BUSINESS

New Jersey’s GVC ruling proves ‘black’ markets are actually red, white & blue

TAGs: division of gaming enforcement, GVC Holdings, New Jersey Online Gambling

new-jersey-gvc-holdings-approvalNew Jersey gaming regulators have okayed GVC Holdings to continue operating its Bwin.party brands in the state’s regulated online gambling market.

On Monday, the UK-listed GVC announced that the New Jersey Division of Gaming Enforcement (DGE) had concluded its preliminary investigation into GVC’s suitability to continue operating Bwin.party’s NJ-facing brands following GVC’s takeover of the company.

GVC quoted the DGE saying that a study of GVC’s business operations had led investigators to conclude that “GVC and its individual qualifiers possess the requisite good character, honesty and integrity should it file for a transactional waiver” in the state.

Furthermore, the DGE determined that GVC didn’t actually need to pursue a transactional waiver to ensure the continued operation of its existing NJ-facing operations.

GVC CEO Kenny Alexander expressed delight that the DGE ‘has confirmed that GVC meets its stringent regulatory requirements.” Alexander called the ruling “an important development for GVC and one that places the enlarged Group in a strong position should further regulated opportunities in the US arise.”

PROTECTIONISM MASQUERADING AS REGULATION?
The DGE’s thumbs-up had appeared far from a given, and doubts about GVC’s ability to pass muster with the DGE were widely believed to have prompted the decision by GVC’s land-based NJ partner the Borgata Hotel Casino & Spa to ink a real-money technology deal with GAN as a possible fallback position should GVC be rejected.

The likelihood of rejection appeared to grow more likely after GVC’s February announcement that PartyPoker would be re-entering 21 grey/black markets Bwin.party had exited prior to receiving its New Jersey license, which had been widely construed as Bwin.party’s bid to clean its regulatory act while its NJ-license was being considered.

GVC’s decision to re-enter these markets was followed by the DGE’s publication of an advisory bulletin that attempted to clarify its stance on just how ‘grey’ a market could get before becoming ‘black’ and therefore a problem for a DGE licensee.

Given that many of the markets GVC re-entered take an extremely dim view of online gambling, it certainly appears the DGE’s definition of ‘black’ can more accurately be read as ‘red, white and blue.’

Case in point: while any number of international markets could qualify as black under the DGE’s definitions, the only concrete action the DGE has taken to date against its licensees for operations outside the Garden State was to prohibit NJ-licensed affiliates from having relationships with gambling sites serving customers in other US states.

Last October, the New York Times quoted a DGE spokesperson saying that the agency wouldn’t hesitate to “commence regulatory proceedings” against any NJ-licensed service provider that knowingly did business with ‘illegal’ gambling operators. Fearless prediction: when the DGE does eventually lower the boom, the ‘illegality’ will undoubtedly be linked to US-facing operations.

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