For many years, there was one unquestioned capital of gambling in the United States. That place is Las Vegas. Now, however, thanks to a long, storied history of gambling and recent legislation that has changed the way gambling is done in the state, New Jersey has assumed that title. There are several factors that have led to the Garden State’s ascendance to the top of the U.S. gambling world. Here are 3 reasons why New Jersey became the gambling capital of America.
1. A History of Gambling
New Jersey isn’t new to the gambling scene in America. It has long held the reputation of being more permissive to gambling than other states. This is illustrated by the fact that the state is home to Freehold Raceway, the oldest horse racing track in the country which opened almost 200 years ago in 1830.
The state was also known back then for its use of lotteries to help finance projects. Two of these lottery-backed projects became the state’s two most famous institutions, Queens College and the College of New Jersey. You probably know them better today as Rutgers University and Princeton University as they are now known.
Gambling was technically illegal in New Jersey unit 1939 when the state started passing a series of laws over the next few decades legalizing different forms of gambling. This legalization process culminated in 1976 when New Jersey voters passed a referendum legalizing casino gambling. This form of gambling was to be restricted to one New Jersey city, Atlantic City.
Once the legislation passed, the Chalfonte-Haddon Hall Hotel was converted into the Resorts International casino. It opened in 1978 and became the first legal casino on the east coast. The city grew quickly as a gambling destination and by 1983, the town’s casinos were earning more from gambling than their counterparts in Las Vegas. This long, storied history of New Jersey as the east coast gambling mecca is a big reason it was able to become the gambling capital of America in the 21st century.
2. Legalizing Online Betting
Becoming the capital of gambling is not built on Atlantic City alone, however. In fact, legalizing sports betting has helped save the New Jersey gambling legacy. Following the 2008 financial crisis, Atlantic City was hit hard. Casinos that were being built stopped being built and others had to close their doors for good.
In 2011, in the midst of the Atlantic City downturn, New Jersey passed a law legalizing betting outside of the confines of Atlantic City. Then-governor Chris Christie initially vetoed the law but after some help from a legal opinion by the U.S. Department of Justice and some revisions to the original legislation, online gambling was legalized n New Jersey in 2013.
The law stipulates a 10-year trial period for online gambling and only allows online casinos to be operated by licensed Atlantic City casinos. Players must be at least 21 years of age and all NJ gambling apps must be outfitted with GPS verification systems that allow gambling only within the physical confines of the Garden State.
The law also did something else which helped New Jersey grow as a travel destination and a gambling capital. It increased the state’s tax take from gambling from 8% to 15%. This led to the state taking in more than $100 million in additional revenue by 2017. Today, the total amount brought in by New Jersey online casinos has overtaken the revenue of the traditional land-based casinos in the state.
3. The Growth of Sports Betting
In addition to taking gambling online in the early 2010s, New Jersey also took the enormous step of legalizing sports betting in the state. In 2012, New Jersey amended its previous gambling laws to include a provision for legalized sports gambling. The law did not go into effect soon after though.
Thanks to lawsuits brought by the four major North American sports leagues as well as the NCAA, the question of the legality of New Jersey’s sportsbook was brought all the way to the United States Supreme Court. In 2017, the highest court in the land agreed to hear Christie v. National Collegiate Athletic Association (later re-named Murphy v. NCAA for New Jersey’s new governor).
In 2018, the court ruled New Jersey could go ahead with its proposed laws and in August of that year, the first sports bets were placed on the state. The only provision to come from the lawsuit is that bettors cannot bet on college athletics played in the state or on any New Jersey college team.
The passage of this law came at the perfect time for New Jersey and it coincided with and helped create an explosion of sports betting in the U.S. In 2019 alone, there was over $4.5 billion bets on sports just in New Jersey. Of this sports betting windfall, around $3.8 billion of the total were placed through mobile sports betting apps.
Once again, New Jersey had perfectly positioned itself as a leader in the United States gambling market. As media and technology make all types of sports betting easier and things like in-game wagering and daily fantasy sports grow, New Jersey is now THE place to go in the U.S. for mobile sports gambling.
Why did New Jersey become the gambling capital of America? They did it because they had the history and they parlayed that into being on the cutting-edge of new gambling technology in the 21st century. Yes, Vegas is still Vegas but while the west coast gambling hub has transformed into a 24-hour-a-day party spot and a family vacation destination, New Jersey has doubled down on gambling and hit it big.
Both online gambling and sports gambling are on an incredible upward trajectory with no end in sight. With the 2020 COVID pandemic restricting or even outlawing people in land-based casinos or at sporting events, these forms of remote gambling have become even more successful and a vital form of entertainment in these unpredictable times. What’s next in the gambling world? No one knows for sure but what you can bet on is that whatever it is, New Jersey will be leading the way.