Gov. Chris Christie of New Jersey signed an Internet gambling bill on Friday formally calling on President Donald Trump not to ban online gambling at the federal level. Gov. Christie is a friend and political ally of President Trump.
Donald Trump has been noncommittal on the issue since he became president. He told the Associated Press in an interview during the presidential campaign that he was not taking a position on Internet gambling, because “I have a lot of friends on both sides of the issue.”
Christie: Don’t Dismantle the Investments
The legislation said that a federal ban on online gambling would be “dismantling the investments that the state and Atlantic City casinos have already made to implement and regulate Internet gaming.”
The bill Christie signed went on to say that Restore America’s Wire Act or another ban on iGaming would eliminate “economic and employment opportunities already realized” by New Jersey, while undermining the state’s ability to “generate tens of millions of dollars in tax revenue, create high-tech software jobs, and foster valuable business ventures for Atlantic City casinos.”
President Trump’s Views on Internet Gambling
The president famously was a casino owner in his previous career, as he owned three Atlantic City casinos: Trump Taj Mahal, Trump Plaza, and Trump Castle. Being a brick-and-mortar casino owner does not always make one a proponent of online gambling; Trump friend and donor Sheldon Adelson of Las Vegas Sands Corp. is all the example one needs.
Caesars Entertainment and MGM Resorts have embraced online gambling in the New Jersey market. Their online casino and poker sites have given a much-needed influx of cash to the New Jersey gaming industry, so the New Jersey State Legislature passed a bill asking the Republican president to protect the state’s domestic iGaming industry, which is 4 years old.
Lawmakers hope Christie’s signature carries some weight, because the New Jersey governor was one of the first major national GOP figures to support Trump for president. From February to November 2016, Christie was a top spokesman for the Trump campaign, leading many to believe the Garden State’s governor would receive an offer to be Trump’s vice president or attorney general.
New Jersey Online Gambling Industry
New Jersey is one of three US states which has legal, regulated online gambling. (Pennsylvania appears to be on the verge of being the fourth such state.) Online gambling launched in New Jersey in November 2013. Since that time, legal online gaming sites have won $600 million.
Last year, Atlantic City casino sites generated $196 million in winnings, which is up 32% from the previous year. For several of the casino operations in Atlantic City (besides Borgata), those additional gambling revenues are the difference between a winning or a losing month.
UIGEA Enforcement
The United States government has a complicated and ambivalent relationship with online gambling. Before 2006, online gambling was unregulated in the United States, but existed in a gray area. In the fall of 2006, the US Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), which went into effect on December 31, 2006. Any form of gambling banned under the 1961 Wire Act (for telephone lines) would be banned on the Internet.
During the Bush Administration, the UIGEA imposed a ban on online sportsbooks, casinos, and poker sites. For over 4 years, that was the interpretation. In December 2011, the state attorney generals of New York and Illinois asked US Attorney General Eric Holder which activities were banned under his interpretation of the 1961 Wire Act. Because organized crime did not handle casino and poker bets over the telephone lines, the Department of Justice replied that sports betting was illegal under UIGEA, but online casinos and card rooms were not.
Restore America’s Wire Act
New Jersey, Nevada, and Delaware passed ballot initiatives in 2012 and eventually rolled out online gambling industries in their states in 2013. In 2014, Sheldon Adelson announced he would oppose online gambling. He created the Coalition to Stop Internet Gambling (CSIG), which recruited US congress members to sponsor a piece of legislation: Restore America’s Wire Act.
That bill has failed several times to gain traction in the US Congress. Despite that fact, it continues to be added to yearly omnibus spending bill. Recently, Rep. Charlie Dent (R) of Ohio added a version of RAWA to a spending bill, which might have concerned Chris Christie and the New Jersey Legislature. Also, Sen. Mark Warner (D) of Virginia called for a ban on online gambling.
Attorney General Jeff Sessions said in his confirmation hearings that he was “shocked” that Eric Holder’s DoJ had allowed online casinos and poker sites. Sessions eventually recused himself from online gambling enforcement, because his personal lawyer in the Russian probe also works for Sheldon Adelson as a lobbyist.
That means Deputy Attorney General Rod Rosenstein would have the authority to change the Department of Justice opinion on UIGEA. From his time as a US attorney in Baltimore, the evidence shows that Rod Rosenstein is at least as hostile as Jeff Sessions on the subject of gambling.
With two possible forms of jeopardy hanging over New Jersey online gambling, the Republican Christie and the Democrat-led New Jersey legislature decided to appeal directly to Donald Trump.
Trump Entertainment Resorts History
The Trump casinos fell into bankruptcy two separate times, in the mid-1990s after a high profile divorce and in 2008-2009, during the credit crunch brought on by the Global Recession. During the 2009 financial crisis, the board of directors at Trump Entertainment Resorts forced the company’s founder out as CEO. Instead, he took 10% interest so the casinos had the right to use the “Trump” name. When Trump Plaza began to fall into disrepair, Donald Trump sued his resort company in order to force them to remove the name.
Trump Plaza closed, while the other two casinos still have a role in the Atlantic City casino industry. Trump’s Castle eventually became Golden Nugget Atlantic City, while Trump Taj Mahal was bought by Hard Rock International and plans to reopen next year as the Hard Rock Atlantic City. Hard Rock is owned by the Seminole Tribe of Florida.
