Exclusive Interview: NJ’s Top Gaming Regulator Predicts Flood Of Online Sports Betting Soon

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It’s been more than two months since New Jersey legalized sports betting – both online and at state casinos and racetracks – and the NFL regular season is only two weeks away.

Yet so far, there are only two such legal online/mobile sites – the DraftKings offering in partnership with Resorts Casino and Borgata-licensed playMGM.

Is that all there is? Not at all, the state’s chief regulator, Division of Gaming Enforcement Director David Rebuck, told NJ Online Gambling this week in a wide-ranging interview at his office in Atlantic City.

Several operators are locked and loaded

“Our lab has gotten seven applications for internet [sports betting]sites, and three have been approved,” Rebuck said. “So two are waiting to launch, based on them making business judgments and figuring out marketing plans. As far as I’m concerned, they can go ahead.”

Rebuck wouldn’t divulge the approvals, but FanDuel’s operation of the Meadowlands Racetrack sportsbook and its red-hot rivalry with DraftKings makes it a good bet as one of them. The other was clearly playMGM, which just entered a soft launch phase on Wednesday, post interview.

“As for the four still in the lab, I expect some of those to be approved by the end of the month, too,” Rebuck said. “With any luck, we’ll have a good amount of competition on the mobile side of the house before Sept. 1. And I expect more applications to come in soon. A lot of these [casino]properties are being very deliberate and measured.”

Rebuck said that some of the gaming partners with a new stake in New Jersey have online sports betting up and running in Nevada.

“I have a distinct impression that they don’t want to copy what they have in the U.S. today in Nevada,” Rebuck said. “They’re looking more to build and expand on what they offer in other countries elsewhere.”

The state Legislature passed a new sports betting law in June that allows for up to three online brands, or “skins,” at each of 14 sites – the nine Atlantic City casinos, the three racetracks, and the former sites of Atlantic City Race Course and Garden State Park in Cherry Hill.

So far, six casinos and two current racetracks offer sports betting, giving them an option to go online as well. Rebuck said the other six have yet to apply:

  • Freehold Raceway: “I have no idea,” Rebuck said. A track official told NJ Online Gambling last month that the track would have sports betting sometime during the football season. But both track operators – Greenwood Racing and Penn National – have strong ties to Pennsylvania, which has legalized sports betting but yet to approve any site.
  • Garden State Park: A lawsuit recently was filed against Freehold operator Greenwood Racing by the owner of the land (Cherry Hill Towne Center Partners LLC.) where a sportsbook could be placed. GS Park Racing, also owned by Greenwood Racing, possesses a permanent veto option on any gambling taking place on the overall site.
  • Atlantic City Race Course (actually located in Hamilton): Rebuck said he is not aware of any sports betting interest there.
  • Caesars Casino: Rebuck said that since parent company Caesars Entertainment already has opened sportsbooks at sister casinos Harrah’s and Bally’s Wild West, it may not see a need to have a third sportsbook in Atlantic City.
  • Hard Rock: CEO Jim Allen said at the casino’s opening on June 28 that it would offer sports betting at some point, and soon thereafter Hard Rock signed a partnership with British firm Bet365 to run the sportsbook. There is a complication because of restrictions within Hard Rock’s stadium naming rights deal with the Miami Dolphins, however. Hard Rock’s central Boardwalk location means that in the short run, its casino guests would be able to make just a short walk to place a bet elsewhere.
  • Tropicana: The casino has been quiet, but Eldorado’s purchase of the casino from billionaire Carl Icahn in April means sports betting is likely, and that finalizing all sorts of regulatory approvals from the purchase likely is at the forefront of the operator’s mind at the moment.

NJ gambling sites can find you

Rebuck showed me what essentially is a “war room” portion of the office with multiple large screens that track minute-by-minute updates of the revenues for each online gambling site, attempts by hackers to cause e-havoc, and a fascinating geolocation map.

David Reduck, NJ’s chief regulator, eyes geolocation map that precisely detects if would-be online gamblers are really within NJ’s boundaries.

“Let me click here,” Rebuck said of a red dot in eastern Pennsylvania. “He’s trying to get on with an Android device, but he’s outside the boundary. Now here’s a Jersey one, there’s something going on there. He’s on an iPhone, but he is blocked right now because somehow he is not being found in New Jersey.”

In that case, it appeared that a wifi signal had dropped out for the moment in that rural section of northwest New Jersey. But another “block” – there were seven overall on the map at that moment, out of hundreds of attempts – looked to be in southern New Jersey, dozens of miles from a state border.

“He’s on a desktop, using Microsoft Windows 7, and there is no coordinate provided,” Rebuck said. “That means that on his computer, he’s got some sort of ‘spoofing device’ that is hiding where he is.”

Rebuck said the protocol there would be for a customer service representative to contact the would-be customer, asking them to disable the ‘spoof’ to enable sports betting on that computer. Those who play the DraftKings Sportsbook must login each time, wait for a geolocation approval, and then log on again if they are inactive for too long, similar to online banking requirements.

If it sounds like Rebuck and his Division have been at this for years, they have been. Only New Jersey and tiny Delaware offer online casino gaming beyond Nevada’s poker, and both are five years into those operations.

“The lessons that we learned from nine months taken to implement casino gaming taught us an awful lot,” Rebuck said. “We had problems we didn’t anticipate, but we kept them small. We had a challenge with geolocation – we were too tight. We were worried about geolocation issues getting us shut down by the feds, so at one point we probably had 50 percent of people getting blocked who were in New Jersey. We had growing pains for 3-6 months, and then we had it structured right.”

What’s next on the menu of sports betting in NJ?

“As far as marketing, because of technology these days, creative opportunities are unlimited,” Rebuck said. “You may see some crazy events being offered. If someone said, ‘How about a huge ‘Survivor’ football pool, well, they can do it. Imagine March Madness, everyone puts in 20 bucks. You might get a half-million players on that.”

Anything that won’t get approved?

“We have approved sports that are high-level, but we’re not going too far down yet,” Rebuck said. “We want to come out of the box knowing how it works. We approved darts because it’s on a higher level. But I’m not doing Bulgarian handball or Indian 4th-division cricket. Tennis – a lot of very suspicious things happen at a lower level. The industry is upset with us because they want to have essentially 24-7 gambling on sports, and the only way to get that is with a wide variety of time zones.”

How about betting on non-sports events, such as The Academy Awards? Supporters in the Nevada legislature hope to win that battle next year – but will they beat New Jersey to the punch? Rebuck did not rule out the possibility, even mentioning the annual Miss America pageant that takes place in Atlantic City.

Age 18 for horse racing, but 21 for sports betting?

A visitor to the Meadowlands Racetrack, age 18-to-20, can bet all they like on the races. But if he or she wanders over to the FanDuel Sportsbook within the track – no dice.

Rebuck said that horse racing regulations on age limits dating back to the 1950s were at a time when the “age of majority” was 18. Once the state raised the drinking age to 21 a few years after Resorts became Atlantic City’s first casino 40 years ago, the minimum age to bet was 21, making less complicated life for a casino operator who didn’t want to have to allow players 18-to-20 to gamble, yet make sure they couldn’t have a drink during play.

Online casino gaming, like sports betting, also follows the age 21 minimum. Rebuck admitted it was “strange” that the state lets you buy a lottery ticket, go off to war, or get married at age 18, but not participate in others forms of, well, gambling.

Meanwhile, Rebuck said the state faces some “disadvantage” because some racinos in New York such as Empire City at Yonkers Raceway and Resorts World at Aqueduct allow for betting on slot machines, for example, at age 18.

Sleeper sport for NJ sports betting

Rebuck said that he was “stunned” to find out from Australian gaming officials interested in New Jersey that the NBA provides the top total handle for any U.S. sport. That has made him wonder about the upside in New Jersey.

“The NBA is very good at marketing their product, we know that,” Rebuck said.

Rebuck also is curious about the “in-play” feature now in effect – which means ever-evolving odds on a sport as the score changes.

“Does it take off, or does it flunk because the U.S. market isn’t ready for it?” Rebuck asked. “I don’t know. But we are a different market here – you can’t just flip the switch and say, ‘Well, this works in the United Kingdom, this works in France, so it will work here in this northeast corner of the U.S.'”

Follow the leader – NJ?

Rebuck is quite blunt about New Jersey becoming a sports betting blueprint for others to follow.

“We’re onto something here, and with so many new issues coming at us every day, we want to be a leader in the U.S. on all the issues,” Rebuck said. “We’re not going to sit back and wait.”

One innovation is that those interested in betting on sports in New Jersey can lay the groundwork even before they visit.

“If you’re coming from Pennsylvania or other states, you can register and fund your account, then when you come here, you play,” Rebuck said. “If a resident from Philadelphia signs up for a DraftKings (sports betting) account, he can put money into it. If he tries to bet on an Eagles game there, it’s not going to work. But if he is visiting Aunt Susie in Collingswood (in southern NJ), he can definitely put money on the Eagles.”

The marriage of brick-and-mortar casinos and online casino gaming

“I keep telling our proprties here to see online gaming as an insurance policy, and I think they have accepted this,” Rebuck said. “If we have a bad weekend for weather, I can guarantee you that the online revenue for gambling is going up. Have a beautiful weekend for weather and everybody is down here? That’s good for brick-and-mortar property.”

Sports betting rollout sluggish?

“I believe that sports betting is rolling out slower in New Jersey and nationally than I would have thought,” said Rebuck. “Part of the reason is, it’s not that they don’t want to do it, it’s just they don’t know if it’s additive, if it will cannibalize other gambling – nobody knows. And in a corporate America structure, we don’t want to make a mistake. Our shareholders might be unhappy, we might hurt ourselves.”

By late July, Rebuck publicly cracked the whip on lagging would-be sports operators – mainly casinos – who he said were in jeopardy of not gaining approval by football season.

“Maybe it’s me, but I have been a little frustrated, so I have been definitely aggressive in going after some operators as to what their plans are,” Rebuck said. “We’re in better shape now, but I would have thought there would already be more skins with more operators.”

But Rebuck praised daily fantasy sports operator DraftKings, first out of the gate on online sports betting, and Monmouth Park,first with Borgata for on-site sports betting. The Meadowlands Racetrack and FanDuel, meanwhile opened their sportsbook in mid-July, avoiding Rebuck’s frustrations.

“The fantasy sports guys are aggressive – and good,” Rebuck said.

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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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