NJ Gambling Czar Offers Lessons On His State’s Online Success

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After a month in which New Jersey online casino and mobile sports betting operators generated $82.6 million in spite of the worldwide COVID-19 pandemic — while operators in most other states collected nothing, or very close to it — the state’s top regulator resisted any temptation Friday for an “I told you so” moment.

Instead, Division of Gaming Enforcement Director David Rebuck focused for his ICE North America Digital conference online audience on what he sees as best practices for states still playing catch-up.

Rebuck pointed out that New Jersey, matched only by Delaware in this regard, has been in the legal, regulated online casino game since 2013.

“With seven years of experience, our regulations are very robust,” Rebuck said. “We haven’t sat back and waited for challengers to make the adjustments. Our controls and protections for the online side of the house are superior to what we, or anyone, has in brick-and-mortar establishments.”

Rebuck explained, for those who still think of online signup for gambling as a shaky proposition, that requirements for age, address, and Social Security number mean that online gaming sites feature more rigorous data than applying for a credit card or for an Amazon account, for example.

“Naysayers tried to say that the regulatory systems are weak,” Rebuck said. “They are not. They are stronger than retail-only.”

The perils of in-person registration

Rebuck added: “I challenge anybody to look at the system we have set up in New Jersey now, and tell me how our verification system cannot be looked at as more powerful than in-person registration. It’s impossible.

“I’ve been to those other jurisdictions, and seen how they register people [at casinos]. They grab a driver’s license and verify it, and give it back. Who’s to say that driver’s license isn’t perfect, but it’s accepted by a human? Those errors aren’t possible online. If you don’t meet the verification standards, you don’t get in.”

And while scammers exist in every environment, Rebuck said that according to information coming from data processors, “chargebacks” on such issues are lower than, for example, department store credit cards.

Rebuck also revisited a still-lingering trope even after seven years of contrary experience in New Jersey: the idea that online casino gaming damages the bottom line of brick-and-mortar operators.

“There is no cannibalization. We don’t have it,” Rebuck said. “In fact, the reverse is happening. You’re seeing new clientele, and casinos are diversifying their product offerings.”

While New Jersey, like Nevada and Delaware, stands out historically as an especially aggressive gambling state, Rebuck dismissed the notion that his state’s experience can’t be a road map for more wary state legislators.

“Does anyone believe that New Jersey or its customers are inherently different than their own clientele?” Rebuck asked. “Obviously not. Now, I love New Jersey, and we’re quirky. But we’re not different than any other states in their people’s interest in how those people want to be entertained.

“There are still dinosaurs who try to make judgments about how New Jersey is so different: ‘It borders on New York’ or ‘All their casinos are in one [Atlantic City] location.’ But there’s no facts to support it — just talking heads saying stuff about something they don’t want to support.”

Online gambling vs. brick-and-mortar

Rebuck also rejected the idea that New Jersey’s online casino revenue, which could reach $1 billion this year, could have been achieved instead by a matching boost in traditional casino revenue without the innovative additional option. He said the demographics of the mobile gambler are too far apart from the classic casino visitor to justify such a claim.

States that don’t offer legal online gambling options, Rebuck said, are consigning their gambling-minded residents to shadowy offshore sportsbooks that “are still very powerful, and good at what they do.”

There seems to be a consensus in the gaming industry that niche sports such as Russian table tennis or Belarus soccer will fade as gambling options once “real sports” return.

But Rebuck said that the lack of traditional sports shone a bright light on the fact that previously, sports bettors were mostly limited to a number of weeknight and weekend hours, when many contests were being played simultaneously.

“Operators have always struggled with the limited time of events, unlike a casino with its 24/7 options,” Rebuck said. “But as new sports have become available across multiple time zones, you’re not having as much ‘dead periods’ of time where there are such limited sports betting opportunities. So we’ll see what the amount of interest remains in these sports down the road.”

Image courtesy of Shutterstock.com

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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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