New Jersey’s Rebuck On Internet Regulation

April 16, 2014

Writing for GamblingCompliance, James Kilsby writes about Director of New Jersey’s Division of Gaming Enforcement David Rebuck and his belief that when it comes to the debate in Congress about banning online gaming, prohibition is non-starter:

New Jersey’s chief gambling regulator is under no illusions that the Garden State finds itself under the microscope as by far the largest of the three U.S. states to have authorized Internet gaming so far.

Barely more than a week before New Jersey’s market launch on November 26 the Washington Post revealed the creation of the Coalition to Stop Internet Gambling, backed by casino giant Las Vegas Sands and its multi-billionaire founder, Sheldon Adelson.

On March 26, two federal bills were introduced in the U.S. House and Senate to outright prohibit a form of gaming that its critics, such as Adelson, claim is not secure and is ripe for exploitation by minors and gambling addicts.

Rebuck told delegates at last week’s U.S. Online Gaming conference in Atlantic City he is aware that New Jersey — and his agency — will be the “poster child” for the effectiveness, or otherwise, of Internet gambling regulation.

“We feel tremendous pressure … and we get asked every day to go out and get involved in this debate. I don’t choose to,” he said.

“If we are successful, as I expect we will be, then we will let our actions speak for themselves as regards the debate by those who want to eliminate Internet gaming in the United States as an option in any state, or those who want to take a slower approach.”

The article goes on to elaborate on offshore operators in New Jersey and the challenge it presents regulators with–where Rebuck reiterates his belief that even if the bill is passed, it will have little to no effect.

If there is an area of friction between the DGE and the New Jersey operators who were impressed with the process to open the state’s online market last year, it is with regard to unregulated competition.

Speaking to analysts last month, Norbert Teufelberger, CEO of PartyPoker owner Bwin.Party, suggested marketing activity by offshore operators in New Jersey has actually been on the rise since November, with “new companies … trying to capitalize on that opportunity.”

The Bwin.Party chief, who is not the only gaming executive to publicly lament the presence of offshore competition, also said his expectation was that the DGE “will shut that down quite efficiently and soon.”

Rebuck acknowledges the problem, but cautions enforcement is a major challenge when unlicensed companies are operating in all 50 states, typically from foreign jurisdictions.

“If they have a physical presence in the state we can get ‘em, in many ways. But it’s hard. And we probably have to do a better job educating the general public,” he told GamblingCompliance.

“We’ve had some good ideas and we’re going to keep pursuing it, [but] it’s going to take a lot of coordinated effort with others because it’s really a criminal activity.

“Maybe we should be working with others, and we have a good relationship with the [U.S.] Justice Department and others, to set policy in this area, because nobody wants this. So, we’ve got a lot more work to do … and we’re learning.”

Still, past experience suggests prohibition is not the answer, according to the DGE chief.

“If you’re going after these operators in foreign countries the basic issues are such that we need a coordinated effort to help. But just because a law’s passed that says there will be no Internet gaming, that’s not going to stop it.

“You saw it with sports wagering. Sports wagering in this country is huge. And to say that it’s not happening because it’s prohibited, you can’t say that.”

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