What is the legal definition of gambling?
“Gambling” means staking or risking something of value upon the outcome of a contest of chance or a future contingent event not under the actor’s control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome. N.J.S.A. 2C:37-1(b).
What legislation applies to gambling? Please provide a summary of the legal/regulatory framework.
Both online (iGaming) and land-based casino gaming, which includes poker, are governed by the New Jersey Casino Control Act (N.J.S.A. 15:12-1 to -233) and the regulations promulgated thereunder. The regulations are located within the New Jersey Administrative Code, Sections 13:69 to 13:69P and 19K:40A to 19K:43A.
Online and land-based sports wagering is governed by the New Jersey Casino Control Act sections 15:12A-1 to 19. Sports wagering is included in the aforementioned regulations promulgated pursuant to the Casino Control Act.
Pari-mutuel, fixed odds and exchange wagering on horseracing at brick and mortar facilities and at off-track betting (“OTB”) facilities, and online via account wagering is governed by N.J.S.A. 5:5-22 to 206 and through regulations within the New Jersey Administrative Code at Title 13, Chapters 70, 71, 72, 73, 74, 74A, 74B and 74C.
The New Jersey Lottery is the only legal lottery in the state and is governed by N.J.S.A. 5:9-1 to 25 and the regulations promulgated thereunder as set forth in N.J.A.C. Title 17, Chapter 20-1.1 to 12.23.
Bingo is governed by the Bingos and Raffles Law (N.J.S.A. 5:8-1 to 77) and Games of Chance are governed by (N.J.S.A. 5:8-78 to 130) The administrative regulations governing both are within the N.J.A.C. Title 13, Chapters 3 and 47. Certain online bingo games have been classified as casino games by the New Jersey Division of Gaming Enforcement and are permitted to be offered by licensees authorized to offer iGaming in New Jersey.
Which body/ies regulate gambling?
iGaming, and sports wagering are regulated by the New Jersey Division of Gaming Enforcement (“DGE”). Land-based casino gaming is regulated by both the DGE and the New Jersey Casino Control Commission. Horse racing is regulated by the New Jersey Racing Commission. The New Jersey Division of Consumer Affairs – Legalized Games of Chance Control Commission regulates bingo and games of chance, and New Jersey Division of State Lottery regulates the state lottery.
Are licences available? If so: a) What is the duration of a licence? b) What types of licences are available? c) Are there different types of licences for B2C and B2B operators? d) Do software suppliers need to be licensed?
Yes, there are licenses available.
Casino licenses and Casino Service Industry Enterprise (“CSIE”) licensees and related qualifications are valid for 5 years.
Non-gaming vendor registrations are effective upon issuance and remain valid indefinitely until unless revoked or suspended.
Internet Gaming Permits are valid for one year.
Sports Wagering Licenses are valid for 5 years.
Lottery Courier Services Permits are valid for 1 year.
Lottery Sales Agent License shall remain in full force and effect until the license is suspended or revoked or until written resignation from the agent. Licenses are renewed on a biennial basis.
Pursuant to the Casino Control Act, to own or operate a casino, an applicant requires a casino license and must fall under one of the following categories 1) the owner of a casino or under contract to purchase or construct a casino hotel; 2) have a written agreement with a casino licensee or an eligible applicant for a casino license for management of a casino; 3) any other person who has control over either an approved casino hotel, the land thereunder or the operation of a casino; or 4) an internet gaming affiliate of an owner or operator of a licensed casino.
For iGaming, a land-based casino must hold an Internet Gaming Permit. Online/mobile iGaming operators must have a market access agreement with a land-based casino, and must obtain a CSIE license.
Retail sports wagering may be offered by licensed casinos and racetracks holding a Sports Wagering License. Online/mobile sports wagering operators must have a market access agreement with a land-based casino or racetrack, and must obtain a CSIE license.
For pari-mutuel wagering, a racetrack must possess a permit to conduct a horse race meeting, and an OTB must possess a license issued by the New Jersey Racing Commission. A license is also required for the conduct of account and exchange wagering. A limited number of permits to conduct a race meeting are available by statute. Only seven total may be issued (three thoroughbred and four harness). Only 15 OTB licenses are authorized and by statute are only issued to the New Jersey Sports & Exposition Authority (Authority), horsemen’s organizations and one “well-suited entity.” One account wagering and one exchange wagering license are available and by regulation they belong the Authority. With the prior approval of the Racing Commission, for OTBs, account wagering and exchange wagering, the licensee may enter into an agreement with a person or entity to operate such on its behalf.
The New Jersey Division of State Lottery is the only entity permitted to conduct a lottery in the state. To sell Lottery tickets, a Lottery Sales Agent must possess a license issued by the Division of State Lottery. Third parties may also operate an online/mobile lottery courier service upon obtaining a Lottery Courier Service Permit issued by the Division of State Lottery.
Every organization interested in conducting charitable bingo must obtain a registration certificate from the Legalized Games of Chance Control Commission. Once registered, the organization must file a license application with the appropriate municipality where the games are to be held.
Yes, see subsection b. supra regarding casino licenses and internet gaming permits versus CSIE licenses.
Yes. They will require a CSIE or Ancillary CSIE license depending on the type of software supplied.
Are any types of gambling products prohibited?
Any unauthorized gambling is prohibited.
What is the headline application procedure? Please include any eligibility and other application requirements, including approximate application costs and any need to establish a local presence.
The structure and process of the licensing regime is generally the same for each type of license and each regulatory authority.
With respect to a license to conduct casino gambling, sports wagering, pari-mutuel wagering, and lottery courier services, a license application and disclosures for associated entities and individuals must be filed with the relevant regulatory authority.
The following persons are required to qualify as part of the application for a casino license: persons listed in Section 4(b) supra as eligible to own or operate a casino; all financial backers and holders of debt which bear relation to the casino operation or premises who hold 25% or more of such financial instruments or debt; each officer and director of a corporate applicant; each person who directly or indirectly holds any beneficial interest or ownership of the securities issued by such applicant; anyone who has the ability to control the applicant or to elect a majority of the board of directors of such applicant; and each holding, intermediary or subsidiary company of an applicant for a casino license.
Each holding, intermediary and subsidiary company of an applicant is required to establish the qualification of: corporate officers; directors; persons who directly or indirectly hold a beneficial interest or ownership of 5% or more; any person who has the ability to control or elect a majority of the board of directors; and any other person considered appropriate for qualification. Institutional investors who have not been granted a waiver must also file.
For a CSIE license: the applicant; holding and intermediary companies; natural persons owning, directly or indirectly, 5% or more beneficial interest in the applicant, holding or intermediary company; directors of the applicant; all inside directors and outside directors on the Executive and Audit Committees of holding or intermediary companies; officers of the applicant, holding and intermediary companies; the management employee supervising the regional or local office that employs the sales representative; and each employee who will act as a sales representative or otherwise regularly engage in the solicitation of business from casino licensees. CSIE applicants must also register to do business in the state.
For horse racing, bingo and lottery, see section 4(b).
A suitability investigation will be conducted – in most cases by the Division of Gaming Enforcement – and a report will be issued recommending issuance or denial of a license. A type of “temporary license” is available in most instances. An applicant for a casino license may be eligible for Interim Casino Authorization; an applicant for a CSIE license may be eligible for a “transactional waiver,” and an applicant for a lottery courier service permit may be eligible for a temporary permit.
Upon the filing of an application for a casino license along with a non-refundable deposit of $100,000 and license fee of not less than $200,000, the Division of Gaming Enforcement conducts an investigation into the qualification of the applicant and submits a report and recommendation to the Gaming Control Commission. Thereafter, the Commission conducts a hearing on the qualification of the applicant. The Commission will then either grant or deny an application within 90 days.
For iGaming and sports wagering, an application is submitted for a permit or license, respectively, along with the following fees: not less than $400,000 for iGaming or $100,000 for sports wagering.
For a CSIE, Ancillary CSIE and Vendor licenses/registration an application is filed with a subsequent finding of qualification by the Division of Gaming Enforcement with a minimum application charge of $5,000 for a CSIE and $2,000 for an Ancillary.
No additional horse racing permits are currently being offered. For OTB, the only avenue to obtain a license is to seek the assignment of a current license by filing an application and fee of $2,500 after which the Racing Commission determines the qualification of the successor in interest. Currently, no applications for another entity to manage or operate account wagering on behalf of the licensee are being accepted. For exchange wagering, there is an option for a services agent or management agent to apply via submission of an application and $50 fee followed by a determination of qualification in order to manage or supply services to the exchange wagering licensee. To offer fixed odds wagering, racetracks and the Authority are licensed by the Division of Gaming Enforcement as a licensed wagering operator. Any other entity authorized to operate fixed odds wagering, either online or retail, shall be licensed by the Division of Gaming Enforcement as a CSIE.
The licensing fee is $20.00 for each occasion on which any game or games of bingo are to be conducted under a license.
Do individuals within the business need to be personally licensed or authorised? If so, please provide headline requirements.
See Section 6 supra.
Is advertising of gambling permitted and, if permitted, how is it regulated?
Yes, advertising is permitted. Any advertising in a casino shall contain the phrase “Bet With Your Head, Not Over It,” or comparable language. Advertising shall be based upon fact, and shall not be false, deceptive or misleading. The following practices are prohibited: advertising within a casino hotel complex which violates the state obscenity statutes or which includes certain specific prohibited content as outlined in the regulations; the failure to maintain any offer for the advertised period of availability or in a quantity sufficient to meet reasonably anticipated demand. An applicant or licensee shall also be responsible for all advertisements which are made by its agents, regardless of whether the applicant or licensee participated directly in its preparation, placement or dissemination. These standards also apply to CSIE licensees.
The message “If you or someone you know has a gambling problem and wants help, call 1-800-Gambler” shall be displayed prominently on the log on screen and a command to display this message on the log off screen shall be transmitted whenever the system detects a log off for iGaming and fixed-odds. It shall also appear on any casino or sports pool advertising as well as on a notice where bingo is conducted.
A racing permit holder may impose restrictions on advertising on jockey or driver apparel to preserve the traditions of the turf or to promote the safety of race participants.
Are marketing affiliates permitted? If so, are they licensed or regulated?
Yes, marketing affiliates are permitted. Affiliates that operate on a cost-per-acquisition basis require a vendor registration. Those who operate on a revenue share basis require an ancillary CSIE license.
What are the penalties for offering, facilitating or marketing unlawful gambling, and can the gambler be penalised for participating in unlawful gambling?
Unlawful gambling is criminally enforceable. However, it is not enforceable against the participant.
Briefly detail key requirements for licensees.
Licensure requirements for different types of gambling will vary depending the applicable enabling legislation and regulations promulgated pursuant thereto. For example:
Operators offering mobile wagering of any kind must be able to confirm that the person placing the wager is located within the state.
The New Jersey State Constitution only permits casino gambling (including sports betting) within the geographic boundaries of the City of Atlantic City. Therefore, Internet/Mobile Gaming and sports wagering may only be offered from servers physically located in Atlantic City, as the wager is deemed to be struck where the server resides, per legislation.
Operators whose servers are located outside New Jersey are prohibited from offering products to New Jersey residents and are ineligible for a local license.
iGaming and casino hardware, software, and other equipment must be located in secure casino facilities or other facilities owned thereby in Atlantic City. A racetrack sports pool or online sports pool must locate its servers at the same if not at the racetrack.
Briefly detail key anti-money laundering requirements.
The Bank Secrecy Act (BSA), 31 USC §5311 et seq. is a federal statute that applies to “financial institutions” including casinos with a gross annual gaming revenue in excess of $1 million. A Currency Transaction Report (CTR), must be filed by casinos to report each transaction in currency involving cash-in and cash-out of more than $10,000 in a gaming day. Each casino must develop and implement a written AML program. Several things must be included in the program, to include: internal controls; training of employees; independent testing for compliance; a compliance officer; procedures for verifying the identity of a person; procedures for determining suspicious transactions; and procedures for using computers to aid in assuring compliance.
Further, there are specific requirements within the New Jersey statutes and regulations regarding AML compliance. For instance, a casino licensee offering Internet Gaming shall have an internet gaming manager responsible for the operation and integrity of Internet Gaming and reviewing all reports of suspicious behavior. The internet gaming manager notifies the Division of Gaming Enforcement if they detect a person engaging in theft, embezzlement, collusion, money laundering, or any other illegal activities. An Internet Gaming system itself is required to be designed to detect and report suspicious behavior, such as money laundering, or any other illegal activities.
Sports pool and fixed-odds operators are required to file internal controls with the Division of Gaming Enforcement prior to commencing operations that include a description of anti-money laundering compliance standards including, but not limited to, filing of CTRs, Suspicious Activity Reports (SARs), and procedures for detecting structuring to avoid reporting requirements.
Briefly detail key responsible gambling (or safer gambling) requirements.
The Racing Commission maintains a self-exclusion list that applies to racetracks, OTBs, fixed-odds, account and exchange wagering. The Division of Gaming Enforcement maintains the same for casinos, mobile sports wagering, and internet gaming. A person may request placement on the self- exclusion list and during the period of voluntary exclusion, the person may not collect winnings or recover losses resulting from wagering. Operators are responsible to cross-reference the self-exclusion lists before permitting a wager or bet to be placed.
Briefly detail shareholder reporting and approval threshold(s).
See section 6 supra.
Briefly detail the regulator’s enforcement powers, including sanctions.
The primary enforcement mechanism is the imposition of regulatory sanctions, including monetary fines and penalties, license restrictions or revocation, and a finding of unsuitability or bar from re-applying for a license. The primary enforcement authority is the Division of Gaming Enforcement in most cases. In rare instances, criminal enforcement is possible.
What is the tax rate?
The Casino Control Act imposes an 8% annual tax on casino gross revenue. Sports pool gross revenue is taxed annually at 8.5% plus an additional 1.25%. Online sports pool operations are subject to a 13% annual tax on gross revenue plus an additional 1.25%. The annual tax in Internet Gaming gross revenues is 15% plus an investment alternative tax of 2.5%.
For horse racing, the distribution of money withheld from winnings varies depending on the method of wagering (pari-mutuel, fixed odds, exchange), type of racing (thoroughbred or harness), the type of wager, the location where the wager is placed, and the location of the race being wagered on.
Are there any proposals for changing gambling laws and regulations in the next 12-24 months? If so, please provide an overview of the proposed changes and likely timing.
N/A
What key regulatory developments are proposed or on the horizon in the next 12-24 months?
N/A
Do you foresee any imminent risks to the growth of the gambling market in your jurisdiction?
N/A
If a gambling start-up was looking for a jurisdiction in which to commence its activities, why would it choose yours?
New Jersey is an established gaming jurisdiction with many opportunities for market entry. Though strictly regulated, there are licenses available to conduct multiple forms of gaming in the state.
United States - New Jersey: Gambling Law
This country-specific Q&A provides an overview of Gambling laws and regulations applicable in United States – New Jersey.
What is the legal definition of gambling?
What legislation applies to gambling? Please provide a summary of the legal/regulatory framework.
Which body/ies regulate gambling?
Are licences available? If so: a) What is the duration of a licence? b) What types of licences are available? c) Are there different types of licences for B2C and B2B operators? d) Do software suppliers need to be licensed?
Are any types of gambling products prohibited?
What is the headline application procedure? Please include any eligibility and other application requirements, including approximate application costs and any need to establish a local presence.
Do individuals within the business need to be personally licensed or authorised? If so, please provide headline requirements.
Is advertising of gambling permitted and, if permitted, how is it regulated?
Are marketing affiliates permitted? If so, are they licensed or regulated?
What are the penalties for offering, facilitating or marketing unlawful gambling, and can the gambler be penalised for participating in unlawful gambling?
Briefly detail key requirements for licensees.
Briefly detail key anti-money laundering requirements.
Briefly detail key responsible gambling (or safer gambling) requirements.
Briefly detail shareholder reporting and approval threshold(s).
Briefly detail the regulator’s enforcement powers, including sanctions.
What is the tax rate?
Are there any proposals for changing gambling laws and regulations in the next 12-24 months? If so, please provide an overview of the proposed changes and likely timing.
What key regulatory developments are proposed or on the horizon in the next 12-24 months?
Do you foresee any imminent risks to the growth of the gambling market in your jurisdiction?
If a gambling start-up was looking for a jurisdiction in which to commence its activities, why would it choose yours?