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Lesniak Testimony To NCSL On Federal Sports Betting Ban

NEW ORLEANS – At the Budget and Revenue Committee meeting held today as part of the National Conference of State Legislatures (NCSL) 2008 Legislative Summit, State Senator Raymond J. Lesniak, D-Union, one of the chief advocates for allowing professional sports betting as a revenue source in New Jersey, issued the following testimony to encourage other states to challenge the federal sports betting ban which prohibits every State except Nevada, Delaware and Oregon from allowing legalized sports betting within their borders:

“In 1992, Congress passed the Professional and Amateur Sports Protection Act (PASPA) despite opposition from the National Conference of State Legislatures (NCSL). Through this legislative measure, Congress stripped individual states of their ability to conduct betting on professional and amateur sports.

“Much has changed in the 13 years since PAPSA was enacted. We need new, innovative solutions for the economic challenges we face. And the reasons given by the supporters of the ban are no longer valid, or have been proved to be not valid in the first place. The time is ripe for NCSL to re-state its opposition to the ban, so states can decide for themselves if legalized sports betting is good for their individual state.

“First and foremost, internet betting has made a mockery of the injunction on legalized betting. In 1999, the National Gaming Impact Study Commission estimated that Americans illegally wager between $80-360 billion annually on sporting events. Newspapers throughout the country print the daily line on games. Observe the cheering and moaning in any sports bar well after the result of a game is in question and you can see firsthand that betting in not exclusively done in Las Vegas. The only difference is that in Las Vegas, it’s legal.

“Secondly, when Congress passed the ban, only New Jersey and Nevada permitted casino gambling. New Jersey was given one year to pass a referendum which would have permitted sports betting. Unfortunately, the time wasn’t right for the Garden State and partisan political concerns blocked the referendum in the Assembly after it passed in the Senate. We’ve had many new legislatures since then, but our fate was decided by those in office in 1993. Those serving in the New Jersey legislature today want their opportunity to vote on this issue as, I’m certain, do the representatives from the other states as well.

“37 states now have some form of casino gambling: Alabama; Alaska; Arizona; California; Colorado; Connecticut; Delaware; Florida; Idaho; Illinois; Indiana; Iowa; Kansas; Louisiana; Maine; Michigan; Minnesota; Mississippi; Missouri; Montana; Nebraska; New Mexico; New York; Nevada; North Carolina; North Dakota; Oklahoma; Oregon; Pennsylvania; Rhode Island; South Dakota; Texas; Washington; West Virginia; Wisconsin; Wyoming.

“Only Delaware, Nevada and Oregon are permitted to take bets on sports.

“The entire legislative scheme of PAPSA is fundamentally unfair and discriminatory.

“In light of the explosion of internet betting and the continued involvement of organized crime in sports betting, the federal ban is not only unfair and discriminatory, it’s dumb and a slap in the face of the representatives and residents of the states now banned from enacting sports betting.

“In New Jersey last year, a $22 million per year sports betting operation was busted at the Borgota Casino in Atlantic City. Those involved had close ties to organized crime figures in Philadelphia. It was the third time last year that illegal sports betting was uncovered in New Jersey: one instance involved a former NHL coach! How many others are ongoing? We don’t know. But significant law enforcement resources are wasted trying to find out. Legalized professional sports betting would free-up those scarce resources to meet other needs.

“New Jersey has effective oversight of legal gambling in our casinos. Sports betting could be added seamlessly to our Casino Control Commission’s responsibilities. I’m sure the same would be true in the other 36 states, Nevada included, that have casino gambling.

“Legal sports betting would also enhance the discovery of sports fixing schemes and serve as a deterrent. There are sophisticated software programs that track unusual betting patterns which can not be applied to the current internet or organized crime-run sports betting operations.

“Thirdly, sports betting can be the savior for the horse racing industry, which is dying in New Jersey and in states across the country. Just as snow boarding saved the ski industry, sports betters would be attracted to racetracks. Unlike casino gambling, horse racing is an athletic event like other sports. Sports betting and horse racing are a perfect fit.

“In New Jersey, horse racing is a $1 billion industry, provides 13,000 jobs and preserves roughly 142,000 acres of open space for horse farms. Recently, we provided a $90 million subsidy, over 3 years, to keep the industry alive. We can not continue to subsidize it. Sports betting is its only hope.

“The direct revenues which can be secured by legalizing sports betting are huge. Conservatively estimating a $100 billion yearly take, a 10% takeout yields $10 billion: not chump change! Your staff’s memo on PAPSA refers to an estimate by a New Jersey Commission that annual revenues to the state would be between $5-8 million. That Commission’s methodology was wrong. It assumed New Jersey would get the same ratio of sports betting to casino revenues as Nevada. In actuality, gamblers from throughout the world go to Nevada for casino gambling, not sports betting. A more appropriate, and conservative estimate, would be between $100-150 million of direct revenues to the state.

“PAPSA, in addition to being bad public policy, can also be called into question on Constitutional grounds. I believe the federal ban is unconstitutional, that the original intent and founding principals of the framers of our Constitution was to prevent states and the federal government from enacting tariffs and other protective barriers to trade and commerce among the states.

“In my opinion, the professional sports organizations are being hypocritical in their continued opposition to lifting the ban. MLB looked the other way while illegal steroids were pumping up chests and arms, home run statistics and fan attendance. The NBA recently had its All-Star game in Nevada, home to the largest gambling mecca in the nation. And the NFL has seen serious off-the-field crimes and other objectionable behavior problems among far too many of its players. If we were allowed to enact sports betting, the states would be more capable of uncovering game or score fixing schemes than the professional sports associations themselves.

“Lastly, it’s my position and belief that — if the federal ban is lifted — New Jersey will keep non-professional sports out of sports betting, keeping them non-professional, and allow professional sports betting exclusively at our casinos and racetracks.

“Sports betting is common in Europe and occurs everyday in Nevada. All states should have the opportunity to choose for themselves whether they want it as well.

“Thank you.”