New Jersey Legislature Approves Sports Betting Bill

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Monday, June 30th, 2014 | Written by Shane Larson

One week after the US Supreme Court refused to review New Jersey’s sports betting argument, the state Legislature has gone on ahead and passed a bill that could pave the way for sports betting at casinos and horse-racing tracks across the state.

On Thursday, both chambers of the New Jersey legislature voted in favour of the State Senator Raymond Lesniak sponsored bill (S2250/A3476), with the state Senate approving it by a vote of 38-1, and The Assembly by 63-6-2. Commenting on what the bill could mean for New Jersey’s waning gambling industry, Assemblyman and chairman of the Assembly’s tourism and gaming committee, Al Caputo (D-Essex),
said:

“We are in desperate need of innovative ideas to combat the continues downturn in New Jersey’s gaming industry in both Atlantic City and at our racetracks. This is an opportunity to kick-start this industry in a way that is unprecedented along the East Coast and generate substantial revenue for our state as a whole.”

NJ sports bill rejected

A federal law entitled The ‘Professional and Amateur Sports Protection Act‘ (PASPA) was introduced in 1992 and limited sports betting to just four states, namely Nevada, Delaware, Oregon and Montana. At the time New Jersey was also give one year grace to join the exclusive group of states, but subsequently failed to sign on to the act thus putting its gambling industry at a disadvantage ever since.

In 2011, however, NJ Gov. Chris Christie signed a state approved sports wagering bill into law, which he said would generate at least an extra $100 million in much needed annual revenues. The move immediately drew a backlash from five of the biggest sports leagues in the US (the National Collegiate Athletic Association, Major League Baseball, the National Basketball Association, the National Football League, and the National Hockey League), who subsequently blocked the law from being implemented, culminating in two federal courts siding with the sports leagues and now the U.S. Supreme Court refusing to hear New Jersey’s appeal.

Time to move on?

After the Supreme Court announced its decision, NJ Gov. Christie appeared ready to capitulate on his two-year legal battle, commenting: “It’s always a long shot to get certiorati from the United State Supreme Court. That’s the way it goes. They said no, so we have to move on.”

State Senator Raymond Lesniak, on the other hand, seemed less inclined to throw in the towel, especially as it appears the U.S. Justice Department may have given the state an alternative lifeline by suggesting the federal law does not “obligate New Jersey to leave in place the state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPA’s enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part.”

Therefore, Lesniak’s new bill aims to repeal New Jersey‘s old state laws banning sports wagering, and permit private companies to run sports wagering operations which do not require state regulation. As Lesniak, explains:

“They invited us to do this. They said, ‘We’re not interfering with state’s rights. Go right ahead.’ ..The purpose [now] is to get sports betting going at our casinos and racetracks as soon as possible without interference from the federal government or anyone else.”

Ball back in Christie’s court

In order to progress, NJ State Senators Lesniak and Jim Whelan’s bill must first be signed into law by Christie, but as of yet the Republican NJ Governor has not commented on whether he was prepared to revisit the issue. Already the state has spent millions of dollars trying to push its previous bill which failed, and even if Senate Bill 2250 (S2250) and Assembly Bill 3476 (A3476) do now pass, they are still likely to be legally challenged by the same groups who opposed NJ before.

Nevertheless, the overwhelming support of both houses, as well as the dire situation within the New Jersey gambling market, may compel Christie to continue the fight.

NJ desperately in need of gambling boost

When the Professional and Amateur Sports Protection Act was passed in 1992, the US gambling landscape was significantly different with Nevada, New Jersey and just a hand full of other states permitting gambling, none of which were located in the northeast.

Over the past few years, however, more and more states have embraced casino gambling as a way to balance state budgets and now almost 40 of the 50 US states allow casino gambling in one form or another. NJ also faces stiff competition from the neighbouring states of Pennsylvania, Maryland, New York, Connecticut and Delaware, and since 2006 the Garden State has seen its gambling revenues plummet from $5.21 billion to $2.86 billion in 2013.

In addition, online gambling has not proven to be the windfall anticipated pre-regulation, and at the beginning of this year the Atlantic Club shut its doors, with the Showboat Casino now expected to follow suit in August. Furthermore, the $2.4 billion Revel Casino, once touted as a possible lifeline for the state, has recently applied for a second bankruptcy, making it less likely NJ Gov. Chris Christie can simply walk away from the golden opportunity to sign the new bills into law and expand into the lucrative sports wagering industry. Commenting on the situation, State Senator Raymond Lesniak, said:

“This is, quite frankly, their [casinos] only hope. They’re going to continue to decline. We will continue to lose jobs.. [I’m disappointed the Supreme Court] would allow Las Vegas to be jam-packed [with bets] during the Super Bowl and Final Four weekend, while Atlantic City is a ghost town.”