Atlantic City casinos oppose state bills to let them offer sports and Internet betting

By Wayne Parry, AP
Friday, June 11, 2010

NJ casinos oppose sports, Internet betting bills

ATLANTIC CITY, N.J. — Atlantic City’s 11 casinos have come out against proposed state legislation that would let them offer sports betting and give customers access to online gambling.

The Casino Association of New Jersey says the proposals would violate existing federal bans on sports and online betting. The group also says the plans would primarily benefit offshore gambling websites, not New Jersey’s casinos.

Association president Joe Corbo says the proposals would hurt the casinos by further expanding legalized gambling beyond Atlantic City and the state’s racetracks.

He wrote this week on behalf of the association to John Burzichelli, a Democratic state assemblyman who heads a committee on regulatory oversight and gaming.

“As the industry seeks to work with government to revitalize the economic engine that the Atlantic City casinos bring to the state of New Jersey, the last thing that the state needs at this time is to undermine the destination resort model by expanding gambling to other parts of the state,” Corbo wrote.

Measures being considered in the state legislature would allow the casinos to offer betting on professional sports events, and would let people in locations around the state go online to bet on Internet versions of poker, blackjack and other games.

The nation’s second-largest gambling market, Atlantic City is struggling with growing competition and a continued poor economy. On Thursday, the city’s casinos reported their May revenue fell 9 percent from a year ago, despite great weather for traveling and a fifth weekend in the month.

Essential to the casinos’ survival is the physical presence in Atlantic City of gamblers who will also spend money on hotel rooms, restaurants, spas and concert tickets.

Corbo also said the primary backer of the measures is a group called iMEGA, the Interactive Media Entertainment & Gaming Association, which represents offshore Internet betting websites, among others.

“New Jersey, which has set the gold standard for its gambling laws, should not now have its gambling laws driven by a group like iMEGA that is made up of offshore Internet gambling sites that are not permitted to accept wagers in the United States and are thumbing their nose at the United States Department of Justice,” he wrote.

Joseph Brennan Jr., iMEGA’s chairman, said its members would form partnerships with Atlantic City casinos to offer online gambling and would undergo the same rigorous licensing process casino operators face.

“We sought out New Jersey because they have the toughest gaming regulators on the planet, and they’ll probably be even tougher on anyone that wants to fill this space,” he said. A company that qualifies for a New Jersey license will be seen as squeaky-clean and more valuable to investors, he added.

Nevada casinos accept sports wagers on popular professional and college sports, as well as horse and dog racing, as allowed by Nevada gambling laws.

Regulators, however, recently warned casino operators about their business dealings with Internet gambling companies that have accepted wagers from American customers. The Nevada Gaming Control Board says it doesn’t sanction, endorse or approve any Internet casinos.

The control board told casinos in a letter posted to its website last week that it recently increased its efforts to assess specific relationships between casinos and Internet gambling companies.

Las Vegas casino operators are split on the issue — with Harrah’s Entertainment Inc. most vocally in favor of Internet gambling. The world’s largest casino company, it launched a Montreal-based subsidiary last year to focus on online gambling, and it takes online wagers from customers in the United Kingdom with hopes to expand.

Brennan said the Atlantic City casinos would directly benefit from online gambling.

“We advocated all along for the existing Atlantic City casinos to be the apex of this industry and this effort,” he said. “The revenue would flow through them. The opportunity for Internet operators is to ink partnerships with casinos, which don’t currently have the expertise, the technology or the manpower to get this business up off the ground.”

Brennan estimated that New Jersey could see 57,000 new jobs, $7 billion in annual gross gambling revenue, and up to $472 million in annual state gaming taxes if it establishes itself as the dominant hub for the online gambling industry.

None of this can happen unless a federal ban on sports betting (in all but four states) and Internet gambling is lifted. Democratic state senator Ray Lesniak is suing the Justice Department to overturn the ban.

New Jersey legislators plan to consider the sports betting and Internet gambling measures in coming weeks.

Associated Press Writer Oskar Garcia contributed reporting from Las Vegas.

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