New Jersey Allows Casinos to Operate Fantasy Sports Contests

New Jersey Governor Chris Christie
New Jersey Governor Chris Christie signed a bill last month allowing casinos to take online bets in an attempt to help Atlantic City casino business. Photographer: Emile Wamsteker/Bloomberg

New Jersey will allow casinos in Atlantic City to run fantasy sports tournaments this year after an attempt to legalize betting on professional and college games in the state was blocked by a federal judge.

New Jersey’s Division of Gaming Enforcement today announced temporary regulations that will allow the casinos to accept entry fees and pay out winnings for fantasy sports games. The regulations will run for 270 days starting on April 22 with the intention of becoming permanent, according to the release.

“The casinos’ vast customer base and the ability to have contest winners utilize the casino cage to accept entry fees for fantasy sports tournaments and pay out winnings resulting from those tournaments provides an exciting opportunity to bring fantasy sports tournaments to Atlantic City,” Division Director David Rebuck said in the release. “We see this as an added amenity and beneficial to the casinos and their customers.”

Governor Chris Christie signed a bill last month allowing casinos to take online bets in an attempt to help Atlantic City casino business.

A fantasy sports tournament, as defined by the regulations, is a simulated game involving athletic events in which a patron manages an imaginary sports team and competes for a prize against teams put together by other patrons. This includes the traditional season-long leagues or single-day tournaments.

There were 33 million fantasy sports participants in the U.S. last year, roughly 10 percent of the country’s population, according to the Fantasy Sports Trade Association. That number has more than doubled since 2007, according to the organization’s data.

Not Gambling

The fantasy sports tournaments won’t be considered “gaming” or “gambling” as defined by state laws, and entry fees won’t result in revenue for the state, according to the regulations. The main purpose of the regulations will be to help casinos expand their customer base and draw more people to Atlantic City.

The city’s 12 casinos generated $3.05 billion in revenue last year, down from a peak of $5.2 billion in 2006.

Paul Charchian, president of the trade association, said the regulations will benefit the entire industry, including daily fantasy sports operators like FanDuel and DraftStreet, and the casinos.

“It’s going to give a great boost to casinos as it gives an opportunity for sports participation in casinos that can’t offer traditional sports betting,” Charchian said in a telephone interview.

Today’s announcement comes less than three weeks after a federal judge in New Jersey threw out a law signed by Christie to legalize sports gambling at racetracks and Atlantic City casinos.

Gambling Opposition

That law was opposed by a group including the National Collegiate Athletic Association and the four major North American professional sports leagues. They sued to block the legislation, saying it undermined the integrity of professional sports and contradicted a 1992 federal law requiring states to restrict sports betting. New Jersey has said it will appeal.

Tony Rodio, president of the Casino Association of New Jersey, was unavailable to comment on the new regulations, according to spokesman Jon Bombardieri.

National Football League spokesman Greg Aiello, National Basketball Association spokesman Mike Bass, Major League Baseball spokesman Pat Courtney and National Hockey League spokesman Gary Meagher declined in separate e-mails to comment on the regulations or whether their leagues would oppose the changes.

NCAA spokesman Erik Christianson didn’t immediately respond to similar attempts for comment via e-mail and a message left at his office.

League Opposition

Charchian said he didn’t expect there to be similar opposition from leagues because it isn’t gambling and the leagues recognize the value of fantasy sports. Some run fantasy leagues on their own websites.

Under the regulations announced today, casinos will be allowed to run fantasy contests either by themselves or through fantasy sports providers, according to the release. The minimum age for participation will be 21 years.

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