04-27-17 - By J.R. Duren
New Jersey Online Gambling News
Get the latest news and developments for both NJ's online gambling industry and the land-based casino industry in Atlantic City. Did you know that all of NJ's legal gambling websites operate in a partnership with one of Atlantic City's casinos?
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New Jersey gambling: A historical snapshot
New Jersey has a long cultural history of gambling.
From the first horse racetrack in the United States to one of the first states to allow online gambling, New Jersey has always been at the forefront of innovation and new territory in the world of wagers, bets, and chances.
The origins of gambling in New Jersey
During the colonial era, New Jersey’s culture was more permissive of gambling than other colonies. This was influenced largely by New Jersey’s ethnically and religiously diverse population.
Unlike other colonies such as Massachusetts and Georgia, where more homogenous populations allowed for greater religious influence, New Jersey’s diverse population paved the way for secular influences on its people’s lives.
Gambling not only occurred and flourished, but was sanctioned by the government.
In the early days of the United States, lotteries were used to raise money for military supplies and training. This happened in the French, Indian and Revolutionary wars.
During peaceful times, lotteries were used to raise money for civic projects. This included projects such as the construction of the College of New Jersey, now known as Princeton University, and Queen’s College, now known as Rutgers University.
Colonial lotteries worked just like modern ones. Every ticket had a number, a drawing was held, and the bearer of the winning ticket has a specified amount of time to redeem the prize money. Winnings were taxed. The proceeds went to fund government-sponsored projects.
Lotteries continued to be used in this manner until they were banned in New Jersey in 1844. A major recession in the young United States as well as the lottery’s poor reputation with the public led to this ban.
Gambling Ban
Although lotteries were used to fund projects that benefited the people, they cultivated an image of laziness and vice. Religiously-motivated critics petitioned the government to ban lotteries due to their immorality and by 1890. The only states where legal lotteries remained were Delaware and Louisiana.
New Jersey, being accustomed to gambling as a pastime and mostly outside the reach of zealous religious reformers, didn’t enforce anti-gambling laws very strictly. Slot machines, bookmaking operations, and numbers games continued to be popular.
In 1894, parimutuel betting was prohibited in the state, but this was also enforced loosely. Parimutuel betting is the type of betting that’s used in horseracing and other sporting events.
All players pay into a pool, and payoff odds are calculated according to the amount of money in the pool. (After the bet keeper, known sometimes as “the house,” takes its cut.) During this time, races at the Freehold Raceway continued uninterrupted. Betting on these races was not made legal until 1939.
Horseracing in NJ
The Freehold Raceway is a crucial pillar in the history of gambling in New Jersey as well as the United States. The half-mile racetrack began hosting horse races in the 1830s, making it the oldest racetrack in the country.
It officially opened in 1854, when the Monmouth County Agricultural Society hosted the first annual harness race there. Since 1955, it’s been the home of the Cane Pace, the first leg of the Triple Crown of Harness Racing for Pacers.
Freehold Raceway is best known for its harness racing. Harness racing is a type of horse racing where the horses race at either a trot or a pace, pulling their riders behind them in two-wheeled carts. The iconic image of a harness racing jockey decorates Freehold Borough’s water tower to this day.
Along with the Freehold Raceway, New Jersey is home to the Monmouth Park Racetrack in Oceanport, the Atlantic City Race Course in Mays Landing, and the Meadowlands Racetrack in East Rutherford.
These are regulated by the New Jersey Racing Commission. This is the state bureau responsible for maintaining safety standards and anti-fraud regulations in New Jersey’s horseracing industry.
A fifth racetrack, the Garden State Park Racetrack in Cherry Hill, operated from 1942 to 2001. Both harness and thoroughbred races were hosted there. During its heyday, Garden State Park held the Jersey Derby, Garden State Stakes and the Gardenia Stakes.
Secretariat, one of the most famous racehorses in the history of the sport, competed there in the 1972 Garden State Stakes.
Off-Track betting
Four off-track betting centers operate in New Jersey to serve players better. At these facilities, gamblers over the age of 18 can place bets on horses at racetracks around the state.
They are located in Fords, Bayonne, Toms River and Vineland. They operate by taking a house cut of all money won on bets placed by their customers. These facilities are a relatively recent addition to New Jersey’s horseracing industry. The first two opened in 2007 and the newest, Winners Bayonne, opened in 2012.
Horseracing remains popular in New Jersey. In 2013, Governor Chris Christie signed a bill allowing New Jersey to host one horserace on a beach every year. Monmouth Park will host the first annual New Jersey beach race.
New Jersey Lottery
In 1969, the question of whether or not New Jersey should create a statewide lottery made the ballot.
Nearly 82 percent of voters were in favor of the move. In 1970, NJSA 5:9-1 was enacted and the New Jersey Lottery was born. Governor William T. Cahill purchased the first New Jersey lottery ticket in December of 1970.
The rest of the decade saw numerous precedents and bold moves for the New Jersey lottery. One benchmark moment was the launch of New Jersey’s first instant game, or scratch ticket, in 1975. This first game was called 7-11-21 and had a top prize of $10,000.
Today, instant games are available at convenience stores, liquor stores, supermarkets, and pharmacies throughout the Garden State. They frequently feature imagery with attention-grabbing color combinations designed to draw in potential players. This type of lottery game is very popular among casual and serious gamblers alike because winning tickets can be redeemed immediately for cash at any New Jersey Lottery retailer.
Under NJSA 5:9-1, the State Lottery Law, at least 30 percent of unclaimed lottery prize money is given to public educational institutions within the state. The New Jersey Lottery often exceeds this amount, giving far more of its unclaimed money to schools and educational centers.
Funding schools through lottery income is a long-standing tradition in New Jersey, going back to the construction of Queen’s College and The College of New Jersey.
Gambling in Atlantic City
No history of gambling in New Jersey would be complete without a discussion of Atlantic City.
From the 1910s to the 1940s, Enoch L. “Nucky” Johnson was a corrupt political boss in Atlantic City, associated with gambling and prostitution rings. During Prohibition, he saw to it that the anti-liquor laws went unenforced in Atlantic City. This created a playground of vice for any customer who was willing to break the law.
Johnson wasn’t a completely negative influence on Atlantic City, though. He directed the construction of the Atlantic City Convention Hall, now known as Boardwalk Hall, completed in 1929. Over the years, it has hosted scores of notable events, including every Miss America pageant from 1929 to 2006.
Rampant criminal activity in Atlantic City during this era led to a changing image for the once-family friendly beach resort town. Danger and corruption became Atlantic City’s new descriptors. This negative reputation couldn’t have come at a worse time.
After World War II, the rise of automobile use contributed heavily to the public’s waning interest in Atlantic City and other older East Coast resorts.
Previously, vacationers from New York City and Philadelphia would arrive by train and stay for at least a week, enjoying the top-rate amenities and the crisp ocean air. Once city-dwellers became suburbanites and cars made it possible to make Atlantic City into a day trip, the week-long ocean vacation became less appealing.
Atlantic City saw its popularity – and its profits – dwindle. The final nail in old Atlantic City’s coffin was the newly-affordable, fast commercial jet service to newer resorts in Florida and the Caribbean. Now, cold northeastern waters had even less charm and Atlantic City’s hotels fell into disrepair, with some becoming cheap apartment housing and others converted into nursing homes.
By the 1970s, the prospect of legalized gambling seemed like a perfect solution for the blighted city. It would bring much-needed jobs to the city’s residents and create a new casino experience for players. It would be unlike anything that existed on the East Coast.
People were optimistic and voted heavily in favor of allowing casinos to operate in Atlantic City in 1976, after a 1974 bill to allow legal casino gambling throughout the state was voted down.
In 1978, the first legal casino in town, Resorts, opened to the public. Governor Brendan Byrne cut the ceremonial ribbon, and a new era in New Jersey gambling began.
At first, the casino was only allowed to operate eighteen hours per day on weekdays and twenty hours per day on weekends. This law remained in place until 1991, when Governor James Florio allowed Atlantic City casinos to experiment with 24-hour gambling.
The trial was a success, and in 1992, a new law was enacted to allow all casinos to operate 24 hours per day.
For the rest of the 1970s through the 1980s, New Jersey’s decision to legalize casino gambling in Atlantic City proved to be a success. Donald Trump became a household name as a result of his investment in the city and high-profile boxer Mike Tyson held many of his popular events in Trump’s properties, further tuning the nation in to what Atlantic City had to offer.
Critics pointed out that this success was limited to property owners and their middle-to-upper class clientele; many of the residential neighborhoods throughout the city remained as derelict as they’d been twenty years prior. In many ways, though, Atlantic City finished out the 1980s in a much healthier place than it had been before Resorts opened.
It surpassed Las Vegas as the gambling capital of the United States, and its future looked bright.
But just when it looked like Atlantic City had hit its stride, developers in Las Vegas started to revitalize their city, drawing back the legions of gamblers who headed east to play in New Jersey. Two luxury casino hotels opened in Connecticut, creating competition along the Eastern Seaboard.
As a result, Atlantic City’s numbers declined. The city spent the 1990s in a static state, offering the same tired attractions and unable to raise enough money to create something new or different.
Then, it all changed again. In 2003, the Borgata, a super-luxe mega resort in the city’s Marina District, proved that there was room in Atlantic City for big-budget projects that could rival the recently-constructed Las Vegas resorts. Soon, plans for more Borgata-like accommodations cropped up, including proposals from MGM and Jimmy Buffett.
But the timing just wasn’t right for these projects. When the 2008 recession brought the United States economy to a halt, all but one of these projects were scrapped. That one remaining project, owned by Morgan Stanley and under development by the Revel Entertainment Group, was completed in 2011 and opened in 2012.
The ultra-modern resort boasted live entertainment, first-class dining, a spa, a hotel and 130,000 square feet of gaming space.
In less than one year, Revel filed for Chapter 11 bankruptcy. It proved to be difficult to draw gamblers back to Atlantic City, but Governor Chris Christie made it part of his mission to revive the city and keep gambling money in New Jersey.
In addition to the casinos in Connecticut, new gambling opportunities opened in Pennsylvania, attracting customers who would previously have played in Atlantic City. To try to win players back, the DO AC campaign was launched in 2012 to show that there’s more to Atlantic City than gambling, such a vibrant nightlife scene and family-friendly offerings.
Another strategy used to keep gambling dollars in Atlantic City was the launch of legal New Jersey online gambling websites in 2013.
Legal online gambling in New Jersey
In November 2013, online gambling became available to players in New Jersey. Because casino gambling is still illegal outside the city, the servers hosting the websites must be located within Atlantic City and affiliated with licensed land-based Atlantic City casinos.
Now, any person over 21 with an internet connection can visit a legal New Jersey online casino without leaving his or her home (provided that home is within the state of New Jersey, as players must be physically present in the Garden State to access real money gambling).
The industry has proven to be a major success, with growth on the online casino side outpacing that which has been experienced by online poker sites in New Jersey. Legal sites in New Jersey set an example to other states that may be looking into legalizing internet casino and poker games, as the New Jersey Division of Gaming Enforcement holds sites to a high standard.
In terms of geolocation, know your customer (KYC) checks, and problem gambling resources, the New Jersey online gambling industry is poised to serve as a model for responsible online gambling regulation in the United States.
The internet changed everything. The way we communicate, the way we shop, and the way we get our news have all shifted dramatically since its birth, and it’s only becoming more integrated into our lives as time progresses.
New Jersey, always ready to harness the latest trend, has successfully brought its gambling culture to the internet. Only time will tell whether this is a passing fad or a permanent addition to the many legal gambling options in the Garden State. New Jersey’s rich history has seen successes, failures, and adaptations to keep cultural institutions relevant.
Atlantic City has been saved before. Hopefully, it can be saved again.
Lottery ticket image c/o Notre Dame University, Horse racing image credit: Jerry Zitterman / Shutterstock.com
