David Rebuck Has Discussed Gaming Compact Ideas with Nevada and the United Kingdom
David Rebuck, the Director of New Jersey’s Division of Gaming Enforcement, said in a 10-page letter sent on January 5 that his state’s online gaming regulatory system has been a success during its first year of operation. He also hinted for the first time a serious interest by New Jersey regulators to join an interstate gaming compact.
Rebuck said in his open letter that the DGE would like to see cross-state cooperation in the online poker market, where peer-to-peer gaming could become a winner for the various jurisdictions, as well as the gamblers involved. Though no specific agreements have been reached, Rebuck mentioned the prospects of cooperating with Nevada and the United Kingdom.
State Law Allows for Compact Signing
In the letter, David Rebuck said that legislation signed by Governor Chris Christie in February 2013 allowed for “multijurisdictional agreements“. Such an arrangement might increase New Jersey’s online gaming revenues by a significant amount, because it would open gaming to a much larger population base.
From November 30, 2013 until the end of December 2014, licensed online gambling sites in the state of New Jersey have raked in more than $120 million. That is far short of the $1 billion Chris Christie had suggested was a realistic goal for the state. The six online poker sites in operation have been a particular disappointment, with some of them collecting less than $100 of revenue in their first year of operation.
90% of Legal Gaming Revenue in US
Despite the disappointing figures, the DGE Director points out that, according to a UNLV Gaming Study, New Jersey still collected more than 90% of all legal online gaming revenues in the United States last year. The states of Nevada and Delaware also have legalized and licensed sites, but those states have much smaller operations in comparison, due to their small populations. Those states are ranked 35th and 46th in population figures in the United States, while New Jersey is ranked 11th.
Why a Compact Is Important
Signing an interstate or international compact with other jurisdictions would be a particular boon to the online poker sites. Such sites need to maintain a large number of gaming tables in order to accommodate the many game variants, betting limits, and types of tournaments players want to play. Some card players prefer sit-n-go or turbo events, while others prefer larger tournaments which take hours to complete. Some gamblers want to play in freezeouts like those shown on televised poker shows, while others want rebuys and add-ons in the event rules. Some don’t want to play tournaments at all, but prefer to gamble in cash games or “ring games”.
To attract a wide range of poker players, sites need enough gamblers to accommodate at least 9 players at a table all day, every day. Signing an interstate compact with Nevada or Delaware would help increase the size of the community. If California, Pennsylvania, or New York state legalized online poker and then signed onto the compact, these states would swell the list of players by a significant amount, due to their large populations. Signing a compact with the United Kingdom would offer a similar advantage, which is why the Division of Gaming Enforcement is changing its original stance on the subject.
DGE Open to Discussions
In his letter, David Rebuck said, “The Division is open to discussions in this area and always seeks to ensure that any agreements are most beneficial to New Jersey’s Internet gaming industry.”
Rebuck added that the system put in place by regulators has been working without any major problems for the past year. He added, “From a regulatory standpoint, our system is working. There have been no major infractions or meltdowns or any systematic regulatory failures that would make anyone doubt the integrity of operations.”
Gaming Companies Surprised by Startup Issues
At the same time, the chief regulator in the state said that the industry’s operators had been surprised by the resources needed for starting up the industry and supporting those sites properly. Support was needed to upgrade the geo-location technology which restricts play to New Jersey, while companies also needed to inform the credit card companies, banking institutions, and payment processing companies that gambling was legal and safe in the state.
Rebuck said most of the operators had problems which limited growth in 2014, but many lessons were learned. He said, “They thought they would be able to flip a switch and start up their current system here,” the letter said. “They quickly found out that was not going to happen. There was definitely a learning curve for the operators to adjust to our regulatory framework but that has improved dramatically. Companies adapted to our new model which we believe has helped improve the industry and raised its standards.”
Ways to Improve Service
Many opportunities for improvement remain. According to the U.S. Office of the Comptroller, 73% of Visa payments and 44% of MasterCard transactions have been accepted at legal New Jersey gaming sites. Increasing those numbers is of paramount importance to the gaming operators, because players who can’t use their chief funding source are likely to get frustrated and refuse to play at all. Thus, failed credit card transactions have hurt numbers significantly. A big part of the raising those numbers is convincing the companies that such transactions are legal and safe for them. The service is spotty, because credit card associations are made up of tens of thousands of individual financial institutions and vendors–all of whom need to be informed.
Rebuck’s letter addressed the issue, saying, “As the banking industry becomes more familiar with legalized Internet gaming and patrons become more educated about the various options for funding their accounts, further improvements are expected in this area.“
