Life & Style

Can New York learn from New Jersey’s approach to online gambling?

In 2018 – the most recent year with available data – the global gambling market reached revenues of just over $450 billion. Almost 20% of that figure came from right here, in the United States of America.

For the better part of a century, gambling has been synonymous with America. Heck! The centre of the global gambling world, Las Vegas, is situated on these very shores.

Why then, in 2020, is it illegal for someone in New York City or Rochester to gamble online, when resident of New Jersey can do just that, free from the prying eyes of the law? This is just one of the many questions that highlights America’s fraught, confusing and quite often hypercritical relationship with gambling.

In this article we shall cast our eyes southwards to analyse whether New York state would be wise to follow New Jersey in legalising online gambling.

Online gambling in New York

“The law is mostly common sense with knobs on”, said one British judge, however at times the law can be slightly more ambiguous, which is certainly the case when it comes to New York’s gambling laws.

Online gambling is not explicitly outlawed by New York state law, although the criminal code does say, “any device, machine or paraphernalia which is used or usable in the playing phases of any gambling activity is illegal unless specifically stated otherwise.”

Therefore, by the spirit of the law online gambling is technically illegal in New York. Whereas players across the Stateline can freely access an NJ online casino, residents of New York cannot gamble with a licensed NY online casino.

That said, hundreds of thousands of people do still regularly wager online in New York state as prosecutions and fines for doing so are extremely rare. As there are no homegrown online providers, these players wager mainly with offshore companies who are immune to New York state laws.

Each year millions of potential tax dollars are swallowed up by foreign online gambling companies. Money that could be put to good use right here in New York if gambling laws were to be loosened.

In recent years there has been growing support amongst senators and lawmakers do just that. On January 9, 2019 Senator Joseph Addabbo, Jr sponsored the Senate Bill 18 which looked to legalise online poker in the state.

That endeavour, like similar efforts before it was ultimately unsuccessful, but there does appear to be growing evidence of support for legalisation in New York. But what would the benefits of legalisation in New York be? To answer that question, let’s look at the impact that it has had on New Jersey.

New Jersey’s Gambling Goldmine

In December 2019, a series of publications released a number of stats and figures that showed the impact of widespread legalisation on the Garden State’s gambling economy. The most recent year of figures showed a total gambling revenue of $4.58 billion in New Jersey.

That figure, which is nearly a third of the UK’s total gross gambling yield, was up on the previous year and significantly boosted the state’s tax coffers. The UK is a clear example of how lucrative gambling can be in terms of tax collected for a state/country. Residents of the UK are free enjoy online poker completely legally, while the government also profits.

Whilst millions of dollars where still being spent in land-based casinos throughout Atlantic City, the biggest rise in revenues came from the online sector. Over 50% of all bets placed in the state where done so either via cell phone or laptop.

The popularity of online gambling in New Jersey has also led to a huge increase in the number of homegrown companies operating in the state. This has boosted productivity and helped to address worrying unemployment figures.

In short, New Jersey is thriving thanks to the legalisation of online gambling. The Garden State’s next move is to fully legalise online sports betting. Research indicates that more than 9 in 10 sports bets are placed online in New Jersey.

If sports betting were to join online casino gambling in being legalised, then the total gambling revenues of the state would increase as would the state’s tax reserves.

Should New York follow New Jersey’s example?

There will always be persuasive arguments against the legalisation of gambling, many of which are hard to ignore. However, it seems to many observers that New York and indeed the United States are striking the wrong balance.

For anti-gambling arguments to hold any weight, surely it makes sense to outlaw all forms of gambling throughout the country. Patently, this is something that will not happen, which begs the question, why is online gambling any worse than land-based gambling?

To understand why some, have that view, it is prudent to look at who the most vocal critics of online gambling are. Sheldon Adelson, a long-time backer of the Republican party is the perhaps the most vociferous campaigner against online gambling in the country.

That is the same Sheldon Adelson who made his fortune through the revenues generated at his many Las Vegas casinos. Online gambling would endanger his future profits, so it is only natural that he is against legislation.

For those without vested interests, the best option seems to be further legalisation of the industry. Online gambling is here to stay, and it makes sense to license and regulate it in New York rather than leaving the market to foreign companies and foregoing potential tax revenues.

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