The future of New Jersey sports betting depends on the state’s governor

Lesniak and other lawmakers say taxable casino-hotel revenue would spike as people flocked to New Jersey gambling halls to bet on sports. In June, Lesniak told The Press of Atlantic City that Monmouth Park racetrack was prepared to take sports bets in time for the 2014 NFL regular season. The first bet, he said, would happen September 8: “I would place a bet on the Giants to cover the spread over the Lions.”

That wager, he said Thursday, could change depending on how the G-Men fare against the Steelers in the pre-season. But he said the principle behind it won’t: “New Jersey has a right to have what Las Vegas has.”

The federal Professional and Amateur Sports Protection Act (PASPA) effectively bans sports betting outside Nevada, Delaware, Montana and Oregon; those states received exemptions to maintain betting operations in place before Congress enacted the law in 1992. New Jersey fought in court for years to overturn the ban, arguing that it unconstitutionally infringes states' rights to raise tax revenue and gives preferential treatment to certain states. But the NCAA and all four major sports leagues fought back.

They said sports betting taints honest competition by stoking suspicion among fans that bets are affecting games. PASPA rightfully bans sports betting in New Jersey, they argued. Federal judges repeatedly sided with the leagues, and in June the U.S. Supreme Court let the ban stand. But during litigation, judges implied that PASPA merely banned states from sponsoring sports betting, not from simply staying mum on the issue and letting casinos and racetracks do what they will.

So in late June state lawmakers passed, with overwhelming support, a bill to do precisely that.

Under the bill awaiting Christie’s signature, the state would take a completely hands-off approach to sports betting - not formally authorizing it, but not prohibiting it, either. Because there would be no state sponsorship in the practice, racetracks and casinos in New Jersey could take sports bets without violating PASPA, the argument goes.

It’s “an unprecedented move,” said Christopher Soriano, an attorney and chairman of the Casino Law Section of the New Jersey State Bar Association. “No other state has ever tried this,” he said. Some gaming attorneys call the bill a creative workaround to the federal ban; others say it's a bizarre end-run around the law.

There are “pretty good arguments, and pretty interesting arguments, on both sides,” Soriano said. “We haven’t had this interesting of a cutting-edge legal issue in the casino industry in years.”

Even if Governor Christie signs the bill, the plan could face further legal hurdles from the leagues, which might sue for an injunction to stop the law from taking effect.

In Nevada, the only state offering a full array of legal sports betting, the practice generated a record US$ 202.8 million in revenue in 2013, said David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. That was less than two percent of the state’s total annual gambling revenue, he said.

The big boon for Atlantic City wouldn’t come from the sports betting revenue itself, said attorney Soriano. It’s the attendant revenue, from having people come to town to bet on sports, that could be truly profound, he said.

“If you look at when you would have people coming in to do sports betting ... it’s the beginning of February for the Super Bowl. It’s March for March Madness. It’s weekends in October, November, December for the NFL. These are times that are not necessarily busier times in Atlantic City,” he said.