New Jersey Lawmakers Legalize Sports Betting at Casinos and Race Tracks
Both chambers of the New Jersey legislature voted overwhelmingly on Thursday to legalize sports betting at casinos and race tracks in the state. The legislation is a defies a U.S. Supreme Court, which Monday declined to see a case which might have overthrown a 22 year old federal sports betting law.
The Monday decision by the Supreme Court left in place Professional and Amateur Sports Protection Act of 1992, which says legal sports gambling can take place only in Nevada, Delaware, Oregon, and Montana. When the 1992 federal law was first enacted, New Jersey was given the right to sign on to the act, if New Jersey legislature enacted the proper laws within a year’s time. They did not, so Atlantic City casinos and race tracks have been operating at a disadvantage ever since.
New Jersey’s Argument
New Jersey’s leaders say the Professional and Amateur Sports Protection Act was an arbitrary decision to allow states to opt-in, but 1992 was not a special time in American history for gambling. If it made sense to allow New Jersey to operate legal sports books in 1992, then 2014 should be the same way. New Jersey regulators point out that illegal sports betting is a major social problem, with several illegal bookies busted in the past couple of years (who collected hundreds of millions of dollars between New York and New Jersey). Legalizing such practices not only would help the casinos and race tracks of New Jersey, but it would provide revenues for the state and marginalize the bookies.
U.S. Federal Government’s Argument
The U.S. federal government’s position is the Sports Protection Act was enacted at the time to stop the spread of sports gambling throughout the United States. The point was to limit the practice, thus making American professional and college sports safe from a proliferation of gambling (and therefore temptation to fix matches). The federal government believes, if New Jersey was given a loophole, then other states could opt to legalize sports gambling. Under those circumstances, sports betting would begin to spread throughout the states, like state lotteries have.
New Jersey’s Battle to Legalize Sports Betting
The state legislature previously enacted laws to bring approve sports books at the Atlantic City casinos. Organizations representing America’s top sports–including the NFL, MLB, NBA, NHL, and NCAA–sued the state of New Jersey to assure the state could not operate sportsbooks. This lawsuit made its way through the judiciary, and the state of New Jersey eventually referred the case to the U.S. Supreme Court.
When the court refused to hear the case on Monday, it seemed to be the end of the issue. Governor Chris Christie, who had championed the cause of the sportsbooks and once had even suggested flouting federal law, downplayed the decision and seemed ready to put the case behind him. When asked on Monday about the decision, Chris Christie said, “They said ‘no’ so we have to move on.”
Chris Christie Undecided on Support
Now the New Jersey Senate and NJ General Assembly have put the ball back in Christie’s court. He must decide whether to sign the legislation or not. At the moment, the governor has not signalled whether he is prepared to do so.
State Senator Raymond Lesniak, a longtime supporter of the New Jersey gambling industry, says the federal government should allow New Jersey to have sports gambling. He cited the cases of Washington and Colorado, which were allowed to legalize medicinal marijuana, despite federal bans on marijuana.
Atlantic City in Trouble
When the Professional and Amateur Sports Protection Act of 1992 was put in place, Atlantic City casinos appeared to be stable businesses. At the time, only a handful of states allowed gambling. None besides New Jersey were in the northeast. In 2014, nearly 40 U.S. states allow land-based casino gambling of one kind of another.
Pennsylvania, New York, Connecticut, Delaware, and Maryland all allow some form of casino or race track gambling, whether it is lottery terminals or traditional slot machines. The inception of casino-style gambling in these states has hurt the New Jersey gaming industry. One way to restore Atlantic City to a position of prominence would be to allow them to operate sportsbooks, which would not be allowed at venues outside New Jersey.
In January 2014, the Atlantic Club closed its doors. The Revel Casino, which opened in 2012, is going through its second bankruptcy in 15 months. The Revel Casino needs a new buyer by August 18 or it will close its doors. The Showboat Casino announced yesterday it might have to close its doors, while Caesars Entertainment has suggested it might close one or more of its four casinos in the city. With 11 Atlantic City casinos left, the gaming industry of New Jersey appears to be in crisis mode. Under the circumstances, New Jersey politicians seem to believe it is worth the risk of challenging federal law in order to keep an important industry from falling apart.
