Yesterday, the New Jersey Division of Gaming Enforcement released a Director’s Advisory Bulletin via its Director, David Rebuck. The bulletin was created to explain how the department will be handling online poker gaming operations that take place in grey markets. A grey market is a jurisdiction where online gaming isn’t forbidden explicitly, but there is a question to the legality of the activity.
Grey markets are an area that the state of New Jersey has had to deal with since offering online gambling. Casinos in Atlantic City didn’t want to create software platforms to be able to provide casino or poker gaming. Instead of doing so, the land based casino operators decided to sign partnership agreements with a company that had an established platform in place and could be used for gaming. An example would be the Borgata Casino working with bwin.party, offering online gaming via the software of partypoker.
However, potential providers of gaming software could be operating in a country that is considered a grey market. This brings about the question as to if the service being provided is in line with the regulations in place in New Jersey to have the ability to obtain a license for online gaming.
Rebuck stated that the iGaming operations across borders have caused an uncertainty with regulators of gaming in regards to the lawfulness of online gaming operations in foreign jurisdictions by licensees and how the activities are to be considered during evaluations of the suitability of the company for licensing.
Rebuck stated that the uncertainty is due to several factors including legislative bodies failing to put laws in place specifically covering iGaming, confusion towards the application of existing gaming laws for land-based venues in regards to online operators and the absence of concrete actions by foreign governments to indicate whether online gaming is opposed by citizens.
The Director continued by stating that confirming companies are operating in black markets, a jurisdiction where online gambling is illegal, will not be able to establish the requirements of honesty, good character and integrity for licensing in the state of New Jersey.
Licensees of New Jersey are not allowed to offer services in areas where it is illegal to provide online gambling services if they are not approved via licensing in that particular jurisdiction. In regards to a licensing standard, Rebuck had this to say:
“It is in this context that the Division finds itself attempting to articulate a licensing standard that fulfills its regulatory responsibilities under the Act while also giving proper deference to the sovereignty of other jurisdictions. After careful consideration of the various issues implicated in its decision the Division, in assessing the legality or Internet gaming in a foreign jurisdiction, will not adopt a standard that could erroneously substitute its own judgment for that of another sovereign jurisdiction’s executive, legislative or judicial authority. The state of the law in many jurisdictions is constantly evolving and often defies a clear categorization, making it extremely difficult for the Division to adopt a more stringent approach.”
The DGE will be evaluating a potential licensee based on each particular case. If the potential licensee was operating in a jurisdiction considered a black market, they will not be licensed. If the DGE finds the area of the applicant to be a grey market, then they are still eligible for licensing.
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