Top New Jersey Sports Betting Regulator: Illegal Websites ‘Very Good At What They Do’

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NJ sports betting regulations

If there’s anyone who is a must-listen about New Jersey sports betting, it’s David Rebuck.

The director of the Division of Gaming Enforcement (DGE) knows his turf better than anyone, overseeing all aspects of NJ gambling from regulation to implementation.

Rebuck appeared at a hearing of the Assembly Tourism, Gaming and the Arts committee on Thursday, offering deep insight into his staff’s operations. In addition to updates on the current and future market, his testimony included strong words about illegal offshore operations.

Rebuck sets the stage

Chairman Ralph Caputo opened the meeting with glowing commendations for the director, his staff, and the lawmakers involved in the process. He cited sports betting as a boon for casinos and a “lifeline to the dying horse racing industry.”

So far, eight of the New Jersey’s 14 licensees have applied to offer sports betting, and all eight are operational.

According to Rebuck, some of the remaining permits will likely remain on the table:

“I think a lot has to do with their business decisions, about where they want to be in the future, the scope of how they want to engage in sports wagering. I do believe that not all 14 ultimately will apply for a license, but that’s their business decision.”

Eight online/mobile platforms are up and running, too. The DGE’s inbox is empty after approving the BetStars application, but the director is expecting more mail soon.

“There will be a lot more, because there is substantial interest,” Rebuck said.

And much of that interest comes from outside the US:

“We have a huge interest in operations from Europe, who have been very successful doing gambling over the years, coming to the United States right now. Some will not make it, I can assure you. And some will not even apply.”

NJ going after 100+ illegal operators?

A long-standing federal law prohibits foreign gambling companies from serving American customers.

But it’s a prohibition in principle alone at this point. A quick internet search turns up countless US-facing sportsbooks based in countries like Antigua and Costa Rica, all of which are openly violating the law.

Rebuck testified that the illegal gambling market is “massive” in the US, operating in broad daylight. “They are extremely robust,” he said. “They make our operations look like a five-and-dime store.”

According to Rebuck, the DGE is already looking at ways to address the problem.

“We’ve been researching this with our law enforcement partners to get a better understanding of how they operate in the United States … At this point in time, we’ve identified over 108 illegal websites that take sports wagers from every state in the United States today. They’re very good at what they do.”

The DGE has already warned operators about “significant consequences” for conducting business with companies violating federal law.

“You will not get licensed in NJ,” Rebuck said. “And I will fight you to get licensed in any state.”

Regulators are working with operators, partners, leagues, and the US Department of Justice “to begin looking at what [they can] do to work together to fight this scourge.”

This page includes an up-to-date list of all legal, licensed sportsbooks in NJ.

Working with leagues to monitor integrity

It’s no secret that NJ has had an adversarial relationship with the governing bodies of the US sports leagues. Those leagues, after all, dragged the state through a years-long legal battle that eventually ended up before the US Supreme Court.

That said, it takes a team effort to ensure the integrity of sports and sports betting. Rebuck testified that mutual mechanisms are in place, and they’ve already been tested a couple times since launch.

Here’s more from the director:

“We’ve already contacted the leagues. I’ve met with the NFL, I’ve met with the PGA [Tour]. We’ve begun our dialogue on how we will work together to share information when we have suspicious or unusual activity on their events.

“OK … remember what I said about the illegal sites? They better have a very strong system in play already, because the illegal sites are bigger than we are. We have good dialogue with the gaming operators for integrity, and we’ve already shared information.

“Yes, we have had issues that have not impacted any of the leagues, but we are aware of notices that came to us from an event at Wimbledon, as well as an event at the US Open that were identified — tennis — as suspicious.”

Potential issues are flagged to the DGE, which works to determine whether or not there is cause for concern. “Just because a matter is unusual or suspicious,” Rebuck added, “it doesn’t mean there is an integrity issue.”

Tennis, it should be said, does not have a great record for integrity in recent years, so NJ stakeholders are wise to be extra vigilant.

New Jersey charting its own course

Rebuck closed his testimony with a lap around the emerging US sports betting industry, reminding the committee that NJ will be competing against neighboring states like Pennsylvania and Delaware.

To a lesser extent, Rebuck even has his sights set on supplanting Nevada sports betting as the epicenter of the US industry. He rejected the notion that NJ copied — or even wanted to copy — Nevada’s model:

“This business technology, this new commercial venture, we will do better than Nevada does. Because we have to. Nevada is a different market than we are in New Jersey. We are less a destination market than they are.”

Rebuck also commended the legislature for the structure of the law, which allows casino licensees to dictate the landscape. The properties themselves determine which brands can enter the marketplace, provided the DGE approves.

The DGE expects a lull in new sports betting laws until after the midterm elections, after which Rebuck predicts a “tremendous uptick” in the appetite. “And that uptick will be driven by how well the state of New Jersey performs in the next four months,” he said. “If we fail, we might not have too much competition.”

That comment drew a laugh from the committee, but Rebuck is correct. All eyes are on New Jersey right now. “We won’t fail,” he finished.

Gaming consultancy Eilers & Krejcik recently projected that NJ sports betting revenue could surpass Nevada’s by 2021.