What You Need To Know About The Key Elements Of The NJ Sports Betting Law

Written By Steve Ruddock on June 13, 2018

New Jersey became the second state to legalize sports betting following the US Supreme Court ruling that overturned PASPA.

There was never any doubt New Jersey would go this route, but Gov. Phil Murphy made it official when he added his signature to the NJ sports betting bill that breezed through the state Legislature last week. The bill, A 4111, passed without a single no vote in either chamber.

But what exactly did Murphy sign into law?

Here’s a comprehensive breakdown of the key components of the bill.

How soon is now?

Now that the law has been passed, New Jersey is wasting no time in joining Nevada and Delaware (which beat New Jersey to the punch by a week) as a legal sports betting state.

Land-based sportsbooks are expected to begin opening on Thursday.

This news was followed with Borgata Atlantic City announcing it would take bets shortly after Monmouth Park’s ceremonial first bet.

Online and mobile products will have to wait a little longer, as there’s a 30-day moratorium on online wagering in the legislation.

“This act shall take effect immediately, except that provisions allowing online or Internet sports wagering shall take effect 30 days thereafter.”

How many sportsbooks are we talking about?

Per the law, each eligible entity (nine casinos, with Hard Rock Atlantic City and Ocean Resort Casino, and four racetracks) can operate up to three sports betting brands.

At full capacity, that works out to 39 sportsbooks, which might be overkill for the New Jersey market.

More likely, each facility will have one or maybe two physical sportsbooks and 1-3 online skins.

DGE gets the final call on interstate wagering agreements

New Jersey’s legislation doesn’t have a whole lot of concern when it comes to the 1961 Wire Act.

The new law has a provision that will leave it up to the state Division of Gaming Enforcement to determine if New Jersey is capable of entering into interstate wagering partnerships.

“Notwithstanding any other provision… wagers may be accepted thereunder or pooled with wagers from persons who are not physically present in this state if the division determines that such wagering is not inconsistent with federal law or the law of the jurisdiction, including any foreign nation, in which any such person is located, or such wagering is conducted pursuant to a reciprocal agreement to which the State is a party that is not inconsistent with federal law.”

Money, money, money

New Jersey chose to go with a bifurcated tax rate for land-based and online sports wagering.

The land-based sports betting tax rate is set at 8.5 percent of revenue. The rate jumps to 13 percent for online and mobile wagering.

As is the case with online gaming, casinos will pay an additional 2.5 percent tax on online wagers — 15.5 percent total — as part of the state’s Alternative Reinvestment Tax that is used to promote tourism in Atlantic City.

Tracks are required to pay an additional 1.25 percent of revenue from internet and mobile wagers — 14.25 percent total — to the Alternative Reinvestment Tax fund.

And of course, all legal US sports bets are subject to a federal excise tax of 0.25 percent of handle.

Several no-betting zones

Not surprisingly, licensed books won’t be allowed to take wagers on high school sporting events, not that they were likely to anyway.

College games held in the state of New Jersey, or games that involve a New Jersey college are also prohibited.

Additionally, the law prohibits esports betting.

There’s also a specific exclusion that will apply to just one casino, Golden Nugget. The casino is owned by Houston Rockets owner Tilman Fertitta. As such, it cannot take wagers on any NBA games. That’s several steps beyond the company’s self-imposed policy in Nevada, where Rockets games and wagers are off the board at Golden Nugget.

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What’s not in the bill

New Jersey thumbed its nose at the professional sports leagues demands for an integrity fee.

Not surprisingly, there is no provision for an integrity fee in the law.

Thus far, none of the states that have passed legislation legalizing sports betting have included an integrity fee. And it’s a growing list:

  • Nevada
  • Delaware
  • New Jersey
  • West Virginia
  • Mississippi
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Steve Ruddock

Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.

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