Christie vetoes I-gaming but says he'll sign if conditions met

Mike McKiski, sales manager with Bally Technologies, shows off an I-gaming platform in Las Vegas. Backers see big benefits for Atlantic City.
Mike McKiski, sales manager with Bally Technologies, shows off an I-gaming platform in Las Vegas. Backers see big benefits for Atlantic City. (SUZETTE PARMLEY / Staff)
Posted: February 09, 2013

New Jersey stands poised to join Nevada and Delaware as the only states offering online wagering. Gov. Christie on Thursday vetoed a closely watched Internet gambling bill but gave assurances that he would sign it into law if his conditions were met.

The governor clearly softened his position on the issue, stating in a 31-page conditional-veto letter to the bill's key sponsors that he was willing to support I-gaming legislation if the activity were limited to a 10-year trial period, subject to an annual review; more resources were earmarked to treat gambling addiction; and the current proposed tax on gross online-gaming revenue were boosted to 15 percent from 10 percent, among other changes.

Lawmakers said they expect an amended bill to become law as early as March 18.

In a statement, Christie said now was the right time for New Jersey to become "one of the first states to permit Internet gaming, but only with the right limitations and protections." Under the current legislation, patrons could gamble only from computer servers housed at the 12 Atlantic City casinos.

Those who have championed Internet gambling said it could generate hundreds of new jobs and an additional $200 million a year in revenue for the ailing Shore casinos, which have been battered by regional competition, primarily from gambling halls in Pennsylvania and New York.

Pennsylvania has I-gaming on the legislative radar, as well. State Rep. Tina Davis (D., Bucks) announced earlier this week that she plans to introduce legislation to establish guidelines and regulations that would apply to online gambling in the state.

In his veto, Christie stressed that he wanted to increase resources to treat compulsive gambling and provide sensible safeguards to ensure careful oversight of Internet wagering.

He recommended that elected state officials promptly disclose their past and present representations of entities seeking or holding Internet gaming licenses. He also wants enhanced funding for compulsive-gambling treatment programs, with the money coming from an increase in the online-licensing fee, from $150,000 to $250,000 per license.

Terry Elman, education coordinator at the Hamilton-based Council on Compulsive Gambling of New Jersey, said the group applauded Christie's attention to the problem.

"He's absolutely right in his idea to have more money for treatment, especially for young people," said Elman, who deals with adolescents, "because they already do it. With [Internet gambling] legal, it will make it 10 times worse. ... Any time you expand gambling, it always creates more problem gamblers."

Don Weinbaum, executive director of the council, added that Christie has become aware "that compulsive gambling should be viewed as an addiction. We're pleased that the governor understands that for many individuals, gambling can be as addictive as drugs and alcohol, and the consequences just as devastating."

The Republican governor vetoed an Internet gaming bill in March 2011 on concerns that the activity could not be contained to Atlantic City casinos - thus violating the state constitution, which limits gambling to the Shore resort. He said then that he feared Internet caf├ęs would sprout all over New Jersey for online gaming.

He reiterated that concern Thursday: "Our state cannot carelessly create a new generation of addicted gamers, sitting in their homes, using laptops or iPads, gambling their salaries and their futures."

Christie also recommended that Internet gaming and its societal impact should be studied and periodically revisited.

"Such a significant step must be carefully considered," Christie said, "balancing the benefits of job creation, economic development, and the continued revitalization of Atlantic City against the risks of addiction, corruption, and improper influence."

For Christie, who has spearheaded a five-year overhaul of Atlantic City that included the creation of a new tourism district there last year, supporting the I-gaming bill represents a balancing act of a different kind.

A second outright rejection of it would have dealt another blow to its struggling casino industry, which has lost more than $2 billion in gaming revenue to Pennsylvania and other states since 2006.

Thursday, the governor called his recommendations "critical, but commonsense safeguards" that took into account both sides of the equation.

Proponents of Internet gaming were elated with Thursday's development, saying New Jersey was quickly falling behind other states.

Last summer, Nevada became the first state to legalize intrastate online poker, while Delaware became the first to allow online casino gambling.

"Last [time] was an outright veto," said State Sen. Ray Lesniak (D., Union), who spent most of last year tweaking the bill Christie vetoed in 2011.

"Not much to work out," he said of Thursday's veto, "only had to overcome Christie's temerity on the issue. Atlantic City becomes relevant again. Hundreds of thousands of dollars of new revenues, retains existing jobs, and adds thousands more."

The state Assembly will take up the bill when it meets later this month, and the state Senate is expected to give final approval when it meets again March 18.

The revised legislation will then go back to Christie to sign into law.

"I'm going to analyze the conditional veto further, but as of now I expect to move forward with it and get this done as quickly as possible," said John Burzichelli (D., Gloucester), prime sponsor of the Assembly bill.

For the tiny, financially ailing Atlantic Club (formerly the A.C. Hilton), which is in the midst of being bought by Rational Group US Holdings - an online-gaming company that owns the websites PokerStars and Full Tilt Poker - Christie's support of I-gaming was critical.

The company wants to set up its U.S. headquarters and a data center in Atlantic City but said the deal to buy the casino was contingent on Internet gaming becoming legal in New Jersey.

"We are thrilled with Governor Christie's landmark decision," Michael Frawley, chief operating officer of the Atlantic Club, said Thursday. "Atlantic City's gaming industry is once again setting the precedent."


Contact Suzette Parmley

at 215-854-2855 or sparmley@phillynews.com.

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