New Jersey Gambling Regulation

Gambling Regulation New Jersey boasts a thriving gambling industry with strictly regulated casino gaming, lotteries, sports betting, poker, and on-course and off-course horse race wagering. Various forms of online gambling are also legal and available to residents across the Garden State. Only Nevada can match New Jersey in terms of gambling opportunities.

Betting activities have a long legacy here, and New Jersey is widely considered one of the states with a more permissive attitude toward gambling. Gambling expanded outside Nevada in the mid-1970s after New Jersey residents voted in a referendum to approve the legalization of land-based casinos.

The first legal online casinos arrived in 2013, but it was not until the summer of 2018 that the first legal sportsbooks opened their doors to residents. New Jersey’s historic SCOTUS victory ended the federal ban on sports wagering and led to a massive betting expansion throughout the US. More importantly, it allowed for state-sanctioned sports betting, and New Jersey was among the first states to take advantage of this opportunity.

New Jersey has established itself as the country’s second-largest gambling hub, and only Nevada surpasses it in terms of proceeds. With a gross gaming revenue in excess of $2.9 billion as of 2020, the gambling industry in the Garden State shows no signs of slowing down anytime soon.

Gambling in all its forms was technically illegal between 1894 and 1939, although enforcement of the prohibition was sporadic and largely ineffective. The state legislature reintroduced legal on-course wagering on horse races in the late 1930s. About three decades later, the first attempts to introduce regulated casino gambling in New Jersey began but were initially unsuccessful.

Casino Control Act of 1977

Legal Casino Games

Rules on Games and Their Conduct

Tipping and Gratuity Rules

Sanctions for Violations of the Casino Control Act

Assembly Bill 2578

Casino Control Act of 1977

Residents endorsed legal gaming in a 1976 referendum. Many believed that legalization would boost the local economy and accelerate the revitalization of Atlantic City, whose popularity as a resort town had declined after World War II. Consequently, Governor Brendan Byrne signed the New Jersey Casino Control Act in early June 1977, permitting regulated gaming exclusively within Atlantic City.

Legal Casino Games

The legislation restricts gambling to large resorts and hospitality complexes that hold the necessary licenses. The law outlines the authorized gambling games licensed resorts can offer, including slots, baccarat, craps, roulette, blackjack, sic bo, and various forms of casino-banked poker such as Red Dog and Pai Gow. It also established the Casino Control Commission and the Division of Gaming Enforcement, whose task is to oversee the operations of gambling licensees.

Rules on Games and Their Conduct

There are no restrictions on the operating hours of authorized casinos; they may operate around the clock unless regulators instruct otherwise. Some provisions address specific games, their odds, and payouts. For example, slot machines at licensed premises must have an average player return of at least 83%.

All gambling tables on the premises must display signs that inform patrons of the minimum and maximum bet limits. Key employees and floor personnel are prohibited from wagering within licensed casinos. This rule extends to dealers, pit bosses, security guards, and surveillance staff.

Tipping and Gratuity Rules

Dealers may accept gratuities from players at their tables. After receiving a tip, they must immediately deposit it into designated lockboxes so that pooled gratuities can later be distributed among all dealers according to their working hours. The Casino Control Act permits exceptions to this rule only for dealers at certain poker tables.

Gambling on credit is strictly prohibited in Atlantic City casinos. Cashiers may accept traveler’s checks if specific conditions are met. Patrons who wish to gamble more than $10,000 in a single day must undergo mandatory identity verification. The same requirement applies to customers who redeem chips for cash in excess of this amount. If the patron is a foreign national, a passport is required as proof of identity.

Sanctions for Violations of the Casino Control Act

All business entities and individuals who provide unlicensed gaming services commit a fourth-degree crime under the Casino Control Act. Offenders face fines of up to $200,000. The same penalties apply to those who offer casino games with invalid licenses.

Any form of cheating or swindling for profit violates New Jersey gambling laws. Attempting to reduce a losing bet is also prohibited. Cheating offenses are classified according to the amount of money involved. Offenders who win between $200 and $500 are guilty of a third-degree crime, while those who win $75,000 or more commit a second-degree crime.

Using electronic, mechanical, or computer devices to influence the odds and gain an edge over the house is likewise illegal. The same prohibition covers marked cards, loaded dice, and other contraptions that give any party an unfair advantage.

Assembly Bill 2578

Legal online gaming arrived in New Jersey in February 2013 when the state legislature approved Assembly Bill 2578, which was signed into law by then-Governor Chris Christie. The legislation allows licensed brick-and-mortar casinos in Atlantic City to offer gambling over the internet.

Authorized online operators may provide services only to players aged 21 or older who are physically located within state borders. Geolocation technology verifies each customer’s whereabouts.

New Jersey has a long and complicated history with sports betting, so let’s start at the beginning. In October 1992, Congress passed the Professional and Amateur Sports Protection Act (PASPA). Also known as the Bradley Act, the law effectively prohibited sports wagering at the federal level.

Exemptions from PASPA

Senate Bill 3113

Assembly Bill 4111

Exemptions from PASPA

The Act made it unlawful for governmental entities to endorse, run, or authorize betting on competitive sports involving professional athletes. Exceptions applied only to the sports lotteries operated in the states of Montana, Oregon, and Delaware. Authorized parimutuel operators in Nevada, the nation’s largest gambling hub, were also exempt from the nationwide ban.

A key provision of PASPA addressed states that had offered regulated casino gambling for at least ten years. It gave them a one-year window to enact legislation permitting regulated sports wagering, a clause clearly aimed at the Garden State. New Jersey missed that window and failed to pass a sports wagering law in time.

Senate Bill 3113

Nearly two decades later, Governor Chris Christie approved Senate Bill 3113, which permitted legal sports wagers on select professional and collegiate events. The situation quickly soured when the National Collegiate Athletic Association (NCAA), along with several professional leagues, filed a joint lawsuit against the Garden State.

The following year, the United States District Court ruled in favor of the leagues, preventing the state from issuing sports wagering permits. New Jersey then took the matter to the Supreme Court (SCOTUS), which ultimately deemed PASPA unconstitutional in the Murphy v. National Collegiate Athletic Association decision.

Assembly Bill 4111

As a result, all states, including New Jersey, gained the right to pass sports betting laws. New Jersey wasted no time in capitalizing on PASPA’s demise. Christie’s successor, Governor Philip Murphy, approved new legislation that legalized sports wagering. The passage of Assembly Bill 4111 allowed New Jersey gambling operators and racetracks to apply for retail and online sports betting licenses.

Governor Murphy personally placed the first wager at Monmouth Park Racetrack in June 2018. Licensed New Jersey sportsbooks may offer various wager types, including parlays, propositions, teasers, and straight bets on professional and collegiate games. In-play betting on events in progress is also permitted.

However, state law prohibits wagering on collegiate games that take place within New Jersey. Bets on events involving local college teams are likewise disallowed. Athletes are barred from betting on matches governed by their leagues.

1Overall

Land-based casinos may operate only within Atlantic City, provided they hold valid operating permits. The Division of Gaming Enforcement (DGE) is responsible for investigating all license applications. The watchdog then reports its findings to the Casino Control Commission, which decides whether to approve or reject the candidates.

Applicants must demonstrate their integrity and financial suitability by providing tax returns, bank references, and business accounting records, among other documents. They must also have a clean criminal record. Individuals convicted of criminal offenses cannot obtain gambling licenses in the state. This restriction includes convictions for gambling-related offenses under the Casino Control Act, such as cheating or swindling.

2License Issuance Fees for Casinos

All candidates must make a non-refundable deposit of $100,000 or more when submitting their applications. Approved applicants must pay license issuance fees of at least $200,000. The exact amount varies depending on how much the investigation of the applicant has cost. Additional license fees of $500 apply to each slot machine operated by approved candidates.

3Licenses for Essential Casino Employees

The Casino Control Commission has the authority to grant permits to key casino employees, including shift and pit bosses, managers, marketing directors, and cashier supervisors, among others. Overall, the requirement extends to every individual who can make important decisions at their own discretion.

Non-management casino personnel do not need individual licenses, but they must still register with the DGE. Registration is required for security staff, dealers, and cashiers, among others. Staff members in non-gaming-related positions do not need such permits.

4Sports Betting Licenses

The DGE is also responsible for issuing permits to casino operators that wish to offer legal in-person, online, and mobile sports betting services. A sports wagering license costs $100,000 upon issuance. Operators that want to run land-based sports lounges must meet a minimum floor space requirement of 2,500 ft2.

Licensees must maintain a sports pool database containing information about every bet they accept, including the time, amount, and type of wager. The maximum single wager patrons can place at New Jersey-licensed sportsbooks is capped at $5 million.

New Jersey licenses are unique because they do not expire. Instead of renewing, eligible operators must resubmit their documents every five years to prove they still comply with the original licensure requirements.

Gambling Taxes in New Jersey

Taxes Licensed gambling companies operating within New Jersey are subject to taxes imposed on their gross gambling revenue (GGR). Brick-and-mortar casino operators are taxed at a rate of 8% of their GGR. The deducted funds go toward the Casino Revenue Fund. The rate increases to 15% for operators that offer games of chance remotely.

The gross betting revenue of New Jersey-authorized sportsbooks is subject to taxes of 8.5% on retail wagers and 13% on bets placed over the internet. On top of that, there is an additional 1.25% tax collected by the Casino Reinvestment Development Authority (CRDA). The latter uses the money to fund various private and public projects that aim to promote Atlantic City.

Winning players in the Garden State must also pay taxes on their gambling-related profits. A 3% income tax rate applies to gambling winnings for both resident and non-resident gamblers. Lottery payouts in excess of $10,000 became taxable in 2009. Lottery profits ranging from $10,001 to $500,000 incur a 5% income tax, while those over $500,000 are taxed at 8%. Payees who do not present a valid Tax Identification Number (TIN) will have all profits over $10,000 taxed at 8% as well.

All licensed sportsbooks and casinos in New Jersey must demonstrate a consistent commitment to responsible gambling. Licensees must routinely monitor compliance with the state’s minimum gambling age. Players must be at least 21 years old to engage in casino games. Minors may enter a casino as long as they do not participate in any gambling activities, consume alcohol, or stay on the gaming floor.

Underage gambling is a misdemeanor and, as such, is subject to fines ranging from $500 to $1,000. Violators may also have their driver’s licenses suspended for six months. Persons aged 18 or older can participate only in lotteries or pari-mutuel betting on horse races. Those under 18 can legally play amusement games where items are awarded as prizes instead of cash.

New Jersey-licensed online casinos and sportsbooks provide players with a range of responsible gambling tools, including deposit, spending, and time limits for the day, week, or month. Alternatively, players can choose to take a break from online gambling for 3 to 30 days, during which they will be unable to access their accounts.

Self-exclusion is another viable alternative for New Jersey gamblers. Online players can self-exclude for one to five years, although lifetime exclusion is also possible. Those who gamble in brick-and-mortar venues can submit their self-exclusion applications in person.

In-person applications should include identification photos of the excluded individuals. Problem gamblers have access to programs and hotlines offered by the New Jersey Council on Compulsive Gambling.

Last but not least, operators are required to market their services responsibly so that potential customers are not misled. Advertising materials related to promotions should use clear and unambiguous wording, allowing customers to fully understand the promotional terms and conditions.

New Jersey Gambling Regulators

Regulator The New Jersey Casino Control Commission is mandated to license casino gaming venues in Atlantic City and issue permits to key members of their staff. The independent body can also review appeals and penalties imposed by the Division of Gaming Enforcement. The authority consists of three members: a commissioner, a chairperson, and a vice-chair.

The three are appointed by the state governor and remain in position unless there is valid cause for their removal. Under local legislation, no more than two members of the Commission can share the same partisan affiliation, a rule that aims to ensure political balance within the licensing body.

The Division of Gaming Enforcement was founded in the late 1970s after the passage of the Casino Control Act. Its primary purpose is to guarantee the integrity of the local gambling industry and preserve the interests of the general public. In addition, the DGE is responsible for investigating, monitoring, and auditing licensed gambling businesses in New Jersey.

Conclusion

Conclusion New Jersey is home to a flourishing gambling industry, both in terms of revenue and product range. Locals can legally enjoy many different land-based and remote forms of gambling, including various casino games, poker, and lotteries. The Garden State also boasts the largest regulated sports wagering market in the United States, with a betting handle of more than $1.3 billion in October 2021 alone.

The state played a key role in the gambling expansion the US is witnessing today, as it helped overturn a decades-long federal ban on sports wagering. Its gambling industry has experienced solid growth in recent years, a trend that is likely to continue in the years ahead.