New Jersey Enacts New Five-Year Sunset Period for Online Gambling

However, the decision to limit the extension to a five-year period has sparked speculation about potential motives and future developments.

Rumors are circulating, though they are purely speculative at this stage, that Craig Coughlin, the Democratic Assembly Speaker of New Jersey, may be utilizing the sunset provision as a strategic move. This move could potentially lead to an adjustment of the current relatively low tax rate of 15 percent in what stands as the third largest globally regulated online casino market.

In the lead-up to the passage of the state budget on Friday, lawmakers who remained unidentified engaged in secretive maneuvers that resulted in a drastic reduction of the proposed extension of New Jersey’s online gambling legislation. The original plan for a ten-year extension was slashed down to an unexpectedly brief two-year period, implying that legislators would need to revisit this matter as early as 2025.

During a hearing on June 27 concerning Assembly Bill 2190, the New Jersey Assembly Budget Committee swiftly approved the extension of the 2013 online gambling law in under two minutes. When Democrat Eliana Pintor Marin, the chairwoman of the committee, inquired about potential amendments to the bill, there was no response.

Among the amendments introduced was a significant reduction in the renewal period for online gambling to just two years. The details of the amendments and the identities of their sponsors were not disclosed by Marin.

The committee passed the bill with a vote of 14-1, with the sole opposing vote cast by Republican Assemblywoman Aura Dunn. Surprisingly, Democratic Assemblywoman Annette Chaparro, one of the primary backers of the original ten-year extension, voted in favor of the amended two-year extension.

A gambling lobbyist in New Jersey, who wished to remain anonymous, remarked, “You can’t amend a bill without the sponsor’s consent, so Chaparro had to know about the reduction. But we still don’t know who offered the amendment.”

The reduction from ten years to two years took the gambling industry in New Jersey by surprise, leaving many puzzled. Republican Assemblyman Don Guardian, a former mayor of Atlantic City, expressed bewilderment over the situation, stating, “We’re all trying to figure out what happened.”

Following the abrupt truncation of the online gambling law, industry advocates swiftly demanded explanations. A day later, on June 28, New Jersey Assembly Majority Leader Louis Greenwald confirmed another amendment to the online gambling extension, extending it to five years, until 2028. This revision followed the original two-year proposal.

“Some felt that ten years was excessive, and five years struck the right balance,” Greenwald explained, though he refrained from naming the individuals behind this decision. The notion of reducing the ten-year extension had not been publicly proposed until the budget committee hearing on June 27.

It remains somewhat perplexing why a sunset provision was initially included in New Jersey’s first online gambling legislation back in 2013, given the industry’s subsequent success. Ray Lesniak, a former New Jersey state senator who co-sponsored the 2013 bill with former Atlantic City Mayor James Whelan, noted, “We had to include it because, at that time, online gambling was a new concept, and its viability was uncertain.”

In light of recent events, it seems that the sunset provision has transformed into a political matter that could continue to impact New Jersey’s thriving gambling sector.

David Rebuck, the director of the state’s Division of Gaming Enforcement, widely credited for the success of online gambling in New Jersey, was not made available by the attorney general’s office to address the media regarding the extension reduction. Mark Giannantonio, the president of Resorts Casino and the Casino Association of New Jersey, also refrained from commenting on the five-year extension.

While not confirmed, reports suggest that Assembly Speaker Coughlin might consider raising the state tax rate on online gambling after the November elections. This move could potentially contribute to funding a significant property tax deduction for senior citizens in New Jersey.

The response of New Jersey’s online gaming industry to such a development, much like the events of the past week, remains shrouded in uncertainty.