The Act made it unlawful for governmental entities to endorse, run, or authorize betting on competitive sports that involved professional athletes. Exceptions were made only for the sports lotteries operated within the states of Montana, Oregon, and Delaware. Authorized parimutuel operators in Nevada, the country’s largest gambling hub, were also exempt from the nationwide ban.
One key provision of PASPA concerned states that had been operating regulated casino gambling for at least ten years. It gave them a one-year timeframe to introduce legislation allowing for regulated sports wagering and was obviously added with the Garden State in mind. New Jersey missed its opportunity and failed to pass a sports wagering law within the one-year window.
Senate Bill 3113
Two decades passed until Governor Chris Christie eventually approved Senate Bill 3113 that allowed legal sports wagers on select professional and collegiate events. The situation quickly turned sour as the National Collegiate Athletic Association (NCAA), along with several professional leagues, filed a joint lawsuit against the Garden State.
The following year the United States District Court judged to the advantage of the leagues, preventing the state from issuing sports wagering permits. New Jersey then took the matter to the Supreme Court (SCOTUS), which eventually overturned the PASPA legislation as unconstitutional in the Murphie vs. National Collegiate Athletic Association case.
Assembly Bill 4111
As a result, all states including New Jersey were granted the right to move forward with passing sports betting laws. New Jersey did not wait long to take advantage of PASPA’s demise. Christie’s successor, Governor Philip Murphy, approved a new piece of legislation that made sports wagering legal. The passage of Assembly Bill 4111 enabled New Jersey gambling operators and racetracks to apply for retail and remote sports betting licenses.
Governor Murphy himself made the first wager at the Monmouth Park Racetrack in June 2018. Licensed New Jersey sportsbooks can legally offer various wager types, including parlays, propositions, teasers, and straight bets on professional and collegiate games. In-play betting on events in progress is also possible.
However, the local legislation prohibits wagering on collegiate games that take place within the state. Bets on events that involve local college teams are also disallowed. Athletes are prohibited from betting on matches governed by their leagues.
Gambling Taxes in New Jersey
Licensed gambling companies operating within New Jersey are subject to taxes imposed on their gross gambling revenue (GGR). Brick-and-mortar casino operators are taxed at a rate of 8% of their GGR. The deducted funds go toward the Casino Revenue Fund. The rates increase to 15% for those who offer games of chance remotely.
The gross betting revenue of New Jersey-authorized sportsbooks incurs taxes of 8.5% imposed on retail wagers and 13% on bets made over the internet. On top of that, there is a 1.25% additional tax collected by the Casino Reinvestment Development Authority (CRDA). The latter uses the money to fund various private and public projects that aim to promote Atlantic City.
Winning players in the Garden State must also pay taxes on their gambling-related profits. A 3% income tax rate applies to the gambling winnings of both resident and non-resident gamblers. Lottery payouts in excess of $10,000 became taxable in 2009. Lottery profits ranging from $10,001 to $500,000 incur a 5% income tax, while those over $500,000 are taxed at 8%. Payees who do not present a valid Tax Identification Number (TIN) will have all profits over $10,000 taxed at 8% as well.
Social Responsibility Policies
All licensed sportsbooks and casinos in New Jersey must demonstrate consistent commitment to responsible gambling. Licensees must routinely observe for compliance with the minimum gambling age in the state. Players must be at least 21 years old to engage in casino games. Minors can access a casino as long as they do not participate in any gambling activities, consume alcohol, or stay on the gaming floor.
Underage gambling is considered a misdemeanor and as such, is subject to fines ranging from $500 to $1,000. Violators may also have their driver’s licenses suspended for half a year. Persons aged 18 or older can only participate in lotteries or pari-mutuel betting on horse races. Those under 18 can legally play amusement games where items are awarded as prizes instead of cash.
New Jersey-licensed online casinos and sportsbooks provide players with a range of responsible gambling tools, including deposit, spending, and time limits for the day, week, or month. Alternatively, they can choose to take a break from online gambling for 3 to 30 days, in which case they will be unable to access their accounts.
Self-exclusion is another viable alternative for New Jersey gamblers. Online players can self-exclude for one to five years, although lifetime exclusion is also possible. Those who gamble in brick-and-mortar venues can submit their self-exclusion applications in person.
In-person applications should contain identification photos of the excluded individuals. Problem gamblers have access to programs and hotlines offered by the New Jersey Council on Compulsive Gambling.
Last but not least, operators are required to market their services safely so that potential customers are not misled. Advertising materials related to promotions should use clear and unambiguous wording, allowing customers to fully understand the promotional terms and conditions.
New Jersey Gambling Regulators
The New Jersey Casino Control Commission has the mandate to license casino gaming venues in Atlantic City and issue permits to key members of their staff. The independent body can also review appeals and penalties imposed by the Division of Gaming Enforcement. The authority consists of three members – a commissioner, chairperson, and vice-chair.
The three are selected by the state governor and remain in position unless there is a valid cause for their removal. Under the local legislation, no more than two members of the Commission can share the same partisan affiliation, a rule that aims to ensure political balance within the licensing body.
The Division of Gaming Enforcement was founded in the late 1970s after the passage of the Casino Control Act. Its primary purpose is to guarantee the integrity of the local gambling industry and preserve the interests of the general public. Apart from this, the DGE has the responsibility of investigating, monitoring, and auditing licensed gambling businesses in New Jersey.
Conclusion
New Jersey is home to a flourishing gambling industry, both in terms of revenue and product range. Locals can legally enjoy many different landbased and remote forms of gambling, including various casino games, poker, and lotteries. The Garden State also boasts the largest regulated sports wagering market in the United States, with a betting handle of more than $1.3 billion in October 2021 alone.
The state played a key role in the gambling expansion we are witnessing across the US today as it helped overturn a decades-long federal ban on sports wagering. Its gambling industry has witnessed solid growth in recent years, a tendency that is likely to continue in the years to follow.