New Jersey Sportsbetting Case Denied Supreme Court Appeal, New Bill Introduced

New Jersey officials continue to be stymied in their efforts to introduce full-scale, state-regulated sportsbetting in a second US state.  On Monday, the United States Supreme Court denied a writ of certiorari in three cases connected to the state’s efforts to regulate betting on pro and college sports, meaning that the nation’s highest court won’t accept the case.

That leaves in place a federal district appellate court decision in favor of the sports organizations that had sued to block New Jersey’s law.  The law itself was based on a late 2011 referendum approved by voters, then modified by legislators and signed into law by New Jersey Governor Chris Christie in 2012.

That law is essentially dead, according to the district court’s decision, which was left to stand.  The decision in that case declared that the 1992 Professional and Amateur Sports Protection Act [PASPA] would remain in effect: New Jersey’s claims that the law was unconstitutional, a restraint on free trade and an infringement on historic American “states’ rights” principles regarding gambling were all dismissed in favor of keeping the law in place.

The five sports organizations who sued to block New Jersey’s sportsbetting plans were Major League Baseball, the National Football League (that’s American football, not soccer), the National Basketball Association, the National Hockey League and, at the college level, the National Collegiate Athletic Association (NCAA).  The five were assisted by the federal-level Department of Justice and by Washington D.C. legislators in their efforts to keep PASPA intact, over claims that New Jersey’s plans could compromise the integrity of their respective sports,

Integrity claims or not, one of the arguments in favor of the five sports organizations that sued to stop the New Jersey law was that New Jersey itself had a chance to authorize legalized sports betting way back in 1992, when PASPA was enacted.  It’s true now that had it done so, the state would have saved itself all the fuss of recent years.  When PASPA was created, Nevada’s already-established sportsbetting industry had to be grandfathered in under the same “states’ rights” protections that New Jersey sought to implement here.

However, the critical point in the case was that back in ’92, New Jersey didn’t see the pressing need, and passed on a one-year window implemented within PASPA’s enactment that allowed other states to join Nevada.  Three other US states also had authorized very limited forms of sports betting by 1992 – Oregon, Delaware and Montana – and the activities (generally parlay bets involving several pro games, with a high, state-banked house advantage a la lotteries) were also protected under PASPA.

That would have been New Jersey’s chance.  But back then, the state’s gambling mecca of Atlantic City was a true East Coast resort destination.  Today the town and the state’s gambling industry are awash in a sea of red ink, besieged both by rival casinos in neighboring states and by Atlantic City’s own rundown appearance, poor accessibility and sagging reputation.

Still, billion-dollar resort casinos don’t close without a fight.

The failure of the state to enact its previous law means that a far riskier legislative may be the casinos’ only hope to bring sportsbetting to New Jersey, and to that effect, a brand new bill has just been introduced.  The bill, S2250, features New Jersey state senators Ray Lesniak and Jim Whelan as primary sponsors, and would in effect allow sportsbetting in the state by declaring the activity legal in casinos and at the state’s racetracks.

The hidden catch is this: New Jersey itself can’t regulate the betting activity, since the state gave up its regulatory rights by not taking advantage of the old regulatory window two decades ago.

Bill sponsors Lesniak and Whelan are noted proponents of the state’s gaming industry, and it’s quite likely that many other legislators will again rally to the New Jersey sportsbetting cause.  But will moderate Republican governor Chris Christie, who is still eyeing a bid at the US presidency, again sign on in support of a bill?  Particularly since the only way for New Jersey to nullify PASPA is to give up its own gaming-industry protections, regulatory oversight, and tax revenue?

That’s a lot to ask.  It’s not quite the slam dunk pro-casino legislator Lesniak makes it out to be.

Senator Lesniak’s office issued a prepared statement today while introducing S2250 just a couple of hours after the US Supreme Court issued its notice that it would not accept an appeal on the PASPA-related case, a sure sign that the state already knew that their long-shot gambit had failed.  The Supreme Court accepts less than 1% of the cases submitted to it for possible acceptance, and the three intertwined cases here were all listed among hundreds that the court chose to pass on in its latest list of court business.

According to the statement, which was sent to several local outlets, Lesniak said, “[W]we do not read PASPA to prohibit New Jersey from repealing its ban on sports wagering. Under PASPA, ‘[i]t shall be unlawful for… a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact’ a sports wagering scheme.”

“Nothing in these words requires that the state keep any law in place,” added Lesniak, in the presser.  “All that is prohibited is the issuance of gambling ‘license[s]’ or the affirmative ‘authoriz[ation] by law’ of gambling schemes.” 

Lesniak compared the situation to the ongoing legalization of marijuana in many US states, particularly in Colorado; both the sale and purchase of the drug remain illegal under federal law but federal authorities have yet to step in and attempt to stop the practice.  This said, in the case of so-called “statement” arrests, the feds have demonstrated an occasional willingness to arrest large-scale providers of medicinal marijuana in other US states.  Lesniak’s comparison isn’t quite apples-to-apples.

Whether his S2250 will pass is another matter.  The bill’s simple description states, “Eliminates statutory prohibitions against sports wagering at racetracks and casinos in New Jersey.”  That it does.  Whether the terms of dropping that existing prohibition are too politically poisonous will be the ultimate question, as S2250 moves forward.

Haley Hintze

Veteran poker writer and editor Haley Hintze offers a uniquely independent and entertaining look at many of the most newsworthy topics in poker.  Noted for her lengthy series that helped expose the cheaters behind the Absolute Poker and UltimateBet scandals, she remains a champion of consumer interests and fair play.

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