Choosing Sides

Everyone wants online gaming to be safe, transparent and legal, right? The integrity that the land-based industry struggled to create for many years should be reflected in the online gaming business, right?

Next year, we’ll celebrate the 50th anniversary of legalized gaming in New Jersey, the first U.S. state outside of Nevada to permit it. I recently did the third episode of our new Gaming Legacy Podcast with Steve Perskie, the former New Jersey legislator who wrote the Casino Control Act and the bulk of the regulations. We talked about how Steve and his team developed the guidelines from scratch; at the time, Nevada was still struggling with the industry’s connection to organized crime, and Perskie (along with Governor Brendan Byrne) wanted to make sure Atlantic City gaming would be squeaky clean.

The challenges were immense. New Jersey unions were riddled with questionable connections, and Atlantic City’s government was crooked as well. At least half a dozen Atlantic City mayors were indicted before and after the passage of the casino referendum. So the regulations had to be ironclad.

And they were. Sometimes they went overboard, but only in the goal of maintaining integrity. And in the end, New Jersey regulations were so robust that for years they were adopted by many jurisdictions in the U.S. and around the world, sometimes

word-for-word.

Even online gaming was on board with New Jersey’s stiff interpretations of licensing, operations and player protection. As we saw legal online gaming introduced in New Jersey in 2013—the first U.S. state to allow it—the regulations mirrored that of land-based gaming. As a result, there has been very little cause for concern with the legal online casinos and sportsbooks that operate in New Jersey.

But now we see the intrusion of gambling sites—and have no doubt, they are gambling sites, even with their denials—like sweepstakes casinos and prediction markets, trying to skirt the regulations that most legal gaming states have established. And worse, they’re trying to get a foothold in states and jurisdictions that prohibit all online gambling.

Those of us who lived through the struggle to establish gaming as a legal, safe and productive industry have always pointed to the public benefit of the industry. These new sites, however, offer none of the tax revenue, player protections or job creation that land-based and even legal online gaming have produced. The respect that we’ve earned over the years is now threatened by illegal gambling operations with none of the public acceptance that we’ve established.

What’s more disturbing is the role of supposedly respected members of our industry who have profited and helped build the legal industry with their expertise and their integrity. Now those same people are advocating for illegal gambling, claiming it’s not really gambling and that no harm is done to the players or the jurisdictions where they prowl illegally. I won’t name names, but you know who you are and you should be ashamed.

You can’t have it both ways. Either you’re a supporter and promoter of legal gambling or you’re not. If your online social games begin with no monetary value but escalate via a complicated process that turns worthless coins into real money, you’re involved in a ploy to offer illegal gambling, no matter what you call it.

And if you pretend that your form of gambling is simply a financial instrument that somehow translates into a legitimate investment, that’s simply ridiculous.

Now, some have postulated that the success of the DFS companies in the sports betting realm is equivalent to what’s happing now. “We don’t want to be left behind like we were with sports betting!” This is a moronic argument, because there’s no way either sweepstakes gaming or prediction markets would ever get the boost that the legalization of sports betting gave to DFS.

And don’t get me started about the “skill games” that have gotten traction in dozens of states.

So can we please agree that all gambling needs to be regulated and taxed the same way that the current legal gambling operations are? Don’t try to manufacture a way to get around the system that’s worked for all these years. For the sake of the industry and our players, let’s stop this madness.