NJ's Top Gambling Regulator: Offshore Books Will be 'a Significant Competitive Force' in US Sports Betting Market

• A few dozen internationally-licensed sports betting sites will be competiting for players in NJ market
• NJ Division of Gaming Enforcement Director David Rebuck says these sites are operating illegally in state
• Admits there is not much that can be done but will apply pressure to suppliers who are "double dealing"

Legal Sports Report sat down with New Jersey's top gambling regulator, New Jersey Division of Gaming Enforcement Director David Rebuck, and the discussion turned to competition from international sportsbooks operating in the legal NJ sports betting market.

A few dozen such companies operate websites still accessible to those living and visiting the state of New Jersey.  Some have been taking bets from NJ residents for over 20 years now.

“They [illegal markets] are very robust, they’re very good at what they do, and they’re very successful,” Rebuck said. “They’ll be a significant competitive force to the success of the legal market expanding in the United States.”

Rebuck admitted his state alone can't do much to quash the industry.

“I’ve had dialogue with other states already,” Rebuck told LSR. “This is going to be an issue for us to deal with cooperatively. One state can’t do it by itself, one agency can’t do it by itself. Not only as state regulators but we need to be involved with the industry, with law enforcement (local, state, and federal) we need to come up with a new game plan.”

“I will be soliciting suggestions from a lot of people who want to be in the legal market as to what we can do and can’t do,” Rebuck added. “That includes payment processors, banking institutions, a lot of people involved in not wanting to this occur.”

The international sports wagering industry have long argued that they have every right to operate in the United States since casino and horse gambling is legal in most places and that few laws stipulate online betting to be illegal. 

When the state of Washington became the only jurisdiction to pass a law making it a Class C felony to place an online bet, most sites stopped accepting customers there.  A handful stopped doing business in Utah as well, noting that to be one of only two states where all forms of gambling, state lotteries included, are illegal. 

With sports betting, the US Supreme Court ruled against decades long prohibition back in May.  This has allowed more wiggle room for offshore sports wagering firms to argue "unfair competition".  The World Trade Organization has already done so on behalf of Web gambling jurisdiction Antigua.

Instead of going after these companies, Rebuck intends to crack down on suppliers who are caught "double dealing" (doing business with both New Jersey licensed sites and the offshores).

“If you’re in the industry as a supplier of goods and services to an operator in the United States, we’re going to look very critically at your company and product if you’re directly or indirectly providing those goods and services to the illegal sector," he tells LSR.

“I can’t prove it’s happening.

“I hope it’s not happening.

"But, we’ve at least notified those entering into the legal world in New Jersey that they better engage in strong compliance efforts on their end to be very clear that their products are not being used by illegal operators.”

Rebuck noted the importance of educating the public, telling LSR he has already reached out to broadcasters asking that they not reference Bovada's lines when discussing upcoming game previews. 

“We reach out to the local publication or the team and say, ‘do you realize Bovada is an illegal gambling site?’ Could you at least use Caesars, MGM, Wynn, I don’t care, get their line, they’re legal.”

Rebuck made it clear his number one focus, and the rest of the gaming sector in New Jersey, is to get their own sports betting venues and platforms up and running.

“We haven’t been able to throw a lot of resources [at the illegal market] other than to begin to plan for how we’re going to do it.

“I think we have a lot of support, but the proof in this in the long run is going to be out actions and our efforts as we move into the future.

“I wouldn’t expect anything other than what we’re subtly doing behind the scenes right now.”

Rebuck, having worked in the Attorney's General office, left the door open just a crack for enforcement action against what he called "the bad boys" operating illegally in New Jersey, but again retterated any action would primarily be against suppliers such as payment processors. 

“We’re never going to eliminate them (the offshore gambling sites), but we can put pressure on them to make life a little more frustrating for them as the blatantly operate in the market today."

- Gilbert Horowitz, Gambling911.com