How Online Gambling May Come to New Jersey

Atlantic City, N.J. is having a tough time these days. Gambling revenues are down about 40 percent in just the last seven years. Super Storm Sandy didn't help either. (Read More: Atlantic City Casinos Shut After Sandy Roars Ashore.)

But now, something might help in a big way.

On Thursday, New Jersey Gov. Chris Christie vetoed a bill that would legalize online gambling in the state. But in his rejection, he laid out a clear path to its eventual APPROVAL.

He told the State Assembly that if a few things were changed in the bill, he would support it.

Gov. Christie wants a 10-year trial period, so that the success or failure of the initiative can be reviewed. He also wants to tax revenues at 15 percent instead of 10. And finally, he wants more money committed to dealing with addiction.

None of the three were considered onerous, and the amendments are expected to be incorporated.

This serves as an about-face by Christie, and the reason is clear: Atlantic City.

"Since the beginning of my administration, I have stressed the importance of reversing the trend of economic contraction in Atlantic City and have made the revitalization of the region's gaming and tourism industries a key priority," he wrote to the State Assembly.

Bertrand Langlois | AFP | Getty Images

If this becomes law, New Jersey would be the third state to move forward with online gambling.

(Read More: Donovan: Will Companies Cash in On Internet Gambling?)

It would enable people in New Jersey to play games like poker and blackjack for money. Residents in states where it's also legal— Delaware and Nevada right now—would possibly be able to gamble online through New Jersey-based websites.

The result would be revenue from the gaming, as well as actual jobs.

Reportedly, two British companies—888 Holdings and Bwin,Party Digital Entertainment—both have deals in place to service the industry in New Jersey and stocks for both soared Friday on the news.

The business could bring hundreds of millions in economic activity to the Atlantic City casinos at a time when business is down, and competition from other states is up.

For online gambling, New Jersey would get the advantage of being one of the first in.

"I have concluded that now is the time for our state to move forward, again leading the way for the nation, by becoming one of the first states to permit internet gaming," Christie wrote.

—By CNBC's Brian Shactman; Follow him on Twitter: @bshactman