With Christie’s OK, New Jersey takes sports betting fight to the feds

Jan 18, 2012 |
Christie’s signature was a major win for sports betting in New Jersey.
Christie’s signature was a major win for sports betting in New Jersey.
New Jersey’s inexorable march toward rectifying a two-decades-old mistake has taken a giant leap forward with a stroke of Gov. Chris Christie’s pen.

The governor’s signature Tuesday on legislation passed by New Jersey lawmakers positions the state for a legal challenge to the Professional and Amateur Sports Protection Act, which was spearheaded – ironically – by former N.J. Sen. Bill Bradley.

Legalized sport betting at casinos in Atlantic City as well as at four race tracks in the state is now a court decision away. Within weeks, or only as long as it takes to get the paperwork together, New Jersey is expected to file a challenge to PASPA. Supporters are optimistic that Atlantic City casinos will be able to open sportsbooks in time for the start of the 2012 NFL season in September.

“He (Christie) didn’t have much choice but to sign the bill,” I. Nelson Rose, one of the country’s leading gambling analysts and the author of the popular gamblingandthelaw.com blog, told Covers.com in an email shortly after the governor made it official. “Not after voters approved it 2-1 in November.”

The November referendum asked voters if they wanted to put the state on record as endorsing a court challenge to PASPA, and the vote showed that residents were eager to take on the fight. Enabling legislation sponsored by state Sen. Raymond Lesniak, a longtime advocate of the legalization of sports betting, cruised through the legislature, teeing it up for Christie.

Joe Brennan Jr., president of the Washington D.C.-based Interactive Media and Entertainment Gambling Association, had joined Lesniak in the fight to legalize sports betting. Brennan was ecstatic that one more barrier to legalization has been turned aside.

“It’s great to see all the hard work pay off,” said Brennan in an email to Covers.com. “It's amazing how far we've come in two years, from nothing to legal sports betting becoming part of the New Jersey state constitution. Now New Jersey's new attorney general (Jeffrey Chiesa) is going to file in court to overturn PASPA, which now is considered likely. It's remarkable, and I'm proud of everyone who worked so hard to bring this to fruition.”

Less than a year ago, legalized sports betting seemed a pipedream. A lawsuit funded by Lesniak’s private law firm was thrown out of court when a judge determined that because the state did not have a dog in the fight (Christie had refused to allow the state to join the suit), Lesniak lacked standing.

Undaunted, proponents regrouped, got the issue placed on the ballot, mobilized public support for the referendum that led to approval, massaged legislation through the legislature and got it to Christie’s desk. All in a matter of about 10 months.

Now we head to federal court. In an interview with Covers.com in his Trenton office last August, Lesniak dryly noted that it shouldn’t take the state long to get the paperwork ready for the challenge.

“All they have to do,” said Lesniak, “is take the language from my challenge, and copy and paste. The legal framework is already there.”

It’s likely that New Jersey’s argument in court will go something like this: “It is unfair that only Nevada should be allowed to reap the benefits of unfettered sports betting, and New Jersey should not have to pay a price forever for an unwise decision made 20 years ago.”

A successful court challenge will right a wrong that has been on the books since the state legislature, mired in election politics in the early 1990s, refused to allow the state to declare itself exempt within a one-year window afforded it by Bradley’s PASPA.

Through the ’90s and early 2000s, not much attention was paid to sports wagering as Atlantic City casinos – bereft of any major East Coast competition – raked in money hand over fist. But the economic downfall of 2008 and the proliferation of casinos that produced unwanted competition dealt AC properties some severe body blows from which they are still trying to recover.

No one knows how much tax money the state would generate from sports betting and estimates vary considerably. But when you’re in the middle of an economic avalanche, you grab onto any tree you pass.

And there are signs in Atlantic City that the legalization of sports betting will assist an area that is showing recent recovery. In December, the casinos in Atlantic City showed a monthly revenue increase of 4.2 percent. It was the first time since August 2008 – when the economy fell flat on its face - that the properties had taken in more money than the month prior.

Add to that the rebranding of one of Trump’s old hotel-casinos into the Golden Nugget and the projected May opening of the new high-end Revel, and maybe things are turning around. For the first time in a long time, there is optimism along the Boardwalk.
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