Off Shore Gaming Association

We have been getting bombarded ever since New Jersey Governor Chris Christie signed an online gambling bill into law for residents and visitors to the Garden State. Everyone wants to know what this all means and when can they start betting online. The belief in New Jersey is that an online wager takes places where the wager is accepted, so most of the answers revolve around the Jersey Shore gambling mecca. Below we answer some of the frequently asked questions regarding the New Jersey online betting law.

Q: The top question has been “When?”, as in “When can I start betting legally online in New Jersey?”

A: Not for some time. Some analysts have said that it will take 18 months to 2 years  to get online gambling up to its full potential. However, there are revenue figures in the budget that starts in July and some operators, like Poker Stars should be able to get ready very quickly. However, there need to be rules and regulations in place, vendors found and tests run. Look for online gambling in some form this year, but limited and not until after the summer tourist season ends.

Q: “Do I need to live in New Jersey or can I just just play in New Jersey?”

A: Players need to be physically located within the borders of New Jersey to play online. In addition,as it stands right now, players will have to physically go to Atlantic City to  open accounts.

Q: “What games are there going to be?”

A: The law is written so that anything offered at brick and mortar casinos in AC is allowed to be offered online. This includes casino games, as well as poker.

Its companion question is usually, “Can I bet on sports online in NJ?”

The answer is No. You can’t bet on sports, yet, in casinos or racetracks in the state, so you cannot bet sports online either.

Q: “So now I am allowed to play online with a place in Costa Rica or England, right?”

A: Again, No. NJ residents are only allowed to play at casinos based in Atlantic City.

Keep in mind that many of the smaller operational questions have yet to be figured out by lawmakers and the industry. There is speculation that accounts will be able to be funded with ACH payments, debit cards and credit cards, but these have not been clearly outlined yet. Nor have any limits, initial games or registration information been given. From what we have been able to tell, they don’t even know how much a license is going to cost yet! So clearly, this is a HUGE victory in a state with 9 million residents, but online gambling will take some time to unfold in New Jersey.

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In light of the Department of Justice (DoJ) ruling last December stating that only online sports betting is illegal, Illinios took their lottery sales online at the end of March. It was instantly successful. This week the Delaware House passed a bill to bring Internet gambling to “The First State”. “The Delaware Gaming Competitiveness Act of 2012” plans to offer Internet lottery games to the public. Obviously meant to expand and grow their gaming industry, Delaware also included in the bill the ability to operate their sports lottery at venues other than the tracks that currently offer them, such as bars or convenience stores.

There have been talks in Illinois about bringing poker online next. Card Player magazine reported that “an amendment to an existing bill was filed on Tuesday” to provide for a Division of Internet Gaming within the Illinois Lottery. The story went on to say that Illinois could have poker “operational” in 7 to 10 months. Card Player also reported that West Virginia and Rhode Island might be potential partners for Delaware if online poker is introduced.

But what really is on the horizon in Delaware is NFL football parlay cards online. Let’s face it it’s the one competitive advantage that Delaware has in the regional gambling market right now. For 20 weeks of the year, they can offer betting.. Yes, it is a watered-down version with just teasers and parlays of at least 3 teams, but it is the only place east of Nevada, where a bet on football can be placed legally. It only makes sense, that once the Lottery goes online, parlay and teaser cards will be right behind. In fact, the timing of introducing the Lottery could not be more perfect. Once the technology is in place, tested and tweaked and re-tested again, it will be football season. Touchdown!!

The bill still has to be signed by the governor but while this may be just another baby step, we are already seeing a race to see who can get poker up first. Nevada has begun a licensing endeavor and New Jersey, Illinois and California all are ringing the poker bell, trying to be first. Well, the First State can make another first for itself. “The first state to have football betting online.” While the lawyers and lobbyists put on their helmets and shoulder pads we wish the best of luck to them.

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This past week saw the passing of the first anniversary of Black Friday. That was April 15, 2011, the day that the US finally got serious about eliminating the competition. Black Friday was the day that the U.S. Department of Justice, FBI and Homeland Security got together to the American public from the evils of online gambling. The domains of the poker companies that garnered over 90% of the U.S. online poker market were confiscated by the FBI on a warrant issued by the U.S. District Court for the Southern District of New York. Unfortunately, their method of grabbing the .com domain names caused two of the largest online poker companies in the world to shut down, essentially stiffing tens of thousands of players. Until players finally got something out of the defunct BETonSPORTS company, we heard annually from players and message boards throughout the gambling community were flooded with messages regarding the event. But poker players largely remained silent on the 1st anniversary of online pokers’ darkest day.

A survey of over 8000 poker players run by USGamingSurvey.com showed that after Black Friday over 80% of current online poker players stopped playing online poker. Those that remain do play at smaller sites and companies like Bovada and BetOnline have done a good job of grabbing some market share. But there are no sites that come even close to the player levels when that the Big 3 achieved when they were offering games to U.S. players. Consequently, online poker play in the US has been reduced to a trickle of what it once was.

We fully expected to see a great deal of news coverage regarding the anniversary of Black Friday. After all, with so many people stiffed out of money and so many players who used poker as a means to earn a living, we incorrectly assumed that players would be up in arms. $150 million in American players’ money is still frozen in accounts on Full Tilt Poker – plus millions more in accounts on Ultimate Bet and Absolute Poker. Instead Black Friday passed without as much as whimper. There were no player demands or further lawsuits, no marches on the Capital and literally no coverage in the mainstream media. There was plenty of coverage in 2011 with the media blaring the DoJ statement that Full Tilt Poker was nothing more than a ‘ponzi scheme’, but online poke is now so limited in the U.S. that there was nary a peep regarding Black Friday on the Internet, print or TV, outside of several online gambling industry sites.

The one group that did get very involved with the anniversary was the Poker Players Alliance. The PPA had put up a new homepage for their website and asked players to get involved. Because of their campaign over 10,000 letters were sent to members of Congress. Though this is just a small percentage of poker players who are being stiffed by the US DoJ actions, 10,000 is a figure that should make someone stand up and take notice.

While licensed and regulated online poker in the post-Black Friday world appears to be a given, it still hasn’t happened. Online poker does make the news but the stories are of states looking to license, regulate and tax the industry or the fight over long shot bills in Congress. No one mentions the bilked players and the effects of the DoJ’s rampant actions against foreign companies.

Meanwhile at one year and counting the over 200,000 Full Tilt players who never received their funds after Black Friday sit and wait, apparently, quietly. And those that played at the Cereus network sites, Ultimate Bet and Absolute Poker, should just stop waiting. They will never see s dime not before next year’s anniversary, not ever. It would be nice if someone in the media took notice.

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“Internet Gambling: Is there a fair bet?”   was the topic of a Congressional Hearing today in Washington. The House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trades hearing took two and half hours to consider changing the federal ban on internet gambling. In the end, it looks like some yes votes are present in the Subcomittee but we are still very far from anything resembling a consensus on the subject  . . . or a change in the current laws.

Near the very top of the hearing Joe Barton (R-TX) who is the author of the Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2011 (H.R. 2366), showed a piece of paper that was a screenshot of a recent signup at Bodog.  Later it was revealed by Alphonse D’Amato of the Poker Players Alliance that this signup was that of former PPA director John Pappas.  This display was the start of an attack on current online operators.  Rep. Gregg Harper (R-MS) pointedly asked the panel of experts if any of them received money from current offshore operators – apparently the PPA and National Council on Problem Gambling do. The experts did agree when asked if operators who are currently breaking the law by taking bets from Americans should ever be allowed to continue by becoming licensed. With the exception of a bit of dancing by the PPA’s D’Amato who brought the question saying that they (current online operators) are not all ‘violating’ current laws, all experts answered “No”.

Much of the testimony and hearing circled around two issues: underage gambling and the fairness of the games. Apparently some elected officials do not think that age verification can be done on the Internet. Knowing your customer was a topic at the GIGSE conference back as early as 2004 and all of the EU operators employ this type of technology. In addition, had these officials ever played online they would realize that they may be able to open an account and use a credit card to sign up and deposit, but without proper ID, they won’t be able to withdraw. I think that would be a pretty big deterrent for any underage gambler.

This hearing was really about Internet poker, though occasionally casino games and sportsbetting came up. The word “Bot” was thrown around so much it was annoying and puzzling at the same time. But many of the Representatives have done their homework and understand today, more than any of the other hearings I have watched, the game, how it works on the Internet and the pitfalls of online poker.

Ms. Bono Mack (R-CA) was the chairman for the hearing and she ended by making two things “clear.” “First we are going to be very thorough in examining a wide range of issues related to Internet gambling before coming to any conclusions and secondly at the end of the day we are going to do what is best for American consumers.” Though the issue of whether or not Internet gambling in any form is legalized in the U.S does appear to be gaining favor in these economically stressed times, today’s events would lead anyone to believe legalization is still over, not on, the horizon.

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When the FBI shut down the .com domain names for PokerStars, Full Tilt and Cereus there was hope by many that it would be the end to the prosecutions. While those 3 were by far and away the largest U.S. facing poker sites there were others that were taking U.S. action. In particular the Merge, Everleaf and Cake networks were still welcoming U.S. accounts plus a few independents like Bodog, Betonline and World Poker Exchange were encouraging new U.S. signups.

It appears, however, that there is still a chance all U.S. facing sites are in trouble. Following the seizures, Merge announced that they would no longer be offering the rakebacks they promised and numerous sites on their network like Carbon Poker and BetUSA moved to a .ag extension in anticipation of the FBI using VeriSign to take the .com domain name. And recently a source in the poker industry that still receives payments for poker advertising informed me that he’s heard numerous rumblings that the FBI “wants the rest” and consequently he is trying to lure more European sites for advertisements in anticipation of the inevitable closure of the other sites.

There were also suggestions last month on numerous poker sites that the DoJ were preparing to seize the funds of Merge and Everleaf payment processors and in fact Merge stopped accepting funds from U.S. players for 4 months after Black Friday. On October 13th Merge started accepting U.S. funds again but according to Subject Poker asked they were asked by Merge to keep that announcement silent and they barred the states of Kentucky, Louisiana, Maryland, Missouri, New York, and Washington as well as residents of Washington D.C. This may be an indication that Merge found a new payment processor they believe is untouchable but it could also be a decision to get as much money as possible into the site before the FBI makes its move. Cake poker, the largest of the U.S. facing networks has not been named at all in any rumors of seizures but it should be remembered that one of their biggest associates, The Greek Poker, stopped accepting U.S. clients which could be a reason the FBI is not currently that interested in them.

What is also notable is that Fairplay USA, a quasi lobbying group seeded by Caesars and MGM recently acquired Tom Ridge and Louis Freeh as members. Ridge, of course, was the secretary of homeland security under George W. Bush and Louis Freeh was the director of the FBI. Many are painting their involvement as a positive step for the online poker industry since both were firmly against online gambling expansion in the past. Thus some are suggesting that their new pro gambling stance along with their clout will help them encourage others in government and the FBI to stop their vendetta against online poker sites. But one must remember that Caesars has made it clear that they want a federal online gambling law but they have also pushed for the elimination of “illegal” sites. And almost everyone in the industry agrees that Caesars was instrumental in the FBI’s moves on Black Friday. It’s quite conceivable therefore that Freeh’s involvement while appearing to be “friendly” to the online poker industry is in reality just a source to gather information to help the FBI “get the rest.”

In any case Americans just need to be aware that the FBI is likely not finished with their prosecutions and players should thus be cautious and smart when making payments to any poker site. Furthermore, they should not believe comments coming from ‘Free Play USA’. The group may indeed be good for the online poker industry, but more than likely their goal is to just give Caesars an online poker monopoly for a few years and then allow other U.S. based sites to come aboard too.

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New Jersey citizens will have the opportunity to weigh in on a referendum that will appear on the November ballot asking voters whether they want to amend New Jersey’s constitution by legalizing sports betting in the state.

A recent poll by Fairleigh Dickinson University found that 53% of New Jersey voters support allowing legal sports betting at Atlantic City’s casinos and at the state’s horse tracks. So the odds appear to be in favor of the measure receiving public approval. But the big hurdle will be to overturn the Federal ban on sports wagering that currently exists. Only Nevada and Delaware currently offer sports betting, with Delaware being severely limited by previous law.

But New Jersey Senator Raymond Lesniak has decided that fighting the current Federal ban is a shot worth taking. He is one of the leaders of this movement and has taken on something that we have been hearing on our phone lines and seeing in our emal box for years. “How come I can go to Las Vegas and bet on sports but I can’t do it in my state or from the comfort of my own home,” has been a consistent question to us for over 10 years. In the U.S. all states are supposed to be able to offer goods and services equally, if one state is permitted. States can simply make their own laws to prohibit or allow the activity or goods. However, sports betting is one of the only glaring exceptions.

Senator Lesniak recently told us that passage of the referendum will, “send a strong message to Congress and the courts that they can’t play favorites and allow sports betting in Nevada and deny it to the State of New Jersey.”

Overturning the federal ban on sports betting is a bit of a longshot; the state will most likely have to bring suit against the Fed to get the right to offer this service to their citizens. This is a bet, that if it wins, will be huge not just for New Jersey, but also for sports bettors everywhere. This bold move by New Jersey will force the Fed to allow gambling on sports in all 50 states. States can then make their own decisions.

However, if all of this comes to fruition, New Jersey will be the first. Senator Lesniak added, “Sports betting will be a huge boost to our casinos, racetracks and tourism.” The added tax revenue was one of the reasons this was originally looked at and an overturn will certainly give a boost to the ailing Atlantic City casino industry. Sports bettors in the East will be able to travel to New Jersey and wager legally, collect on the spot if they win, and then head back home.

We urge New Jersey citizens, active bettors and plain ‘ol folk alike to get out in November and Vote YES to the sportsbetting referendum. In fact, the movement has its own website sportsvoteyes.com. Here people can find out what the issues are, check out a sample ballot and even register to vote.

Players in New Jersey are obviously encouraged to get out and vote. But anyone who plays and has a relative or friend in New Jersey should contact them and ask them to get out and Vote Yes too! After all, it not just about the betting, it is also about what is right. And, it’s about time that a solid longshot pays off.

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