New Jersey Online Gambler Must Repay Out-of-State Winnings

Online Gambling Caesars Borgata Payback

Caesars Atlantic City (pictured) and Borgata each might face fines for allowing the gambler to bet online while out of state.

An online gambler who gambled online in New Jersey while being outside the state must pay back $93,000 in winnings. The gambler, Vinh Dao, is from California, but geolocation software proved they were a few miles outside New Jersey when he played online.

If a player is located outside a state when they gamble at a New Jersey online casino or poker site, geolocation software similar to the GPS system in cars is supposed to block a player from New Jersey gambling sites.

The case happened in early 2014, in the months after the November 2013 rollout of New Jersey online gambling. At the time, operators and regulators were improving the geolocation software used by sites to assure interstate gambling does not happen.

Within a few months, geowall software developers perfected their technology and closed any loopholes, but some players like Vihn Dao had engaged in illegal gambling by that point. The geolocation software issues were part of a troubled launch for New Jersey online gambling, which many blamed for disappointing revenues in its early stages.

Won $93,000 Gambling Online

The Division of Gaming Enforcement (DGE) says Vinh Dao played at sites connected to Caesars Atlantic City and Borgata. Between the two sites, he won roughly $93,000, but that money is forfeited if subsequent investigation shows the player violated state laws.

Vinh Dao negotiated the terms of his payback with the Division of Gaming Enforcement. Mr. Dao was able to keep $2,500 of his winnings, but agreed to pay back $93,000 of his winnings.

The casino operators involved may have to pay fines for allowing Vinh Dao and others to play illegally, but the DGE has not assessed any fines or issued a report about Borgata’s and’s role in the incident.

New Jersey’s Digital Fence

The geowall or “digital fence” New Jersey and other states use to enforce intrastate online gambling laws have been a source of debate and controversy since legal online launched in Delaware, Nevada, and New Jersey in 2013. Those who supported Restore America’s Wire Act, an attempt to ban online gambling in all 50 states at the federal level, complained that New Jersey online gambling left residents in other states open to the dangers of online gaming losses and problem gambling.

In a famous hearing, U.S. Sen. Lindsey Graham (R-South Carolina) claimed that residents of South Carolina could access New Jersey online casinos with their smartphones. Therefore, argued Sen. Graham, New Jersey was imposing its progressive gambling laws on the people and government of South Carolina.

Does GPS Technology Stop Interstate Online Gambling?

This was not the case, which was proven when the two sides appeared before Congressional committees to debate the pros and cons of regulated online gambling. Senator Graham, who famously does not use the Internet, seemed to conflate unregulated offshore online gambling sites with New Jersey’s licensed and regulated industry, claimed GPS technology could not block gamblers from playing at out-of-state websites.

Because most of the senators on the sub-committee — and because most of the representatives on Jason Chaffetz’s House sub-committee — knew how dependable GPS technology was from their automobile’s systems, the argument did not work. In time, a consensus grew that New Jersey’s digital fence worked just fine — but the early problems did not help matters any.

In the 5 years since, numerous European countries have instituted IP blocks on illegal gambling sites’ domains through recruiting private ISP’s to erect a firewall. Switzerland, Romania, Georgia, Armenia, and Latvia are only some of the countries which have proven that digital fences work. Yet the Division of Gaming Enforcement continues to clear cases from 5 years ago, like Vinh Dao’s case.

New Jersey Online Gambling Laws

Players from California are allowed to play at New Jersey sites, but they physically must be inside the state when they do so. Conversely, New Jersey residents cannot gamble at Atlantic City online casinos if they are outside the borders of New Jersey.

In 2014, Atlantic City casinos won $120 million, but that was before sites like Resorts Casino’s PokerStars and Golden Nugget’s PlaySugarhouse launched. Last year, the New Jersey online gambling industry generated nearly $300 million in revenues.