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New Jersey Governor Chris Christie signed A2578 into law on February 26, 2013. It legalized online poker and casino sites in New Jersey. The bill had broad support in both chambers of the New Jersey Legislature. It passed the Senate 35-1 and the Assembly 68-5.
NJ online gambling was projected to generate about $500 million a year in revenue. Those numbers were off by several multiples. New Jersey online casinos and poker generate about $10 million per month, according to reports released by the Division of Gaming Enforcement.
New Jersey taxes online gambling revenue at a rate of 15%. This is nearly double the 8% tax rate imposed on Atlantic City’s gross gaming revenue. Atlantic City casinos are also required to reinvest 1.25% of their brick and mortar and internet gaming revenue into capital projects to create jobs and benefit Atlantic City.
All gaming servers must be located in Atlantic City. Online casino action is available to anyone that is physically located in New Jersey at the time of play. There is no residency requirement. Visitors are welcome to play.
Online action officially launched on November 26, 2013. There was a 5-day test period that started on November 21, 2013.
The only companies that are allowed to operate online gambling in New Jersey are the Atlantic City casino owners. All operators have an interactive gaming license.
Atlantic Club and Revel decided not to get into the online gaming business. Both casinos fell into bankruptcy and were forced to cease operations in 2014.
Atlantic City has fallen on hard times. The State hoped that online gambling would help its ailing casino industry. NJ fell to number three in the U.S. in terms of gaming revenue for the first time in 2012. Pennsylvania, where many former Atlantic City customers were based, overtook the number two spot that year.
Atlantic City casino revenue has fallen every year since 2006. It is down nearly 50% from its peak. Even worse for Atlantic City, it has not found a way to substantially improve its nongaming revenue to offset these losses.
One advantage Atlantic City has over Nevada and Delaware, the only other states to legalize online gambling, is that it has large population bases at its borders. Players in Philadelphia and New York City are a short drive across the river away from playing online poker or casino games.