Since 2010, New Jersey has led the effort to expand the opportunity for legalized sports wagering through the overturning of the Professional and Amateur Sports Protection Act (PASPA) of 1992. The state’s historic victory in May 2018 in successfully challenging PASPA was only the initial step in achieving that goal. The underlying framework for operational success was established through legislation that directed the Division of Gaming Enforcement to implement regulations while also demanding excellence in performance from wagering operators.
These efforts have been a success. Entering 2020, total gaming revenue, which included brick and mortar casino gaming as well as online casino and sports wagering revenue for 2019, was $3.4 billion compared to $2.9 billion for 2018. The success of those operations also added financial benefits and new synergy to the Atlantic City casinos and horse racetracks hosting retail sports books.
And then came a sudden and unexpected event – the introduction of COVID-19, a pandemic that created new and unprecedented challenges to our entire way of life.
Both the gaming industry and its regulators rose quickly to the challenge, and adaptability was the key. Following Gov. Phil Murphy’s Executive Order No. 104, DGE worked with the casino industry to effectuate an orderly shutdown of their retail operations on March 16. And consistent with that order, DGE ensured that all needed protocols were in place for online gaming and sports wagering operators to continue conducting business safely and effectively. During the crisis, online gaming and sports wagering have remained fully operational while ensuring the integrity of operations and safety for staff.
Staff at the DGE also examined what would be offered in our New Jersey market while maintaining sufficient internal controls to allow for fairness and integrity. For example, the division was able to quickly approve wagering on overseas sporting events that were still taking place. These efforts allowed operators to offer new contests to patrons thereby enabling each to maintain operations.
In fact, the COVID-19 crisis further solidified the importance and popularity of online offerings, both for casino games and sports wagering. As monthly revenue reports have shown, more than 80 percent of sports wagering relates to wagers placed online. Internet casino gaming revenue for May 2020 was $85.9 million – a 124 percent increase compared to the same month in 2019.
Looking forward, adaptability will continue to be key as the DGE meets new challenges for the regulation of the industry.
The first challenge is to work with the industry to ensure the safe reopening of the casinos and their sports book environments in a coordinated, comprehensive and expeditious manner in accordance with the provisions announced by the governor.
The DGE is also working with an eye toward the simultaneous return of games for all four major sports leagues and the NCAA by late August and early September.
The marketplace will move from famine to feast, potentially resulting in a massive increase in sports wagering activity that will require preparation by both regulators and operators to handle the high volume of activity.
Other challenges loom as well. Among them, legal gaming jurisdictions will continue to confront the challenge posed by illegal online sports wagering applications available to U.S. customers.
Moving forward, the DGE is confident that the state is well-positioned to maintain its position as a gaming leader, and will continue to take action to ensure the integrity of the fledgling sports wagering industry.
David Rebuck is the director of the New Jersey Division of Gaming Enforcement.