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Hoping Web gaming adds jobs, capital investment

Some ancillary industries, such as law, already making hires; other firms look to locate or build data centers in South Jersey

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‘You’re seeing some very interesting people coming into this space,’ says Gilbert Brooks.
‘You’re seeing some very interesting people coming into this space,’ says Gilbert Brooks. - (AARON HOUSTON)

Boosters of online gaming have long said it would spur business growth outside the walls of Atlantic City's casinos, and that was evident on a recent Sunday at a Cherry Hill law office.

That's where Gilbert Brooks, a partner with Duane Morris LP, was holed up June 30 as he put the finishing touches on a deal forming a partnership between one of his casino clients and an Internet gaming operator, one of several assignments he's had related to what will be the state's newest wagering platform.

“It was nice to have some activity in that regard,” Brooks said. “And I think that you're seeing some very interesting people coming into this space.”

New Jersey won't go live with Internet gaming for more than four months, but insiders say there are early glimpses of how the rollout will boost job creation and economic development. And where there are not yet tangible signs, regulators say growth is on their minds as they develop guidelines for the new industry.

“Jobs will be created as soon as the license gets granted — you're going to see a big net job growth in our opportunity alone,” said William Pascrell III, a lobbyist for online gaming giant PokerStars.

The Isle of Man-based operator plans to open its North American headquarters in New Jersey, he said, and announced July 3 it's partnering with Resorts Casino Hotel to provide Internet gaming here, as required by the law enacted in February.

“This is sort of an opportunity for Stars to plant their flag,” said Pascrell, a member of Princeton Public Affairs Group, in Trenton.

PokerStars is certainly looking for a fresh start following its turbulent legal history with the federal government. The operator, a subsidiary of The Rational Group, paid $731 million last year under a settlement with the Justice Department, which shut down PokerStars.net and two other sites in 2011 over allegations that they tried to sidestep an anti-online gaming law from 2006. That could be an obstacle when New Jersey regulators consider its entrance to the market.

At least six other online gaming operators have announced partnerships with Atlantic City casinos, though it's not known whether they also would build a physical presence here. But the impact of the new platform is visible elsewhere: Brooks, the Duane Morris attorney, estimated his gaming practice has added around six clients since Internet gambling was legalized.

Before February, Brooks' gaming practice mostly consisted of licensing and financing assignments for the state's casinos, he said. But he now represents two of the land-based operators in negotiations with online providers, along with Internet companies who sought contracts with the gaming halls.

“There's been a healthy competition to score deals,” Brooks said. “There have been a lot of negotiations going on in terms of the Internet gaming operators, mostly in the area of financial arrangements.”

Meanwhile, the state's top gaming regulator is mulling whether to require Internet gaming companies and servicers, such as providers of age-verification software, to locate in New Jersey. Currently, they're only required to have a license from the state, provided they're partnered with one of Atlantic City's brick-and-mortar casino licensees.

Some casinos have warned such a requirement could delay the launch of online games, said David Rebuck, director of the Division of Gaming Enforcement.

The agency plans to add 25 people, most with accounting or IT backgrounds, Rebuck said, to “cross-train” and augment the teams that now oversee brick-and-mortar areas like revenue certification, patron complaints and technical services.

Regulators and operators have yet to decide how to set up the large blocks of servers that they'll need to run online poker, blackjack and other games from Atlantic City. Rebuck said the agency is exploring whether the casinos can find a central location, as opposed to setting up 12 separate data centers, but regardless of the outcome, the facilities will soon need to be constructed and staffed with human monitors.

Additional job prospects could depend on how far the casinos take their new platform, Brooks said. He pointed to “live deal” technology used by other online operators, in which human dealers are connected to players via streaming video.

“Live deal will require live dealers who will be on premises, so I think it could be very exciting,” Brooks said. “It could create some job opportunities that people haven't really been focusing on, depending on what the Internet gaming providers do.”

E-mail to: joshb@njbiz.com
On Twitter: @joshburdnj

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Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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