Political Lessons From New Jersey E-gaming Veto
By James Rutherford
Passing the Internet gambling buck to the state’ voters as he did in his veto earlier this month of Senate Bill 490 was a sage move on New Jersey Gov. Chris Christie’ part. Disappointing though it was for Web gambling advocates, its lessons should prove valuable as they look for other ways, in other places, to navigate a daunting American political landscape.

To say the sector lobbies under a legal and social cloud is putting it mildly, and what this means, among other things, is that bringing off even an intrastate-only regulatory success will take more than legislative approbation. The political sell has to be about jobs preservation and sorely needed tax revenue for busted state treasuries. It has to be about protecting recession-battered land-based casinos, in other words. It’ these entrenched commercial and tribal businesses that enjoy the requisite popular support for the thousands of people they employ, the millions in goods and services they purchase and the convenient entertainment outlet they provide, and they’re the ones that need to be convinced that online gambling will work to their benefit above all else. 

For Christie and his advisors, this is one of the key areas where S490 fell short.
“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,” Joe Corbo, then-president of the Casino Association of New Jersey, wrote last June to one of the bill’ sponsors in the General Assembly. 
And if that wasn’t enough, it should have been apparent by July that the plan advancing in the Legislature was in trouble when a blue-ribbon panel called the Governor’ Advisory Commission on New Jersey Gaming, Sports and Entertainment dismissed it in its final report, saying: “Given the current state of federal laws in these areas the State should not expend resources pursuing these currently prohibited options.”
The Casino Association’ similar preference for a federal solution first; or at the least something definitive to present to the feds by way of a statement of popular will, such as a constitutional mandate, also reflects the view championed by Caesars Entertainment, the company that owns four of Atlantic City’ 11 casinos, generates about 44 percent of the market’ win and is by far its biggest taxpayer. 
Among U.S. operators Caesars also has been the most aggressive in marketing its online brands outside the United States while simultaneously pushing on the domestic front for a workable regulatory model at the federal level. Caesars’ influence in Trenton on issues of importance to the industry would be expected to be at least as considerable as in its home base of Nevada, and, according to sources, the company opposed S490 and lobbied the Governor’ Office against it. Management spoke publicly only after the governor rendered S490 history. 
“We were concerned the bill would not survive judicial scrutiny under the state’s Constitution unless it was approved by the voters,” said Jan Jones, senior vice president of governmental relations. “We would be supportive of a referendum. But we still feel a federal solution makes the most rational sense.”
Christie said basically the same thing in his March 3 veto message to the Senate. Moreover, in proclaiming the language of the state Constitution “clear and unambiguous” in its provisions restricting casino-style gambling to the geographic boundaries of Atlantic City he implicitly endorsed the position of the U.S. Justice Department that online gambling takes place where the bet is placed, not where it is accepted (a “legal fiction,” he called the latter). 
This is precisely the opposite of the European industry’ view. It points up the fact that that the states are not unmindful of the DOJ’ antipathy to the sector and its long prosecutorial reach.
As for the chances of amending the Constitution, it’ not beyond the realm of possibility, but the odds are long. It would take public hearings and the assent of three-fifths of both the Senate and Assembly (24 senators, 48 representatives) to get the question on the ballot for Election Day on November 8 and it would have to happen with members of both houses up for re-election, primary season just around the corner and a July 1 deadline looming to finalize a state budget. 
And if that vote were held today, it likely would lose.
In a recent telephone poll of 801 registered voters conducted by New Jersey-based Fairleigh Dickinson University, 67 percent said they oppose allowing casinos to offer their wares online. Sixty-two percent of men opposed it, 71 percent of women, Democrats, Republicans and independents all opposing it by margins of up 2 to 1.