Legislative Action the Next Step in Overturning Unfair Federal Ban
TRENTON – Legislation sponsored by Senators Raymond J. Lesniak and Jeff Van Drew which will allow licensed casinos in Atlantic City and racetracks throughout the state to operate sports wagering pools on professional and collegiate sporting events was signed into law yesterday by the Governor.
“With the Governor’s signature, we’re now in a position to move forward with well-regulated sports betting in the Garden State,” said Senator Lesniak, D-Union. “We’re moving ahead despite an unfair and arbitrary federal ban which gives four states an unfair advantage while giving a boost to sports books operated by organized crime and offshore operators everywhere else. Through this legislation, we can successfully challenge the federal ban on sports wagering, and get to work creating jobs and economic activity that will be the result of legal sports wagering in New Jersey.”
“I’ve worked on this legislation from the start, and I’m happy to say that the day is finally here where New Jerseyans get to decide for themselves on sports wagering,” said Senator Van Drew, D-Cape May, Cumberland and Atlantic, who sponsored the sports wagering bill in the Assembly before working with Senator Lesniak in the Senate.. “The federal ban on sports wagering notwithstanding, with the Governor’s signature, Atlantic City’s casinos and New Jersey’s horse tracks will be able to collect more than a billion dollars in new, annual revenue as a result of legal sports wagering. We’ve fought long and hard to get to this point, and though the fight isn’t yet over and we still have to bring our case to the U.S. Supreme Court, I think we’ll soon see the promise realized of sports wagering for the Garden State.”
The bill, S-3113, allows for casinos, racetracks and joint partnerships between casinos, racetracks and/or third parties to operate sports wagering pools at the State’s casinos or racetracks. The new law will allow people over the age of 21 to place a bet on a sporting event in-person at special lounges created in casinos, racetracks or at the site of a former racetrack with the State of New Jersey. The law does not permit wagers to be placed on college games that take place in New Jersey or on any game in which a New Jersey college team participates, regardless of where in the country the game takes place.
The legislation follows a November ballot referendum which amended the state constitution to authorize the Legislature to enact laws allowing sports wagering at Atlantic City casinos and at horse racetracks throughout the state. The ballot question passed by nearly a 2-1 margin.
“The voters of New Jersey have spoken, and they want to have the option of betting on sports events as casinos and racetracks,” said Senator Van Drew. “By allowing our gaming establishments to set up and operate sports betting parlors on premises, we could allow them to reap the financial benefits while setting up New Jersey as the premiere gaming destination of the East Coast.”
Club CalNeva, a Las Vegas-based company which operates over 30 sports books and handles billions of dollars in bets, estimates that sports betting will bring in, annually, $1.3 billion in sports wagering gross revenues and $120 million in tax revenues for New Jersey. It is also estimated that sports wagering could create thousands of new jobs for New Jersey residents.
“Our State’s gaming industry is struggling to stay relevant, and is facing the dual pressures of a soft global and national economy and increased out-of-state competition,” said Senator Lesniak. “We cannot turn our backs on the billions of dollars in revenue, millions of dollars in tax revenue, and thousands of jobs which will come hand in hand with legal sports betting in New Jersey. This is about giving our casinos and racetracks a tool to compete nationwide and recovery from a drastic economic downturn.”
The sponsors acknowledge that the new law conflicts with existing federal law which prohibits sports wagering outside of Nevada, Delaware, Oregon and Montana. The Professional and Amateur Sports Protection Act of 1992 allowed states which already had casino gambling at the time, but hadn’t already allowed sports wagering, to opt-in within one-year by passing enabling legislation. Despite the objections of gaming advocates at the time, including Senator Lesniak, New Jersey’s legislative leaders refused to put legislation establishing sports wagering up for a vote before the deadline lapsed.
Now that the bill is law, the State must file suit against the federal government, stating that the federal ban violates the fifth, tenth and 14th Amendments to the United State Constitution, as well as the Commerce Clause. Senator Lesniak had previously sued the federal government on behalf of the people of New Jersey, but the suit was dismissed on the grounds that sports wagering was not legal in New Jersey and that overturning the national ban would have no impact on the State. With New Jersey legalizing sports wagering through referendum and subsequent enabling legislation, Senator Lesniak’s suit would have to be decided on the merits of the Constitutional argument, and the Union County lawmaker said he believes that the courts will ultimately rule in New Jersey’s favor.
“If we let the federal sports wagering ban stand, we’re essentially conceding the revenues from sports wagering to off-Shore Internet gaming operators and betting rings operated by, and fueling, organized crime,” said Senator Lesniak. “We’ve jumped the first hurdle, by ensuring that a majority of New Jerseyans want to see legal sports wagering within our borders. Now it’s time to end the unfair federal ban, and give New Jersey casinos and racetracks the same opportunity that Nevada casinos enjoy when it comes to legal sports book.”
“If we want to make sure that we retain our prime position as the leader in East Coast gaming, we have to be ready to challenge the old ways of doing business,” said Senator Van Drew. “We can no longer ignore the jobs and revenues which would be created by legal sports betting in New Jersey, when gaming establishments in the Garden State are hurting from expanded gaming in Pennsylvania, Delaware and New York. It’s time to fight for the economic stability and continued success of our casino and horseracing industries, and one of the tools that will ensure that stability and success is sports wagering.”
The bill was approved by both Houses of the Legislature earlier this month.