The letter from the NJ Department of Gaming Enforcement comes in the wake of Australia tightening its restrictions online gambling. The law enacted this summer made the country even more of a gray market for iGaming and resulted in many online poker and gaming operators and platform providers to leave the country.
New Jersey regulators now consider Australia a black market, according to a letter dated Sept. 29.
It’s not clear how or if this will impact the current environment in New Jersey, but several companies licensed in New Jersey do appear to serve Australia in some way.
First, some backstory. Back in 2016, the NJDGE published an advisory bulletin titled “Impact of Operations in Grey Markets on Suitability for Licensure.”
That was part of New Jersey’s ongoing efforts to stop operators and platforms from serving both NJ and markets that where online gambling laws were “ambiguous.” That effort led to an agreement with the Kahnawake Gaming Commission to stop internet gaming sites that are not licensed in New Jersey from serving the Garden State.
Fast forward to today, and Australia is working with NJ regulators on making sure operators and platforms are not active in both Australia and NJ.
A letter from the Australian Communications and Media Authority earlier this month called the issue of the new Aussie online gambling law to the attention of NJDGE director David Rebuck.
Without naming names, ACMA Acting Chairman Richard Bean asks Rebuck to take action, referencing the 2016 bulletin.
…we would appreciate your assistance in informing online gaming operators licenses in New Jersey about the above changes so they can take the necessary steps to ensure they are not at risk of contravening, or facilitating a contravention of, Australian law.
The letter from Bean makes no suggestions on further action.
Rebuck stirred to action two weeks later, with a letter to the “Internet Gaming Counsel” for companies that are licensed in the state.
In that letter, Rebuck references the contact from Australian authorities and the aforementioned bulletin on “grey markets,” noting that “continued operations in a black market will affect a company’s suitability for licensure in New Jersey.” He also said “the Division new considers Australia a black market” for online gambling services.
More from the letter, in which Rebuck doesn’t mince words:
…every online gambling company that conducts business in New Jersey must comply with Australia’s new laws and cease offering all prohibited services to customers in Australia. Failure to do so many result in the Division taking regulatory action against your company, including finding your company unsuitable for licensure in New Jersey.
The ultimatum is issued to both B2B and B2C companies in the online gambling space. Rebuck asked the companies to explain continued operations in Australia (if they currently serve the market) and to offer what steps they have taken to comply with the law.
You can see the full letter and the letter from Australian regulators here.
“I think it makes sense for the DGE to ensure its licensees are not operating in black markets,” gaming attorney Jeff Ifrah told Online Poker Report. “As to grey markets, DGE states it will accept notification by a grey market as sufficient evidence that gaming is illegal in that foreign jurisdiction, and that is what DGE said happened here regarding Australia.”
Neither letter mentioned any operator or platform provider by name. The letter from Rebuck likely went out to everyone in the NJ market. But it’s clear that this likely impacts someone, as Australia and the DGE are not chasing their tails here for no reason.
It’s not clear which, if any other platform providers, could be impacted.
The news, interestingly, comes as Scientific Games acquired NYX, likely with an eye toward the US market.
GVC, which is also in New Jersey, similarly has a lot of integrations.
Presumably any impacted gaming companies will choose to abide by NJ’s request and cut ties in Australia, rather than risk being labeled a bad actor in a regulated US market. Such a move could have a negative impact in other states that eventually legalize online poker and casinos.