Regulators Complete NJ Sports Betting Puzzle And Here’s What They Say

puzzle piece

The New Jersey Division of Gaming Enforcement put the final piece of the puzzle in place prior to tomorrow morning’s legal sports betting launch at several sites across the state.

On Wednesday, the DGE released its temporary “emergency” regulations that will govern the new NJ sports betting industry.

In addition to the regulations of the basic mechanics of sports betting — security, when and how casinos and racetracks report their sports betting revenue, and how they pay taxes to the state — the other regulations help paint a very clear picture of what legal sports betting in New Jersey will look like.

The definition of a sportsbook

The regulations require all licensees to “establish and maintain a first-class sports wagering lounge as approved by the DGE” on property.

According to the regulations, a sports wagering lounge is “a primary area of at least 1,000 square feet where a sports pool is operated within a casino or racetrack.”

“Sports wagering satellite lounge” means one or more secondary areas approved by the DGE where a sports pool is operated within a casino or racetrack.

The only exceptions to that rule are:

  • Online operations can commence for a period of nine months while a physical sports book is under construction.
  • A casino or racetrack can accept sports betting wagers for the same nine months in a temporary facility approved by the DGE.

Online sportsbook skins aren’t required to have a physical sportsbook if the casino they’re associated with has a sportsbook under a different brand.

“An internet gaming affiliate may commence online sports wagering if an associated casino has commenced operation in a sports wagering lounge except that online sports wagering may commence in a temporary sports pool facility for a period not to exceed nine months upon the approval of the Director if the lounge is under construction.”

Who can apply for and receive a sports betting license

The regulations, like the law, limit sports betting licensees to operational casinos and current and former racetracks.

“Only a casino licensed by the Casino Control Commission, or operating pursuant to interim casino authorization; a racetrack; or former racetrack shall be eligible to obtain a sports wagering license. Casino sports wagering licenses shall be issued by the Division. Initial sports wagering licenses for racetracks shall be issued by the Racing Commission. Renewals of sports wagering licenses for racetracks shall be issued by the Division.”

Licensing cost

The exact cost of a license has yet to be determined but will be no less than $100,000. The licenses are valid for one year.

Until the DGE determines the final cost of regulating sports betting, it’s requiring each casino to post a $250,000 retainer to cover any regulatory costs in the first year.

Fifty percent of the license cost will be used for problem gambling funding and research.

Unclaimed tickets

Unclaimed winning sports tickets will expire one year after the date of the event.

The sportsbook operator must pay the amount of the winning ticket with the funds distributed as follows:

  1. For wagers placed with a sports pool operated by or on behalf of a casino, the casino licensee shall retain 50 percent and remit the remaining 50 percent to the Casino Revenue Fund;
  2. For wagers placed with a sports pool operated by or on behalf of a racetrack, the racetrack licensee shall retain 50 percent and remit the remaining 50 percent to the State General Fund; and
  3. For wagers placed with a sports pool jointly operated by a casino and a racetrack, the casino and racetrack licensees shall retain a total of 50 percent which shall be apportioned among them pursuant to the terms of their operation agreement, and the remaining 50 percent shall be apportioned in the same manner, with the casino percentage being deposited in the Casino Revenue Fund and the racetrack percentage being deposited in the State General Fund.

However, the regulations go on to say that, “Nothing shall preclude a casino or racetrack licensee from, in its discretion, issuing a cash complimentary to a patron to compensate a patron for a sports pool ticket that has expired.”

Integrity monitors

The DGE seems to have covered integrity monitoring without paying the professional sports leagues one percent of handle, ie an integrity fee.

Per the regulations:

“Each sports pool operator shall, prior to commencing operations and annually thereafter, perform a system integrity and security assessment conducted by an independent professional selected by the licensee, subject to the approval of the Division.”

Among the integrity monitoring requirements:

  • Sports pool operators shall have controls in place to identify unusual betting activity and report such activity to an integrity monitoring provider.
  • All integrity monitoring providers shall share information with each other and shall disseminate all reports of unusual activity to all participating sports pool operators. All sports pool operators shall review such reports and notify the integrity monitoring provider of whether or not they have experienced similar activity.
  • If an integrity monitoring provider finds that previously reported unusual betting activity rises to the level of suspicious activity, they shall immediately notify all other integrity monitoring providers, their member sports pool operators, the Division, the appropriate sports governing authority and all other regulatory agencies as directed by the Division. All integrity monitoring providers receiving a report under this subsection shall share such report with their member sports pool operators.
  • A sports pool operator receiving a report of suspicious activity shall be permitted to suspend wagering on events related to the report, but may only cancel related wagers after Division approval.
  • Integrity monitoring providers shall provide the Division with remote access to their monitoring system which shall provide at a minimum: 1. All reports of unusual betting activity; 2. If the activity was determined to be suspicious; and 3. The actions taken by the integrity monitoring provider.
  • The Division and sports governing bodies shall be authorized to share information regarding the integrity of events conducted on a sports pool or online sports pool.
  • The Division may require a sports pool or online sports pool operator or licensee to provide any hardware necessary to the Division for evaluation of its sports pool or online sports pool offering or to conduct further monitoring of data provided by its system.
  • All information and data received pursuant to this chapter by the Division related to unusual or suspicious activity shall be considered confidential and shall not be revealed in whole or in part except upon the lawful order of a court of competent jurisdiction or, with any law enforcement entity, team, sports governing body, or regulatory agency that the Division deems appropriate.

Odds and ends for NJ sports betting

Clarifying the no betting on New Jersey college games rule

“A “prohibited sports event” does not include the other games of a collegiate sports or athletic tournament in which a New Jersey college or university team participates, nor does it include any games of a collegiate tournament that occur outside New Jersey even though some of the individual games or events are held in New Jersey.”

That’s good news for NCAA bettors, who may have been shut out if NCAA tournament games were held in New Jersey.

Sportsbooks can have slots and other casino games

 “A sports wagering lounge located in a casino may have slot machines or other authorized games with the approval of the Division. Slot machines within a sports wagering lounge shall be included in the calculation of casino floor space.”

Responsible gaming policies make an appearance

” A sports pool operator shall include signage in the sports wagering lounge that displays “If you or someone you know has a gambling problem and wants help, call 1-800 GAMBLER,” or comparable language approved by the division, which language shall include the words “gambling problem” and “call 1-800 GAMBLER.” A sports pool operator shall ensure this language is included on all print, billboard, sign, online, or broadcast advertisements of a sports pool or online sports pool.”

What’s the max bet in this place?

“The maximum wager which may be accepted by any sports pool operator from a patron on any one sports event shall be limited to $5,000,000.”

Your check is in the mail

“A patron may redeem by mail a winning wagering ticket to the address provided thereon in accordance with the wagering operator’s internal controls.”

 Layoff wagers are acceptable

“A sports pool operator may, in its discretion, accept a layoff wager from another sports pool operator. A sports pool operator placing a layoff wager shall disclose its identity to the sports pool operator accepting the wager.”

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Steve Ruddock

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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.