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New Jersey clarifies how dirty its online licensees can get in ‘grey’ markets

TAGs: david rebuck, division of gaming enforcement, New Jersey Online Gambling

new-jersey-online-gambling-grey-marketsNew Jersey’s gambling regulator has clarified its position on just how dirty its licensed online gambling operators are allowed to get via their dealings in legally ‘grey’ markets.

On Monday, David Rebuck, director of the New Jersey Division of Gaming Enforcement (DGE), published an advisory bulletin on the “impact of operations in grey markets on suitability re licensure,” in which the DGE attempts to clarify what level of grey market operations it will tolerate among its online gambling licensees.

Rebuck says the DGE defines ‘grey’ markets as “jurisdictions where the legality of internet gaming operations is an open question,” while ‘black’ markets are those where governments have “taken affirmative, concrete actions to actively enforce laws that prohibit online gaming, or have issued unequivocal official pronouncements that online gaming is not legal.”

The DGE maintains that operators who do business in black markets “will not be able to establish the ‘good character, honesty and integrity’ required for licensure in New Jersey.”

For operators who don’t operate in black markets but do operate where the legal situation is more opaque, the DGE says that so long as a jurisdiction has not taken affirmative, concrete actions against online operators, companies operating in these markets have nothing to fear in New Jersey.

The DGE acknowledged that determining what constitutes legal online gambling in another country can be “fraught with the likelihood of error or misinterpretation,” citing the ongoing gambling turf wars between the European Union and some of its member states. But the DGE insists it “will not adopt a standard that could erroneously substitute its own judgment for that of another sovereign jurisdiction’s executive, legislative or judicial authority.”

The DGE’s grey market self-doubt undoubtedly came up during its prolonged investigation of the suitability of Amaya Gaming’s PokerStars brand, which has extensive operations in legally sketchy markets such as Russia, a country that has made moves to authorize online sports betting but has yet to give online poker its official thumbs-up.

More recently, the DGE was forced to consider whether to permit the continued operation of Bwin.party’s New Jersey-licensed sites after the company was acquired by UK rival GVC Holdings, whose Sportingbet brand derives a good portion of its revenue from legally questionable markets.

In February, the DGE announced that the Bwin.party sites could continue to operate while the DGE considered GVC’s application for local licensing, only to have GVC announce that its PartyPoker brand – which operates in New Jersey – would be re-entering 21 markets it had exited a few years earlier, including markets like Poland, which takes a particularly dim view of online poker.

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