New Jersey Lawmakers Push To Change Rules For Dormant iGaming Funds

A bipartisan group of New Jersey legislators has proposed a new bill that would alter how funds in dormant iGaming accounts are managed. The legislation, spearheaded by Assemblymen Robert Auth and Joe Danielsen, with co-sponsorship from Assemblymen Sean Kean and John DiMaio, aims to provide greater transparency and fairness in the handling of unclaimed funds from inactive accounts.

Currently, under New Jersey law, unclaimed funds in dormant online casino accounts are split equally between the casino licensee and the state’s Casino Control Fund. The proposed legislation, Senate Bill 152, seeks to amend these rules, designating such funds as unclaimed property under the “Uniform Unclaimed Property Act.”

If passed, the measure would transfer unclaimed funds to the state’s unclaimed property program after three years of inactivity. This means that account holders would still be able to reclaim their funds through the state.

The bill also imposes new obligations on casinos and iGaming operators to contact account holders before closing dormant accounts. Operators would be required to reach out via mail, phone, and email to notify users of their account status and provide an opportunity to reactivate or withdraw the funds.

The introduction of this bill comes at a time when iGaming has become a critical driver of revenue for New Jersey’s economy. In October, online gaming outpaced in-person casino gambling for the first time since COVID-19 forced Atlantic City’s casinos to close for multiple months in 2020.

According to October data from the New Jersey Division of Gaming Enforcement, online table games and slots produced $213.6 million in revenue. This beat the $208.7 million Atlantic City’s brick-and-mortar casinos reported.

Comparing New Jersey’s approach to other states

If enacted, New Jersey’s proposed law would differ significantly from regulations in other states with legalized online gambling. For example, in Michigan, accounts that remain inactive for one year are classified as dormant, and any remaining funds are subject to forfeiture by the state.

Pennsylvania’s rules offer a middle ground. iGaming accounts in the state are deemed dormant after two years of inactivity. Operators must notify account holders after one year of dormancy, and any funds remaining in dormant accounts are considered abandoned if the player does not request a withdrawal within 60 days of receiving notice. These funds are then reported to Pennsylvania’s Bureau of Abandoned and Unclaimed Property.

New Jersey’s proposed three-year dormancy period is more lenient, providing users with additional time to reclaim their funds. Furthermore, transferring unclaimed funds to the state’s unclaimed property program ensures a higher likelihood of rightful owners reclaiming their money, compared to outright forfeiture policies in states like Michigan.

As New Jersey continues to lead the U.S. in the online gaming industry, the proposed legislation seeks to strike a balance between industry growth and consumer protection.

By treating funds in dormant accounts as unclaimed property, the bill aligns with broader efforts to ensure transparency in how gaming operators handle unclaimed funds. Lawmakers have emphasized the importance of clear communication with account holders and fair access to unclaimed funds.