Online gambling has been slowed in New Jersey partly because illegal offshore operators are continuing to draw gamblers and millions in potential revenue away from the state.
“Internet gambling exists in all 50 states today,” said David Rebuck, director of the New Jersey Division of Gaming Enforcement. “It’s just not regulated.”
New Jersey is one of three states—Nevada and Delaware are the others—to legalize online gambling. Players must be physically located in the states to legally play.
Rebuck said New Jersey recently sent cease-and-desist letters to out-of-state gambling companies that have been marketing to New Jersey residents.
The letters warn that offering unlicensed online gambling in the state is a fourth-degree crime in New Jersey, subject to fines of as much as $100,000.
The letters were sent to RaketheRake.com, , PokerSource.com, RakeBrain.com and PokerSites.com, which officials said are offering links to illegal online gambling websites alongside links to New Jersey’s licensed sites, according to published reports.
“We believe this may either taint legitimate sites by associating them with the illegal ones, and conversely may lend the appearance that these illegal sites are affiliated with authorized sites,” Rebuck said. “The illegal websites should not underestimate the investigative capabilities and actions of the division.”
Rebuck said some sites have already stopped taking wagers from state residents.
Atlantic City casinos such as the Tropicana Casino and Resort—which operates its own online casino site—have come out in favor for the state’s move.
“Advertisements for illegal sites that are displayed side-by-side with legitimate casino operators not only create a misperception of legitimacy, it undermines the credibility of legitimate operators,” the casino said in a statement.
Online gambling has also been slowed by technical problems and the refusal of many banks to honor online gambling transactions in all three states.
Still, panelists were optimistic the online market would grow.
“We think what’s happening in the U.S. is the single most exciting happening in iGaming in the world,” said Eamonn Toland, president of the North American arm of the Irish-based Paddy Power online betting firm.
Morgan Stanley predicts that by 2020, legal online gambling in the U.S. will generate $8 billion a year.