The Garden State legalized some internet wagers in 2013, but the bill that ushered the practice into the state set its expiration date as late 2023. The new bill would push that deadline to 2033.

“I think it’s critical for the properties here, to keeping them open and to keeping those jobs open,” said Assemblyman Don Guardian (R-Atlantic), a co-sponsor and former Atlantic City mayor.

The state legalized internet gambling as Atlantic City casinos struggled to retain gamblers amid the launch of new casinos in New York and Pennsylvania.

“The casino industry was subsiding. It was collapsing at the time,” said Assemblyman Ralph Caputo (D-Essex), adding, “It’s been very helpful in terms of keeping the lights on in Atlantic City. We can’t do without that.”

Online wagers grow

Online wagers have grown into an increasingly significant source of revenue for casinos since they were first allowed in 2013.

New Jersey’s casinos brought in nearly $1.4 billion from internet gaming in 2021, a 41% increase over the $970 million reported in 2020. That increase followed a stunning 101% rise in internet wager revenues spurred by pandemic shutdown orders in 2020, according to the Division of Gaming Enforcement.

Casinos’ total gaming revenue was $2.6 billion in 2020 and $4.2 billion last year.

Last year’s internet gaming revenue was a far cry from the nearly $123 million online wagering brought in during 2014, its first full year, and the practice is set to reach a new record again this year. For the first seven months of 2022, casinos’ online gaming wins were up by about 26% compared to 2021.

The swell has left online gambling as casinos’ second largest source of funds. Only slot machines bring in more money, and that revenue typically sees smaller growth. Since 2015, online wager wins have grown by at least 20% every year, and they’ve often increased by far more.

“I think the growth of the industry has demonstrated the need to keep it in place,” said Caputo, the bill’s prime sponsor and chair of the Assembly’s gaming committee.

Despite the recent swells, the growth in online gaming revenue appears to have leveled off this year, with monthly revenues hovering between $130 and $140 million since March.

It’s not clear whether that’s an actual plateau or an effect of summer tourism drawing more gamblers to Atlantic City, said Jane Bokunewicz, faculty director of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism.

Competition could become a problem again. Online sports betting is legal in New York and Pennsylvania, where internet wagering is also legal. Legislation in New York would allow broader online casino gambling, but the measure has not moved from committee since being referred there in March.

“As New Jersey’s neighbors expand their gaming operations and add experiences like online wagering, New Jersey will need to continue to innovate and deliver new and engaging gaming products to compete,” Bokunewicz said. “Internet gaming would seem to be an important and lasting part of Atlantic City’s gaming portfolio moving forward.”

Caputo’s bill doesn’t make online wagering a permanent fixture. He said lawmakers are leaving an avenue open to make adjustments in case internet betting begins to hurt in-person gambling.

The measure could impact more than just revenue. Guardian said a sunset date for internet gaming could hamstring development by casinos and rob the city of the economic activity it brings. Guardian’s term as mayor immediately followed the launch of online wagering.

“You’re going to look at it as a lending institution and say, ‘A key part of your success is internet and sports gaming, and so we’re a little nervous,'” he said.

The bipartisan bill does not yet have a Senate counterpart, though Caputo, who previously worked as a marketing executive for three Atlantic City casinos, said he and the other sponsors plan to find a like-minded lawmaker in the upper chamber after the bill moves out of the Assembly Tourism, Gaming, and the Arts Committee, as it’s expected to do Thursday.

Casino taxes fund a variety of social service programs at the state level — including transportation for seniors and residents with disabilities, home health aides, and job assistance for residents with developmental disabilities — with additional funds going to Atlantic City and Atlantic County, though whether the latter receive online gaming and sports betting revenues is being fought out in the courts.

Lawmakers aren’t forgetting that gambling itself can be dangerous. “With any type of gaming, you have people who aren’t able to control their spending,” Guardian said. “It’s an addiction, so making it easier for people to gamble, we have to make sure that we have the ability to help them if they’re spending beyond their reasonable means.”