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US state-authorised gaming suffers setback

Efforts to provide state legislated online gambling suffered a blow yesterday when New Jersey Gov. Chris Christie vetoed a bill that would have made his state the first in the U.S. to re-introduce online gambling. But he also suggested the state Legislature could revive the effort by asking voters to approve the measure by referendum.

The bill would have allowed New Jersey residents to place bets through websites run by casino companies in Atlantic City, the only place gambling is allowed in New Jersey under the state constitution. State legislatures across the country have started work on similar bills in a bid to generate revenue.

In the veto message, Christie said he had a number of “significant concerns” with the legislation. He rejected the theory that by placing servers in Atlantic City, the bill would satisfy constitutional requirements.

“In my view, the creation of a legal fiction deeming all wagers to have ‘originated’ in Atlantic City cannot overcome the clear and unambiguous language of the State Constitution,” he said in the veto.

Voters approved Atlantic City gambling in 1976, two years after rejecting statewide gambling. Christie said he worried the bill would expand gambling “in a manner that is contrary to the public’s sentiment” to gambling.

The governor said the bill didn’t prevent gambling from popping up in Internet cafes, nightclubs and bars — against the public’s will to keep betting within Atlantic City limits. He  also objected to revenue from the bill going to support the state’s ailing horse-racing industry. Christie is trying to get the industry off state subsidies.

Lawmakers supporting the bill said they were confident they could tweak the proposal to get it in shape for the governor’s signature. “I know we’re going to be able to get it done,” said state Sen. Raymond Lesniak, a Union County Democrat.

Supporters said it was important to get moving before other states got their infrastructure up and running.

“We need to be in the forefront simply because it’s going to be the wave of the future,” said state Assemblyman John Amodeo, a Republican from Atlantic County. “If it went nationally and internationally, we could make a lot.”

The bill would have allowed Atlantic City casinos to operate gambling websites in partnership with software providers. It was strongly backed by the Interactive Media Entertainment & Gaming Association, a group that includes some of the offshore companies currently operating online gambling sites available in the U.S.

These software companies hope to become key suppliers to Atlantic City casinos for software and other expertise, said Joe Brennan, the executive director of IMEGA.

“This is a setback in that it slows it down,” Brennan said. “But all indications we have is the governor wants this, but it’s that he wants it done right.”

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