New Jersey has one of the largest legal gambling markets in the United States. People in the Garden State can gamble and place sports bets on-site or online. The online market in New Jersey is booming. This may explain why two of the largest offshore sportsbooks operating in New Jersey have closed up shop.
BetOnline.ag and Bookmaker.eu withdrew from accepting money from New Jersey gamblers. The companies sent an e-mail to gamblers based in New Jersey last month. The e-mail informed them that the companies will no longer accept players from New Jersey. The companies also said they were closing the players’ accounts. If the players had current bets pending, the companies canceled their bets and refunded their money. The companies also told players they have until Oct. 1 to withdraw any funds that are still in their accounts.
The companies have given no reason why they suddenly decided to leave New Jersey. However, experts believe it has to do with the state’s ongoing crackdown on illegal sportsbooks.
New Jersey Sports Gambling
New Jersey wanted to legalize sports gambling for years. The state legalized sports betting in 2012, even though the federal government banned it in 1992. The Professional and Amateur Sports Protection Act (PASPA) barred sports gambling in the United States, except in Nevada. Single sports betting was already taking place in that state. However, New Jersey took the federal government to court. The state argued successfully that if it allowed sports betting, the federal government couldn’t interfere. The U.S. Constitution guarantees the states the right to regulate their own commerce. As soon as the U.S. Supreme Court declared the law unconstitutional last year, New Jersey began offering sports gambling.
With the new emphasis on sports betting, the director of gambling enforcement has vowed to crack down on illegal sportsbooks. The Department of Gaming Enforcement (DGE) director stated he wanted people to place sports bets in New Jersey legally. He said at least 10,000 websites were accepting U.S. wagers illegally across the United States. The director said the illegal sportsbooks aren’t paying state taxes and are taking tax dollars out of the state’s coffers. The director vowed to seize assets from companies that took money from New Jersey residents. The companies that did not have state licenses could face seizures and fines.
When the director began discussing the crackdown a year ago, he singled out three companies. He cited BetOnline and Bookmaker, as well as Bovada. BetOnline and Bookmaker have been doing business in the United States for two decades. Both companies have their servers offshore. They interpreted the law in this way: There is no crime if their servers were not in the United States. Many companies have taken advantage of the murky laws in the United States regarding online gaming. However, once the United States passed the Unlawful Internet Gambling Enforcement Act in 2006, the laws were clear. Companies knew they either had to go into legitimate markets or vow to remain outside the law.
Most regulatory agencies haven’t wanted to spend the time and effort to go after companies that aren’t in the U.S. However, New Jersey’s director has stated he will freeze assets of companies when he finds them in the state. This seems to be a big enough threat to both BetOnline and Bookmaker. They decided New Jersey isn’t worth their time. If other states choose to follow New Jersey’s lead, they may go after assets to protect their companies as well. If that happens, there may be fewer illegal bookmaking sites in the future.
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