New Jersey boasts a thriving gambling industry with strictly regulated casino gaming, lotteries, sports betting, poker, 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 an extensive legacy here as New Jersey is largely 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 landbased casinos.
The first legal online casinos arrived in 2013 but it was not until the summer of 2018 that the first legal sportsbooks opened doors to residents. New Jersey’s historical 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.
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.
Casino Gambling Legislation in New Jersey
Gambling in all its forms was theoretically illegal between 1894 and 1939, although enforcement of the prohibition was sporadic and largely ineffective. State legislature reintroduced legal on-course wagering on horse races in the late 1930s. The first attempts to bring regulated casino gambling to New Jersey were made three or so decades later but proved unsuccessful at first.
Sports Betting Legislation in New Jersey
New Jersey has a long and complicated history when it comes to sports betting, so let’s go back to the beginning. It all started in October 1992 with the passage of the Professional and Amateur Sports Protection Act (PASPA). Also known as the Bradley Act, the legislation effectively prohibited sports wagering on a federal level.
Gambling Licenses in New Jersey
Landbased casinos can operate only within the territory of Atlantic City on condition they hold valid operating permits. The Division of Gaming Enforcement (DGE) has the responsibility to investigate all license applications. The watchdog reports its findings to the Casino Control Commission, which in turn decides whether to approve or turn down the candidates.
The applicants must prove their integrity and financial suitability through tax returns, bank references, and business accounting records, among other documents. Another requirement is for the applicants to have a clean criminal record. Individuals convicted of criminal offenses cannot seek gambling licenses in the state. This 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 to the amount of $100,000 or more when submitting their applications. Approved applicants must pay license issuance fees of at least $200,000. The exact sum varies depending on how much investigating the respective applicant had cost. Additional license fees of $500 are in place for each slot machine operated by the approved candidates.
3Licenses for Essential Casino Employees
The Casino Control Commission has the authority to grant permits for key casino employees like shift and pit bosses, managers, marketing directors, and cashier supervisors, to name a few. All in all, the requirement extends to all individuals who have the capacity to make important decisions at their own discretion.
Non-management members of the casino personnel do not need individual licenses but must still register with the DGE. Registration is necessary for the security staff, dealers, and cashiers, among others. Staff members with non-gaming-related positions do not require such permits.
4Sports Betting Licenses
The DGE is also responsible for the issuance of permits to casino operators who seek to offer legal in-person, online, and mobile sports betting services. A sports wagering license costs $100,000 upon issuance. Operators who want to run landbased sports lounges must meet the minimum square footage criteria of at least 2,500 ft2.
Licensees are expected to maintain a sports pool database with information about each bet they take, including the time, amount, and type of the wager. The maximum single wager patrons can risk at New Jersey-licensed sportsbooks is capped at $5 million.
One interesting aspect about New Jersey licenses is that they lack expiration dates. Rather than renewing them, eligible operators must resubmit their documents every five years to prove they still operate in compliance with the original licensure requirements.
Gambling Taxes in New Jersey
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 rates increase to 15% for those who offer games of chance remotely.
The gross betting revenue of New Jersey-authorized sportsbooks incurs taxes of 8.5% imposed on retail wagers and 13% on bets made over the internet. On top of that, there is a 1.25% additional 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 the gambling winnings of 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.
Social Responsibility Policies
All licensed sportsbooks and casinos in New Jersey must demonstrate consistent commitment to responsible gambling. Licensees must routinely observe for compliance with the minimum gambling age in the state. Players must be at least 21 years old to engage in casino games. Minors can access a casino as long as they do not participate in any gambling activities, consume alcohol, or stay on the gaming floor.
Underage gambling is considered 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 half a year. Persons aged 18 or older can only participate 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, they can choose to take a break from online gambling for 3 to 30 days, in which case 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 contain 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 safely 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
The New Jersey Casino Control Commission has the mandate 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, chairperson, and vice-chair.
The three are selected by the state governor and remain in position unless there is a valid cause for their removal. Under the 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. Apart from this, the DGE has the responsibility of investigating, monitoring, and auditing licensed gambling businesses in New Jersey.
New Jersey is home to a flourishing gambling industry, both in terms of revenue and product range. Locals can legally enjoy many different landbased 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 we are witnessing across the US today as it helped overturn a decades-long federal ban on sports wagering. Its gambling industry has witnessed solid growth in recent years, a tendency that is likely to continue in the years to follow.