Online Poker, Sports Betting … Is eSports Betting The Next Frontier For New Jersey?

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Both eSports and sports betting are growing exponentially all over the U.S. — but so far, mostly on parallel tracks.

A New Jersey assemblyman aims to change that with a bill he recently introduced to place eSports on a level playing field with more traditional sports betting.

“It’s clearly the next big thing, and if New Jersey gets in on it early, it can really bring in some revenue,” Democrat Ralph Caputo told NJ Online Gambling Tuesday.

“Throughout the country and the world, video game enthusiasts are flocking to see expert players compete in all kinds of digital games,” Caputo added. “Whether they follow along online or in person, hundreds of millions of people watch eSports each year, and that number is only growing.

“With online sports betting now legal in our state and a rapidly expanding eSports industry already in existence, the time is right for New Jersey to expand legal wagering beyond traditional sports.”

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Caputo also said that Atlantic City — already a destination for many eSports tournaments — could dominate that market if it is the first state on the East Coast to regularly offer betting on the tournaments as well. That would provide extra tax revenue for the state from more hotel stays and increases in food, beverage, and shopping revenue.

New Jersey was the third state in the U.S. to legalize online poker and sports betting, in both cases placing just days behind Delaware and also after Nevada.

Limits on eSports betting

The state’s current law only allows for eSports betting if the regulators at the Division of Gaming Enforcement approve a formal request. That has happened during an eSports event that took place in Paris in November. No “in-game betting” was allowed, and the maximum bet was $1,000.

Caputo’s bill allows for wagers of no more than $100 and a potential winning bet of no more than $500 unless approval is given by state regulators.

Helping Caputo is the fact that state DGE Director David Rebuck announced his support for the bill at a recent meeting of the Assembly Tourism, Gaming, and the Arts Committee.

The discussion was important, said Caputo, 79, because few if any other committee members were aware of the popularity of eSports.

As for possible opposition, Caputo said, “I haven’t heard one ‘con’ at all — not even one email.”

To head off one possible objection — concerns that eSports’ popularity among teens might tempt them to find a way to bet illegally on the contests — Caputo’s bill would ban betting on high school-sponsored eSports events or other events where a majority of the participants are under age 21.

“I have asked a state senator to sponsor this bill, but haven’t heard back yet,” said Caputo. “These things take time, but I’m going to keep pushing.”

More items on Caputo’s agenda

Caputo, who spent three decades as an Atlantic City casino executive — the only legislator with such experience — has introduced more than a dozen other gambling-related bills and continuing resolutions this year in hopes of gaining traction from his colleagues.

The longest-standing issue dates back 40 years and goes to the question of whether video lottery terminals could be installed at sites such as the Meadowlands Racetrack if the operation was run by the state lottery or if that would run afoul of Atlantic City’s statewide gambling monopoly.

Former Gov. Jim McGreevey tried to revive the idea two decades ago, but Atlantic City lobbyists and elected officials successfully pushed back against it. Caputo said he hoped that now that the AC casinos have embraced online casino gaming and sports betting all over the state, there might be a chance to revive the long-dormant proposal.

One Caputo bill would send the net revenues to the state’s horse racing industry, while another would split the money three ways among horse racing, the state education fund, and the general fund.

Other bills propose one, two, or three casinos for North Jersey — four years after a statewide referendum on two such casinos was soundly defeated in the wake of a multi-million dollar marketing campaign against the measure funded by Yonkers Raceway and Resorts Casino in Atlantic City, among others.

“We were cheated on that one,” Caputo said. “We’re not trying to kill Atlantic City, and meanwhile there’s talk of more casinos all over — Connecticut, Massachusetts, New York. Anybody can see what’s happening. Why drive all the way to Atlantic City?”

Other bills would remove the ban on sports betting on New Jersey universities; limit state lottery games to a maximum of two drawings per day; and require legislative approval of any new wrinkles in lottery games.

But Caputo said that eSports is his main focus now, “and once we take care of that, we’ll see about the rest.”

Photo by Jeff Curry / USA Today Sports

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John Brennan

John Brennan has covered NJ and NY sports business and gaming since 2002 and was a Pulitzer Prize Finalist in 2008, while reporting for The Bergen County Record.

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