Online Gambling in Atlantic City

For bigger or for worse, online bank is advancing to New Jersey.

In backward February, Chris Christie clearly active into law a bill that legalized internet bank in Atlantic City.

Initially the bill was banned by the Governor because of issues surrounding accuracy and taxes. Lawmakers adapted the argument and the adapted bill anesthetized by an cutting majority in the assembly and becoming Christie’s allowance of approval.

Here are the basics of the bill:

- Casinos amid in Atlantic City-limits will be able to administer for a authorization to action online gambling. Alone the twelve official Atlantic City-limits casinos will be acceptable for the license. No added organizations can action internet gambling, and face annealed fines if they do. All accessories acclimated for the operation of internet bank accept to be amid aural city-limits limits; alone bets that are accustomed by a server in Atlantic City-limits will be legal.

- Players accept to be “physically present” in New Jersey to abode wagers. In the future, New Jersey may advance agreements with added states area internet bank is acknowledged to admittance out-of-state gambling. The casino’s accessories accept to verify players’ locations afore accepting wagers.

- Any amateur accessible to play in the casinos can be played online. (For comparison, Nevada alone allows poker.) As of now, sports action will not be adequate by this bill, although the accompaniment of New Jersey is aggravating to action the federal statute barring the amends of sports betting.

- The bill has all kinds of accoutrement to accumulate bank addiction at bay, such as acute the arresting affectation of the 1-800-GAMBLER hotline number, a way to set best bets and losses over a assertive aeon of time, and tracking amateur losses to analyze and absolute users who may authenticate addictive bank behavior.

- Acquirement from online bank will backpack a 15% tax. The Christie administering states that about $180 actor in acquirement for the accompaniment will be generated from this tax, but some analysts anticipate this amount is seriously overestimated.

The official regulations, which the bill adapted the Division of Gaming Enforcement to produce, were released on June 3, and are accountable to a “public animadversion period” until August 2 afore getting finalized. These rules cover data such as how a bank acquires the adapted licenses and procedures for advancement arrangement aegis on bank sites.

So, will online bank in fact account the state?

The Good

Revenues from Atlantic City-limits casinos accept been on the abatement for the accomplished seven years, and online bank could be what saves the declining casinos. Since 2006, bank acquirement has alone from $5.2 billion to about $3 billion. Online bank could be a $500 actor to $1 billion industry in New Jersey, which may be abundant to accumulate disturbing casinos afloat and save jobs in Atlantic City. Further, even admitting estimates of tax acquirement are all over the map, there is abeyant for online bank to be a appreciably admired antecedent of money for the state. The casinos will aswell accept to pay a tax to the Bank Reinvestment Development Authority, which will accommodate added abetment to disturbing casinos in Atlantic City.

For the player, low aerial costs beggarly bigger prizes and added opportunities to play. Casinos can incent players with chargeless “chips” that accept basal costs for them but accord players added opportunities to play and win. The accessibility of bank online allows players to play added with beneath travel.

BAD:

One of the goals of the bill is allegedly to allure added humans to appointment the brick-and-mortar casinos, but it is harder to say if online bank will in fact advance to this outcome. One could brainstorm it could even could could cause humans to go to the casinos beneath (However, this seems unlikely; the amusing aspect and the chargeless drinks are absent in online gambling. Also, analysis indicates that, at atomic with poker, internet gaming does not abate bank gaming.) Advertising for the host bank will be accustomed on the online bank sites, which could possibly animate humans to appointment the bank but could aswell be annoying for players.

Online bank could be actively adverse for humans who accept bank addictions, or even could could cause humans to advance them, adopting banking and moral concerns. Even with all the bactericide accomplish the bill requires, it will absolutely be abundant harder to cut off besetting gamblers if they can abode bets anywhere with an internet connection.

Regardless, it is traveling to be a while afore the casinos can in fact bang off their online bank offerings. The regulations charge to be accomplished and casinos charge to administer for licensure and advance their bank websites. This agency the casinos will not be adequate this new antecedent of acquirement during the 2013 summer season, which could be Atlantic City’s toughest division anytime afterward accretion from Hurricane Sandy.

New Jersey has placed its bets, but alone time will acquaint if online bank will be a jackpot or a bust.

Online Gambling

Internet Casinos Inc. (ICI), the world’s first online casino, started operating from August 18, 1995, with 18 different games. Since then more than 1,400 websites, mostly domiciled in small Caribbean islands, have given rise to an industry that grosses over $3 billion a year. In fact no business on the Internet earns more revenue than online gambling. Out of the estimated 14.5 million online gamblers, almost 30 per cent are from Asia.

A bet can be placed in minutes. Anyone with a credit card can set up an offshore currency account with a gambling site, leaving them free to place bets on sporting events like Wimbledon, cricket, horse racing and Formula One, or join a virtual casino to play slot machines, roulette, blackjack, poker etc. Companies like Flutter and Betmart accept bets on anything from who is going to win the Nobel Prize to whether Madonna is getting a divorce or not. Bets can range from a nickel to thousands of dollars and according to whether you win or lose the amount is automatically adjusted to your account. The final balance can then either be mailed to you or left for future bets.

The law relating to online gambling in India needs to be understood within the country’s socio-cultural context. At the outset, gambling, although not absolutely prohibited in India, does not receive express encouragement by policy makers. The Indian organized gambling industry is estimated to be worth around US$8 billion. While stringent laws have checked the proliferation of casinos and high street gaming centres as in many other countries, barring the state of Goa, the lottery business remains the most post popular form of gambling.

Though gambling is not illegal, it is a highly controlled and regulated activity. Modern India is a quasi-federal Constitutional democracy and the powers to legislate are distributed at the federal as well as the state levels. Gambling features in List II of the Constitution of India, this implies that the state governments have the authority to enact laws in order to regulate gambling in the respective states. Thus, there is no single law governing gambling in the entire country. Different states have different laws governing gambling in addition to the laws that have an application across the country. While some states have banned lotteries, other states allow state government lotteries marketed and distributed in other lottery playing and promoting states through private entities.

Regulation of gambling

The courts have defined gambling as ‘the payment of a price for a chance to win a prize’. The dominant element of skill or chance shall determine the nature of the game. A game may be deemed to be gambling if the element of chance or luck predominates in deciding its outcome. As a result, Indian courts have held that betting on horse racing and a few card games are not gambling. The right to undertake the business of gambling and lotteries is not considered as a fundamental right protected by the Constitution of India. It may however be pointed out that the state government run lotteries make significant contributions to the state exchequer of several state governments and the Union government, and hence there is a resistance to complete prohibition.

The following legislation is pertinent to gambling:

The Public Gaming Act, 1867

This Act provides punishment for public gambling and for keeping of a ‘common gaming house’. This Act also authorises the state governments to enact laws to regulate public gambling in their respective jurisdictions. The penal legislations in respective states have been amended in accordance with their policy on gambling. However, this legislation does not have any direct impact on online gambling unless a wide interpretation is given to the definition of common gaming house so as to include virtual forums as well.

The Indian Contract Act, 1872 (ICA)

The ICA is a codified umbrella legislation that governs all commercial contracts in India. Under the ICA, a wagering contract is the one which cannot be enforced. The Act lays down; ‘Agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide by the result of any game or other uncertain event on which any wager is made’. Gambling, lottery and prize games have held to be wagering contracts and thus void and unenforceable. While a wagering contract is not illegal, it cannot be enforced in a court of law. Thus, the courts will not entertain any cause of action that arises out of a wagering contract.

Lotteries (Regulation) Act, 1998

This Act provides a framework for organizing lotteries in the country. Under this Act, the state governments have been authorized to promote as well as prohibit lotteries within their territorial jurisdiction. This Act also provides for the manner in which the lotteries are to be conducted and prescribes punishment in case of breach of its provision. Lotteries not authorized by the state have been made an offence under the Indian Penal Code. Several non-lottery playing states, like Gujarat and Uttar Pradesh, have prohibited the sale of other state-government lotteries under this Act.

Indian Penal Code, 1860

Section 294A deals with keeping lottery office. It says that whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both.

And whoever publishes any proposal to pay any sum, or to deliver any goods, or to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be punished with fine which may extend to one thousand rupees.

Internet gambling

The law related to gambling is also applicable to online gambling. All gambling contracts are considered to be wagering contracts and it is not possible to enforce such contracts under the ICA, detailed above.

As pointed out earlier, the online lottery is the most popular form of internet gambling in India. Most companies marketing and distributing or conducting state government-sponsored lotteries through the internet are not allowed to sell their services in the states that banned lotteries. In most cases, these marketers and distributors limit their online services to consumers who are residents of the states where a lottery is permissible. Notwithstanding the fact there has been no reported case of breach by any company promoting online lotteries, most of these companies (as a safeguard) seek an undertaking from their consumers relating to their residence.

There have been instances where one state has banned the lottery of other states, including online lotteries. In a recent case, the Karnatka High Court upheld the decision of the Karnataka government to make itself a ‘lottery free zone’ by imposing a ban on lotteries of all other states, including online lotteries under the Lotteries (Regulation) Act 1998. The state government, in this case, directed the closure of the terminals and kiosks selling the online lotteries.

Enforcement over foreign jurisdictions

If the websites are hosted and operated from outside India, it may be difficult for the Indian authorities to issue any directive to close them down or prohibit their access without using its blocking powers under the ITA. The authorities have little to worry about, as Indian foreign exchange laws do not permit remittances outside India for gambling related activity, such as the purchase of lottery tickets, football pools and sweepstakes. As a result, a gambling website hosted outside India aiming at receiving money from within India cannot do so through legal channels.

Conclusion

Online gambling remains a highly regulated sector with seemingly limited horizons to grow. While the present regulatory framework makes it difficult for offshore gambling websites to target customers in India, the India-based companies can only distribute and market state-government lotteries online in permitted territories. The pervasive authority with the government to block gambling related websites and the impossibility of enforcing gambling-related contracts further discourage the prospects for the industry.