The state of New Jersey is leading the way towards liberalization of internet gambling laws by introducing a bill to permit intrastate internet gambling via websites operated by casinos in Atlantic City.

In New Jersey state, residents can already place online bets on horse-racing; the S3167 Senate Bill proposed by Senator Raymond Lesniak (D-Union) would also allow online poker, blackjack and baccarat, regulated by the New Jersey Casino Control Commission.

The upfront license issuance fee, based on regulation costs, will be not less than USD200,000 and similarly the renewal fee will be not less than USD100,000. A non-refundable deposit of at least USD100,000 will be required to be posted with each application for an Internet wagering permit to be applied to the initial permit fee if the application is approved.

In addition to the permit issuance and renewal fees, a casino licensee with an Internet wagering permit must pay annually to the commission USD100,000, USD85,000 of which shall be allocated to the Council on Compulsive Gambling of New Jersey; the balance of USD15,000 will be used for compulsive gambling treatment programs in the State.

A 20% tax on internet wagering gross revenue would be charged, part of which would go to the New Jersey Racing Commission for the benefit of horse-racing. A 5% "investment alternative tax" would also apply to internet wagering gross revenues with an "investment alternative" of 2.5%, according to article 9 of the Bill.

The Interactive Media Entertainment and Gaming Association, which joined a challenge to the federal ban on state-regulated sports betting, has also worked closely with New Jersey legislators on the new intrastate bill. Chairman Joe Brennan commented in a press release:

“We’re happy that New Jersey has taken this issue into their own hands. New Jersey is recognized as having the toughest gaming regulators in the US, but as a leading gaming state with a long track record of doing things the right way, Internet gambling will have a great home here and the opportunity to begin normalizing the industry.”

“The efforts to resolve the Internet gambling issue have stalled in Washington DC. If states assert their right to regulate gambling and take a serious look at permitting Internet gambling within their borders, one side effect may be a breaking of the deadlock in the US Congress.”

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp