NJ and sports betting contemplate the future of esports

The repeal of the Professional and Amateur Sports Protection Act (PASPA) by the US Supreme Court last year made sports betting legal in the eyes of the federal government and left regulating it at the state level (Murphy v. National Collegiate Athletic Association, 138 S. Ct. 1461 (2018)). New Jersey lawmakers quickly passed Assembly Bill 4111 with sports betting regulations including what seemed like a ban on esports events (see link).

A prohibited sports event includes all high school sports events, electronic sports, and competitive video games but does not include international sports events in which persons under age 18 make up a minority of the participants.

The bill was then signed into law on June 11, 2018 by Governor Murphy. Two days later, the New Jersey Department of Gaming Enforcement put out emergency regulations concerning the law and specifically, esports (see link). These regulations revised the definition of a “prohibited sports event” to mean “includes all high school sports events, including high school electronic sports events and high school competitive video game events, and any electronic sports event in which any participant is 17 years old or younger.” This change prohibits any esport event from having participants under the age of 18.

The change opened up room for esports betting to take place in New Jersey. However, as Lars Lien, CEO of esports betting start-up Luckbox commented: “While it’s still unclear exactly how the new laws will be interpreted, the fact that esports might be included is fantastic news. If indeed New Jersey will allow operators to offer regulated esports betting, it is another important step towards ensuring that the esports community is served by operators with the highest standards of player protection.” (see link)

Based on an investigation and discussion with Assemblyman Mazzeo and members of the Division of Gaming Enforcement (DGE), the existing regulations allow wagering on e-sports, but no retail or online operator has requested approval or authorization from the DGE to accept wagers on e-sports. The current regulations conceptually allow the promotion, scheduling and wagering on e-sports, however, such a "Request" would have to be examined before the requesting entity (e.g., William Hill and Ocean Casino) could start accepting wagers. We are collaborating with multiple entities to establish rules/regulations with the DGE and Assemblyman Mazzeo's office (e.g., NJ legislature) and we are partnering with gaming companies and casinos such as William Hill to submit a "first" Request on their behalf. The Request will describe the event which would be reviewed (by the DGE) to be in compliance with the established rules/regulations regarding any integrity policy that covers the participants and also whether the event itself was appropriate for wagering. Upon establishing the required "rules," we will provide guidance and counsel to professional e-sports leagues to contract for events.

The addition of esports gaming and wagering in New Jersey is an untapped source of revenue and will provide commercial exposure to gaming which has been established around the world and will soon find its way to the United States. Image by JESHOOTS.com on Stocksnap.io

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