The lines are drawn for sports wagering in New Jersey.
On May 24 of this year, New Jersey Governor Chris Christie held a news conference, and announced the push for sports wagering at the state’s casinos and racetracks. “We intend to go forward and allow sports gambling to happen, and if someone wants to stop us, then they’ll have to take action to try to stop us.”
On Tueday in Federal Court in New Jersey, the NFL, MLB, NBA, NHL, and NCAA did exactly that, asking the court to stop the state from proceeding with the plan to offer sports wagering. They even included that very quote in the complaint, as an indication of New Jersey’s clear intent to allow sports wagering.
In the 12-page complaint filed against Christie, Director of New Jersey Division of Gaming Enforcement David Rebuck, and Racing Commissioner Frank Zanzuccki, the leagues claim that the January 2012 New Jersey sports gambling law is in direct violation of U.S. federal law. It goes on to claim irreparable harm to the public image of their sporting ventures if sports wagering is allowed to proliferate in the state of New Jersey, since it would undermine “the pubic’s faith and confidence in the character of amateur and professional team sports.”
The heart of the leagues’ argument is that the New Jersey law is in direct violation of the Professional and Amateur Sports Protection Act (PASPA). That act, championed by then New Jersey U.S. Sen. Bill Bradley, is a straightforward document comprising less than 1,000 words. It has four sections. The first section, 3701, includes definitions. The second section, 3702, makes sports gambling illegal. The third section, 3703, authorizes the U.S. Attorney General and sports leagues to file suit in federal court to stop sports gambling in violation of the law. That is what the five sports leagues did Tuesday in United States District Court of New Jersey.
The fourth section carves out the exceptions to the law.
The exceptions under section 3704 are for sports wagering programs that were already in operation before the law and wagering on animal racing and jai-alai. That protected existing sports wagering in Nevada, and also kept the door open for states to expand gambling on horse or dog racing. Section 3704 also allowed a special exemption. For a period of one year from PASPA going into effect, a government entity that had allowed casino gambling for 10 years previous to the law going into effect could authorize sports wagering that would then also be exempt from the law.
Without naming the state of New Jersey directly, this section of the law was a window to allow New Jersey to authorize sports wagering after the fact.
The sports leagues note as much in their complaint. “New Jersey was afforded the opportunity to authorize sports betting,” the complaint notes. “New Jersey declined that opportunity.”
As a result, the complaint goes on “under the plain terms of PASPA, New Jersey is expressly barred by federal law from sponsoring, operating, advertising, promoting, licensing, or authorizing sports-based gambling.”
The complaint asks the court to declare the New Jersey Sports Gambling Law a violation of PASPA, to order New Jersey to stop the process of allowing sports gambling, and to order New Jersey to pay attorneys’ fees for the leagues.
In 2009, it was the sports leagues who also stepped in to stop Delaware in its plans to offer Las Vegas-style sportsbook wagering at its three casinos. As the leagues sought an injunction to halt the state’s plans, the U.S. Court of Appeals for the Third Circuit handed the sports leagues an unqualified victory by declaring Delaware’s plans in violation of PASPA. As a result, Delaware was allowed to offer merely the same type of sports wagering it had tried for one year as a lottery game prior to the federal law, parlay betting on NFL games only.
Very informative site and news story, Mr. Ordine.
I wonder if you would care to give us you opinion as to whether this episode was posturing for possible sports betting NEXT season. Seems there was no way betting would get implemented in the timetable outlined by Gov. Christie. Was this a preliminary fight for a major battle next spring, and possible wagerin on the NFL in NJ for start of 2013?
Thoughts?
Maybe so, Nolan. It was going to be very difficult to establish sports wagering so quickly, and NJ had to know they were in for a fight from the NFL and NCAA at least.
It’s tough to see how this gives NJ any kind of edge over a long period of time. If they win this fight, it opes the door for other jurisdictions to offer sports wagering, too. And Delaware for one has shown to be nimble about offering expanded forms of gaming, as they did with online gambling.
Nolan,
This is Bill Ordine. Among the the complexities is that one of the gaming organizations who are permitted to offer sports wagering, a casino or race track, has to be willing to do just that. It appears that some are reluctant to offer sports wagering because they don’t want to be the lightning rod that attracts the bolt from the federal government. And for those gaming organizations that have places of business in multiple jurisdictions, they may have concerns that trouble as a result of what they do in New Jersey could affect their licensing in other places. So that will be the interesting next step … who goes first.