Illegal Sports Betting Site Shutdown in New Jersey
Unless you have been living under a rock with no access to the outside world, then you know for an online gaming site to function in the United States legally, it must be licensed in a regulated state. When a site is operating without a license or in a state that does not allow such operations, it is conducting an illegal business. Just recently, a site was shutdown in New Jersey after it was discovered the operator was not licensed to offer sports betting services.
No License? No Operation!
BetOpenly.com launched in the Garden State in early August, offering players a wealth of sports betting options. The California-based company was not licensed to offer services, but that did not stop them from offering bets.
It was not long before the New Jersey Division of Gaming Enforcement realized that the site was illegally offering sports betting and they quickly shut them down. According to PlayNJ.com, the New Jersey Assistant Attorney General Louis S. Rogacki sent a letter to Open Games LLC dated September 5th to provide a clear explanation of the law.
The letter clearly states that the Division of Gaming Enforcement accessed the website and found that it was offering unauthorized sports betting to residents in New Jersey, along with residents in other states, which is in violation of the Casino Control Act, N.J.S.A. 5:12-1.
The letter was sent to the company as well as the Bureau of Gambling Control in California and the state’s Gambling Control Commission. They notified BetOpenly that they are operating in contradiction to the federal law and New Jersey state law.
The letter requested that the site stop facilitating wagers between patrons and place a disclaimer on the site to that effect. If the site does not comply, then the state may choose to pursue civil or criminal sanctions.
Rules of Sports Betting Operations
In New Jersey, to operate an online sportsbook, a provider must have a partner that has a land-based gaming license, be it a racetrack or a casino. Take for example the DraftKings Sportsbook. They are partnered with Resorts Atlantic City and operate via the brand’s online gambling license.
BetOpenly did not comply with this rule and was offering services despite the regulatory system. The brand thought they could beat the system by offering a way to wager that essentially skips the house feels. The concept of the site is to allow users to create wagers on a game at any odds for another user to accept.
With traditional sports betting in the state, sites like DraftKings or William Hill NJ will charge customers a fee when they lose. BetOpenly used a different format and allowed players to send bets via email or texts.
The site had only been operational for a short time and when the letter from the Division of Gaming Enforcement was sent, only around 400 users were active on the site.
So, what happens now? BetOpenly has received the letter and has been nicely asked to comply. It is unclear as to if they have a certain time frame in which to shutdown the site before the Division of Gaming Enforcement will take further action.
If the brand is smart, they will stop while they can before they face any type of punishment such as fines or legal action. It seems they thought a work-around existed in the law, but New Jersey regulators do not play around when it comes to their online gambling operations and they will continue the fight against the company if need be.