New Jersey Governor Signs Bill Allowing Betting on eSports

Separate bill to allow deduction of promotional gaming credits (PGCs) draws conditional veto, but lawmakers have agreed to changes.
New Jersey Governor Signs Bill Allowing Betting on eSports
By and
November 12, 2021

New Jersey Gov. Phil Murphy signed legislation to allow betting on eSports in the state.

The bill signed into law, A637, was sponsored by Assemblyman Ronald Dancer (R-Plumsted) and had passed the state Senate in a 40-0 vote on June 21.

“eSports have exploded in recent years, and we need to allow the casinos and racetracks in New Jersey to participate in this revenue generating business,” Dancer told MidJersey.news. “New Jersey needs to stay competitive, and this law will allow us to be a part of the growing popularity of e-sports. I thank the governor for signing this.”

A key driver for the rapid growth of eSports has been the COVID-19 pandemic, which saw many traditional sports take a forced hiatus over the last couple of years. This brought with it a heightened interest in wagering on eSports, as more customary, outdoor sports betting opportunities fell victim to the virus.

However, whilst lockdown provided a catalyst for interest in competitive video gaming, it is fair to say that the industry was already growing rapidly. Sooner or later, the economic benefits of allowing betting on eSports would surely have proved irresistible.

Up to this point, wagering on eSports had been illegal in the Garden State, with the law explicitly prohibiting gambling on competitive video games. This has now been amended, with definitions for the terms “sports event” and “prohibited sports event” rewritten to permit gambling on events where most of the participants are 18 or older.

The new legislation extends to events such as competitive eating contests.

Bill draws conditional veto but still alive

Murphy issued two vetoes — one conditional and one absolute — for a pair of other bills sent to his desk.

The bill A4002, which would have allowed deduction of promotional gaming credit (PGC) from gross revenue on sports wagering, was given a conditional veto.

Specifically, Murphy suggested that the PGC deduction be allowed only for “gross revenue tax on non-internet sports pool operations with the hope that the expansion of PGCs will attract new visitors.”

The governor also suggested eliminating of a provision from the bill “that reverses a longstanding policy that requires PGCs to be returned to winning bettors in order to qualify for a deduction.”

Lawmakers appear to have acquiesced. The bill advanced through a second reading in the state Assembly on concurrence with the governor’s recommendations on November 8.

A separate bill, A4297, would have allowed charitable organizations to offer bingo, lotto, and raffle games remotely, and also permit online sale of tickets for all bingos and raffles. Murphy issued an absolute veto.

“I commend the sponsors for their recognition of the need of these charities to raise funds to support their good works, and for their advocacy of the use of remote technology to achieve this laudable purpose,” Murphy said in explaining his reasoning behind the veto.

“However, the legislation fails to address the myriad practical regulatory and resource concerns attendant to the expansion of the conduct of charitable bingo, lotto and raffle games using remote communication technology.”

Murphy concluded that at present, the state could not provide a “requisite level of regulatory oversight to prevent fraud, ensure integrity and avoid other improper or undesirable results such as security breaches, identity theft and similar abuses.”

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