ICLG - Gambling Laws and Regulations - USA - New Jersey Chapter covers common issues in gambling laws and regulations – including relevant authorities and legislation, application for a licence, licence restrictions, digital media, enforcement and liability.
1.1 Which entities regulate what type of gambling and social/skill gaming activity in your jurisdiction?
Relevant Product
Who regulates it in digital form?
Who regulates it in land-based form?
Gaming
Casino gaming (including slots and casino table games such as roulette & blackjack)
New Jersey Division of Gaming Enforcement.
New Jersey Division of Gaming Enforcement and New Jersey Casino Control Commission.
Betting
Sports/horse race betting (if regulated separately to other forms of betting)
New Jersey Racing Commission regulates horse racing and the New Jersey Division of Gaming Enforcement regulates sports betting.
New Jersey Racing Commission regulates horse racing and the New Jersey Division of Gaming Enforcement and New Jersey Casino Control Commission regulate sports betting.
Fantasy betting (payment to back a ‘league’ or ‘portfolio’ selection over a period of time, for example in relation to sport or shares)
New Jersey Division of Consumer Affairs – Fantasy Sports Unit.
Lotteries
New Jersey Division of State Lottery.
Social/Skill arrangements
“Social” gaming with no prize in money or money’s worth
Skill games and competitions with no element of chance
New Jersey Division of Consumer Affairs – Legalized Games of Chance Control Commission.
1.2 Specify: (i) the law and regulation that applies to the Relevant Products in your jurisdiction; and (ii) – in broad terms – whether it permits or prohibits the offer of Relevant Products to persons located in your jurisdiction.
Casino Gaming
Both online (iGaming) and land-based casino gaming, which includes poker, are permitted by individuals located in New Jersey and are governed by the New Jersey Casino Control Act (N.J.S.A. 15:12-1 to -233) and the regulations promulgated thereunder. The regulations are located within the New Jersey Administrative Code, Sections 13:69 to 13:69P and 19K:40A to 19K:43A.
Sports Wagering
Online and land-based sports wagering is permitted by individuals located in New Jersey. Sports wagering is governed by the New Jersey Casino Control Act, Sections 15:12A-1 to 19. Sports wagering is included in the aforementioned regulations promulgated pursuant to the Casino Control Act.
Horse Racing
Pari-mutuel, fixed-odds and exchange wagering are permitted on horse racing by those located in New Jersey at brick-and- mortar facilities and online via account wagering. Horse racing is governed by N.J.S.A. 5:5-22 to 206 and through regulations within the New Jersey Administrative Code at Title 13, Chapters 70, 71, 72, 73, 74, 74A, 74B and 74C.
Lottery
The New Jersey Lottery is the only legal lottery in the state and is governed by N.J.S.A. 5:9-1 to 25 and the regulations promulgated thereunder as set forth in N.J.A.C. Title 17, Chapter 20-1.1 to 12.23.
Bingo
Bingo is permitted in New Jersey and governed by the Bingos and Raffles Law (N.J.S.A. 5:8-1 to 77). The administrative regulations governing Bingo are within the N.J.A.C. Title 13, Chapter 47. Certain online bingo games have been classified as casino games by the New Jersey Division of Gaming Enforcement and are permitted to be offered by licensees authorised to offer iGaming in New Jersey.
Fantasy
Fantasy sports, considered games of skill and not gambling, are legal within New Jersey and are governed by the Fantasy Sports Law N.J.S.A 5:20-1 to 2 and N.J.A.C. regulations 13:45A-36.
Skill Games
Skill games are only permitted so far as they are not considered gambling under New Jersey criminal law. Under N.J.S.A. 2C:37-1 “Contest of chance” is defined as “[a]ny contest, game, pool, gaming scheme or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants or some other persons may also be a factor therein”. Therefore, certain skill games are permitted as not meeting the definition of gambling if chance is present but does not materially affect the outcome of the skill-based game. Certain low-stakes skill-based attractions are permitted to be offered by certain operators in designated locations licensed pursuant to the New Jersey Amusement Games Law, N.J.S.A. 5:8-78, et seq. and regulated by the Amusement Games Control Commissioner within the New Jersey Division of Alcoholic Beverage Control.
Social Casino
Where the element of “prize” has been eliminated, the games are not considered gambling and there are no state statutes add-
2.1 What regulatory licences, permits, authorisations or other official approvals (collectively, “Licences”) are required for the lawful offer of the Relevant Products to persons located in your jurisdiction?
Licensure requirements for different types of gambling will vary depending on the applicable enabling legislation and regulations promulgated pursuant thereto, as outlined in the answer to question 1.2.
Pursuant to the Casino Control Act, to own or operate a casino, an applicant requires a casino licence and must: 1) be the owner of a casino or under contract to purchase or construct a casino hotel; 2) have a written agreement with a casino licensee or an eligible applicant for a casino licence for management of a casino; 3) have control over either an approved casino hotel, the land thereunder, or the operation of a casino; or 4) be an iGaming affiliate of an owner or operator of a licensed casino.
For iGaming, a land-based casino must hold an iGaming Permit. Online/mobile iGaming operators must have a market access agreement with a land-based casino, and must obtain a Casino Service Industry Enterprise (“CSIE”) licence.
Retail sports wagering may be offered by licensed casinos and racetracks holding a Sports Wagering Licence. Online/mobile sports wagering operators must have a market access agreement with a land-based casino or racetrack, and must obtain a CSIE licence.
For pari-mutuel wagering, a racetrack must possess a permit to conduct a horse race meeting, and an OTB must possess a licence issued by the New Jersey Racing Commission. A licence is also required for the conduct of account and exchange wagering. A limited number of permits to conduct a race meeting are available by statute. Only seven in total may be issued (three thoroughbred and four harness). Only 15 OTB licences are authorised and by statute are only issued to the New Jersey Sports & Exposition Authority (“Authority”), horsemen’s organisations and one “well-suited entity”. One account wagering licence and one exchange wagering licence are available and by regulation belong to the Authority. With the prior approval of the Racing Commission, for OTBs, account wagering and exchange wagering, the licensee may enter into an agreement with a person or entity to operate such on its behalf.
The New Jersey Division of State Lottery is the only entity permitted to conduct a lottery in the state. To sell lottery tickets, a Lottery Sales Agent must possess a licence issued by the Division of State Lottery. Third parties may also operate an online/mobile lottery courier service upon obtaining a Lottery Courier Service Permit issued by the Division of State Lottery.
Every organisation interested in conducting charitable bingo must obtain a registration certificate from the Legalized Games of Chance Control Commission. Once registered, the organisation must file a licence application with the appropriate municipality where the games are to be held.
To be a fantasy sports operator, a permit is required pursuant to the Fantasy Sports Law.
2.2 Where Licences are available, please outline the structure of the relevant licensing regime.
The structure and process of the licensing regime is generally the same for each type of licence and each regulatory authority. The process is set out in the answer to question 2.3 below.
2.3 What is the process of applying for a Licence for a Relevant Product?
In respect of a licence to conduct casino gambling, sports wagering, pari-mutuel wagering, and lottery courier services, a licence application and disclosures for associated entities and individuals must be filed with the relevant regulatory authority.
The following persons are required to submit disclosures and be found qualified (“suitable”) as part of the application for a casino licence: persons listed in the answer to question 2.1 above as eligible to own or operate a casino; all financial backers and holders of debt (which bears relation to the casino operation or premises) that hold 25% or more of such financial instruments or debt; each officer and director of a corporate applicant; each person who directly or indirectly holds any beneficial interest or ownership of the securities issued by such applicant; anyone who has the ability to control the applicant or to elect a majority of the board of directors of such applicant; and each holding, intermediary or subsidiary company of an applicant for a casino licence.
Each holding, intermediary and subsidiary company of an applicant is required to establish the qualification (suitability) of: corporate officers; directors; persons who, directly or indirectly, hold a beneficial interest or ownership of 5% or more; any person who has the ability to control or elect a majority of the board of directors; and any other person considered appropriate for qualification. Institutional investors who have not been granted a waiver must also file disclosures.
For a CSIE licence, disclosures for the following entities and individuals are required, and each must be found qualified: the applicant; holding and intermediary companies; natural persons owning, directly or indirectly, 5% or more beneficial interest in the applicant, holding or intermediary company; directors of the applicant; all inside directors and outside directors on the Executive and Audit Committees of holding or intermediary companies; officers of the applicant, holding and intermediary companies; the management employee supervising the regional or local office that employs the sales representative; and each employee who will act as a sales representative or otherwise regularly engage in the solicitation of business from casino licensees.
For horse racing, fantasy, bingo and lottery, see question 2.1.
A suitability investigation will be conducted – in most cases by the Division of Gaming Enforcement – and a report will be issued recommending issuance or denial of a licence. A type of “temporary licence” is available in most instances. An applicant for a casino licence may be eligible for Interim Casino Authorization, an applicant for a CSIE licence may be eligible for a “transactional waiver”, and an applicant for a lottery courier service permit may be eligible for a temporary permit.
2.4 Are any restrictions placed upon licensees in your jurisdiction?
The Casino Control Commission, Division of Gaming Enforcement and Racing Commission possess the statutory authority to impose conditions on licences. Moreover, the relevant legalisation and regulations impose many conditions and restrictions on licensees.
The following are representative of the restrictions imposed on various types of licensees:
2.5 Please give a summary of the following features of any Licences: (i) duration; (ii) vulnerability to review, suspension or revocation.
All permits and licences must be renewed through submission of a renewal application.
2.6 By Relevant Product, what are the key limits on providing services to customers? Please include in this answer any material promotion and advertising restrictions.
The statutes and rules governing the various forms of legalised wagering in New Jersey contain a multitude of limits upon providing services to customers. To illustrate, certain selected provisions are outlined.
No wagers can be accepted from underage individuals. The minimum age for pari-mutuel, fixed-odds, exchange, bingo, lottery and fantasy is 18. For casino, sports wagering and iGaming, it is 21.
Any advertising in a casino shall contain the phrase “Bet With Your Head, Not Over It”, or comparable language. Advertising shall be based upon fact, and shall not be false, deceptive or misleading. The following practices are prohibited: advertising within a casino hotel complex that violates the state obscenity statutes, or that includes certain specific prohibited content as outlined in the regulations; and the failure to maintain any offer for the advertised period of availability or in a quantity sufficient to meet reasonably anticipated demand. An applicant or licensee shall also be responsible for all advertisements which are made by its agents, regardless of whether the applicant or licensee participated directly in its preparation, placement or dissemination. These standards also apply to CSIE licensees.
Operators offering mobile wagering of any kind must be able to confirm that the person placing the wager is located within the state.
iGaming and casino hardware, software, and other equipment must be located in secure casino facilities or other facilities owned thereby in Atlantic City. A racetrack sports pool or online sports pool must locate its servers in Atlantic City if not at the racetrack. A fantasy sports operator that is a casino must locate its servers in Atlantic City. If a fantasy sports operator is not a casino, at least one server must be located in Atlantic City.
The message “If you or someone you know has a gambling problem and wants help, call 1-800-Gambler” shall be displayed prominently on the log on screen and a command to display this message on the log off screen shall be transmitted whenever the system detects a log off for iGaming and fixed-odds. It shall also appear on any casino or sports pool advertising, as well as on a notice where bingo is conducted.
Each sports wagering licensee may provide no more than three individually branded websites, each of which may have an accompanying mobile application bearing the same brand as the website for an online sports pool.
A racing permit holder may impose restrictions on advertising on jockey or driver apparel to preserve the traditions of the turf or to promote the safety of race participants.
2.7 What are the tax and other compulsory levies?
The Casino Control Act imposes an 8% annual tax on casino gross revenue. Sports pool gross revenue is taxed annually at 8.5% plus an additional 1.25%. Online sports pool operations are subject to a 13% annual tax on gross revenue plus an additional 1.25%. The annual tax in iGaming gross revenues is 15% plus an investment alternative tax of 2.5%.
For fantasy sports, there is a quarterly operations fee of 10.5% of gross revenue.
For horse racing, the distribution of money withheld from winnings varies depending on the method of wagering (pari-mutuel, fixed-odds, exchange), type of racing (thoroughbred or harness), the type of wager, where the wager is placed, and the location of the race being wagered on.
2.8 What are the broad social responsibility requirements?
The Racing Commission maintains a self-exclusion list that applies to racetracks, OTBs, fixed-odds, account and exchange wagering. The Division of Gaming Enforcement maintains the same for casinos, mobile sports wagering, and iGaming. A person may request to be placed on the self-exclusion list and during the period of voluntary exclusion, the person may not collect winnings or recover losses resulting from wagering. Operators are responsible for cross-referencing the self-exclusion lists before permitting a wager or bet to be placed.
Likewise, fantasy sports operators offer individuals the ability to restrict themselves from participating in fantasy sports activities and take steps to prevent such individuals from participating. Operators are also required to establish a limitation on the number of entries an individual participant may submit for each fantasy sports activity and take steps to prevent a participant from exceeding that number.
Whenever a winner of a lottery prize greater than $600 is indebted to any agency or institution of state government, including, but not limited to the Victims of Crime Compensation Agency, child support, or other indebtedness, the lottery prize is used to satisfy the indebtedness.
2.9 How do any AML, financial services regulations or payment restrictions restrict or impact on entities supplying gambling?
The Bank Secrecy Act (“BSA”), 31 USC §5311 et seq. is a federal statute that applies to “financial institutions” including casinos with a gross annual gaming revenue in excess of $1 million. A Currency Transaction Report (“CTR”) must be filed by casinos to report each transaction in currency involving cash-in and cash-out of more than $10,000 in a gaming day. Each casino must develop and implement a written AML programme. The programme must include: internal controls; training of employees; independent testing for compliance; a compliance officer; procedures for verifying the identity of a person; procedures for determining suspicious transactions; and procedures for using computers to aid in assuring compliance.
The federal Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA”), 31 U.S.C. §5361, et seq. creates criminal liability for those: (1) engaged in the business of betting or wagering; (2) who knowingly accept money; (3) in connection with unlawful gambling – a term that is defined therein. However, UIGEA provides a specific exemption for intrastate transactions that comply with state law where sanctioned transactions are explicitly excluded from the definition of “unlawful internet gambling”. In summary, UIGEA does not criminalise conduct that is otherwise lawful under state and federal law, i.e., authorised intrastate online gambling and lottery.
Further, there are specific requirements within the New Jersey statutes and regulations regarding AML compliance (New Jersey Revised Statutes (N.J. Rev. Stat.), Section 2C:21-25). For instance, a casino licensee offering iGaming shall have an iGaming manager responsible for the operation and integrity of iGaming and reviewing all reports of suspicious behaviour. The iGaming manager notifies the Division of Gaming Enforcement if they detect a person engaging in theft, embezzlement, collusion, money laundering, or any other illegal activities. An iGaming system itself is required to be designed to detect and report suspicious behaviour, such as money laundering, or any other illegal activities.
Sports pool and fixed-odds operators are required to file internal controls with the Division of Gaming Enforcement prior to commencing operations. Such internal controls include a description of AML compliance standards including, but not limited to, filing of CTRs, Suspicious Activity Reports (“SARs”), and procedures for detecting structuring to avoid reporting requirements.
2.10 Does your jurisdiction permit virtual currencies to be used for gambling and are they separately regulated?
No virtual currencies are currently permitted.
3.1 How does local law/regulation affect the provision of the Relevant Products in online/mobile/digital/electronic form, both from: (i) operators located inside your jurisdiction; and (ii) operators located outside your jurisdiction?
The New Jersey State Constitution only permits casino gambling (including sports betting) within the geographic boundaries of the City of Atlantic City. Therefore, iGaming/mobile gaming and sports wagering may only be offered from servers physically located in Atlantic City, as the wager is deemed to be struck where the server resides, as per the relevant legislation.
Operators whose servers are located outside New Jersey are prohibited from offering products to New Jersey residents and are ineligible for a local licence.
3.2 What other restrictions have an impact on Relevant Products supplied via online/mobile/digital/electronic means?
See the answers to questions 2.4 and 2.6 above.
3.3 What terminal/machine-based gaming is permitted and where?
Fixed-odds kiosks are permitted at racetracks, self-service pari-mutuel machines are permitted at tracks, OTBs and slot machines are permitted in casinos, and self-service sports betting machines/kiosks are permitted in a licensed facility. In addition, keno machines are permitted in certain bars and taverns as approved by the Division of State Lottery.
4.1 Who is liable under local law/regulation?
The holder of a licence or permit, as well as key employees and shareholders licensed or qualified in connection with such licence, may be liable for violations of the provisions of the applicable law and regulations.
4.2 What form does enforcement action take in your jurisdiction?
The primary enforcement mechanism is the imposition of regulatory sanctions, including monetary fines and penalties, licence restrictions or revocation, and a finding of unsuitability or bar from re-applying for a licence. The primary enforcement authority is the Division of Gaming Enforcement in most cases. In rare instances, criminal enforcement is possible.
4.3 Do other non-national laws impact upon liability and enforcement?
Unlike most countries, gambling in the USA is primarily regulated by local/state law. However, certain national/federal laws do have an impact on local/state gambling and must be consulted, including UIGEA and the Wire Act, 18 U.S.C. §1084.
4.4 Are gambling debts enforceable in your jurisdiction?
Yes, gambling debts owed to a licensed casino or operator are enforceable. Land-based casinos are permitted to extend credit to casino patrons.
4.5 What appetite for and track record of enforcement does your local regulatory authority have? Have fines, licence revocations or other sanctions been enforced in your jurisdiction?
The Division of Gaming Enforcement regularly imposes fines on casinos and online/mobile operators for various violations. Generally, the severity of the monetary penalties increases based on two factors: the frequency of violations/if they are repeat violations; and the severity of the infraction. Regulators impose more significant penalties for violations relating to: underage gambling; geoblocking violations; AML violations; and violations related to the self-exclusion list. In some cases, strict conditions have been placed on licences. It is very rare for a licence to be revoked.
5.1 What (if any) intended changes to the gambling law/regulations are being discussed currently?
In August 2023, the Division of Gaming Enforcement requested comments from casino licensees on the latest in a series of comprehensive proposed regulatory reforms, as set out below. The last time New Jersey gaming regulators approved new rules, amendments or repealed regulations was prior to the coronavirus pandemic in early 2020.
The Division of Gaming Enforcement has proposed New Jersey Administrative Code (“NJAC”) 113:69E-1.28Y to authorise skill-based games. Patrons can play against the game software or against another patron in arcade-style electronic games for real money. The new section of the rule makes it very clear such games are not slot machines and, accordingly, do not have a guaranteed payback of at least 83%. The proposed regulation also requires games to be clearly labelled so patrons can distinguish them from regular games of chance, and the games cannot be altered during gameplay to account for a patron’s skill. Peer-to-peer skill-based gaming shall be monitored for collusion and money laundering activity using an automated feature, or in accordance with the internal controls of the casino licensee. The proposed rules allow for a skill-based game to provide an “adaptive feature to increase the payback percentage in order to improve the actual return to player”.
The Division of Gaming Enforcement has also proposed amendments to its regulation governing identity theft, and the deposit and withdrawal of funds for mobile gaming and sports betting accounts, making it more difficult for criminals who commit identity theft from being able to profit from such crimes.
Online operators have always been required to enable their patrons to deposit or withdraw funds at the cage of the casino or racetrack with whom the operator is partnered; however, this requirement is now being codified within New Jersey’s gaming regulations. To prevent persons who commit identity theft from obtaining cash improperly, an online operator processing a withdrawal at the cage of a casino or racetrack shall be required to obtain and maintain a still photograph of any person withdrawing $500 or more. The online operators shall also be required to obtain identification of the person making the withdrawal, with the identification method conforming to the Division of Gaming Enforcement’s codified statutory requirements. Further, the new regulations would require such identification and photo be released upon demand of the Division of Gaming Enforcement, a law enforcement agency, or pursuant to the lawful order of a court of competent jurisdiction.
An additional proposed rule would cap the amount billed to an applicant for the investigation associated with a key casino employee licence to $4,000, which is in addition to the $750 application fee. These changes make it mandatory for the Division of Gaming Enforcement and the New Jersey Casino Control Commission to identify and collect the true costs associated with the regulatory investigative process. The Division of Gaming Enforcement noted the rules need to be updated to stay consistent with the expansion of regulated gaming in New Jersey.
This chapter has been written by a member of ICLG's international panel of experts, who has been exclusively appointed for this task as a leading professional in their field by Global Legal Group, ICLG's publisher. ICLG's in-house editorial team carefully reviews and edits each chapter, updated annually, and audits each one for originality, relevance and style, including anti-plagiarism and AI-detection tools. This chapter was copy-edited by Oliver Chang , our in-house editor.