Sports Betting in New Jersey: Dead or Alive?

The United States Supreme Court refusing to grant certiorari to New Jersey’s appeal of two lower court rulings maintaining the sports betting ban in the state is not stopping some proponents.  Last week, just a few days after the decision, State Senator Raymond Lesniak proposed a bill aimed at allowing privately run sports betting at horse-racing tracks and casinos.  The measure would repeal New Jersey state laws and allow companies to offer sports betting without state regulation.  This would not violate federal laws because they only prevent states from licensing or regulating sports betting (with the exceptions of Nevada, Delaware, Montana, and Oregon).  States can allow betting to occur unregulated if they choose to do so.  The bill passed through the state Senate and the Assembly with ease (38-1 and 63-6-2 respectively) and could prove to be an important step towards legalized sports betting in New Jersey.

However, critics of this tactic are unconvinced the federal government will not interfere with what some perceive to be an attempt to circumvent federal law.  Further, and more concerning in the immediate future, is Governor Chris Christie may not sign the bill into law.  After the Supreme Court’s decision, Governor Christie commented, “It’s always a long shot to get certiorari from the United States Supreme Court . . . that’s the way it goes.  They said no, so we have to move on.”  This could be interpreted as Christie moving on to a new way to legalize sports gambling, but the more likely scenario is that Christie wants to focus his energy elsewhere and distance himself from a public defeat.  If the governor still has White House aspirations, and it’s clear he does, then moving on from this issue would likely be in his best interest.

Still, it is not entirely out of the question that Christie could get behind this attempt to bring legalized sports betting to New Jersey.  If he did sign the bill into law there would be a myriad of questions, but perhaps none more important than how it would help the state financially.  The driving force behind the legalization effort from the onset has been to generate revenue for the state of New Jersey.  If the state allows private companies to offer sports betting without having to be licensed and regulated, the money would have to flow to the state in ways other than licensing fees and built in charges for government regulation of the industry.  One way could be in increased tax revenue from the companies and patrons, but without state regulation it may be prove challenging to keep accurate account of the money moving between patron and businesses.  Without regulation, it is also unclear how patrons would be protected from predatory lending practices, unfair odds, and unethical debt collection or payout practices.  There are many factors indicating the state would be inviting more problems than revenue if they allow private businesses to provide sports betting without any regulation.  The increased amount of money in law enforcement man hours would be enormous to deal with these types of problems.  Without a need for a license or any state regulation, there would not be much motivation for business owners or patrons to obey the letter of the law with respect to declaring wins and losses.

In other words, circumventing the federal law this way would probably not produce anything close to the expected financial windfall that would have accompanied government regulated legalized sports betting in the state.  For the sake of a fading Atlantic City and the state, I hope legislators can figure out a way to make money from sports gambling.  This bill could very well be the start of that, though it seems unlikely.  The movement towards legalized sports betting in New Jersey may still be alive for the moment, but it certainly seems to be on life support.

-Keith Pedrani

Information from the following sources were used in this article:

http://www.nj.com/politics/index.ssf/2014/06/nj_legislature_passes_bill_to_pave_way_for_private_sports_betting_operations.html

http://www.nj.com/politics/index.ssf/2014/06/us_supreme_court_allows_sports_betting_ban_in_nj_remain.html

 

 

 

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