New Jersey to bolster online gambling by reassuring banks, killing competition

new-jersey-no-competitionNew Jersey is taking steps to bolster its struggling interstate online gambling market, which alarmed many onlookers by posting its first monthly revenue decline in April. The first proposal seeks to resolve the ongoing difficulties players have experienced in convincing major banks and credit cards to process transactions with New Jersey-licensed online gambling sites. The Division of Gaming Enforcement (DGE) says MasterCard has approved 73% of online gambling transactions since the market launched in November, while Visa’s rate is a dismal 44% and Amex declines all such transactions.

Speaking at the East Coast Gaming Congress (ECGC) on Tuesday, state Sen. James Whelan said he hopes to steer a new bill through the New Jersey legislature that would require all payment processors doing business with state-licensed online gambling sites to obtain a casino service industry license from the DGE. At present, processors are only required to obtain ancillary licenses, which involve significantly less anal probing by regulators. Whelan believes this higher regulatory hurdle will give big banks “a little more assurance” that the transactions they’re being asked to authorize are on the up-and-up.

The other plank of New Jersey’s plan to boost its online revenue expectations is to reduce out-of-state competition. On Monday, online gambling affiliate Gambling911 reported that the New Jersey attorney general’s office had sent letters to half a dozen other affiliates ‘requesting’ that they remove any links on their sites to online gambling operators not currently licensed by the DGE. Failure to act on this request could result in New Jersey pursuing “appropriate civil or criminal sanctions” against the affiliates.

According to G911, some of the targeted affiliates are currently authorized by the state to steer customers to New Jersey-licensed online gambling sites. DGE spokeswoman Kerry Langan told OnlinePokerReport that the appearance on these affiliates’ sites of state-licensed operators alongside internationally-licensed operators “may lend the appearance” that the state condones all their operations. G911 claimed that many longstanding affiliates might be unable to edit out offending links from archived pages. Furthermore, many affiliates serve global audiences that aren’t subject to the same US restrictions. Bottom line, these affiliates have some thinking to do.