Sports wagering in N.J. having a tough time making its way through the courts

Mon, Dec 1, 2014
by CapperTek

New Jersey’s elected officials are doing their best to bring sports betting here to help the economy and provide new revenues for the state. The courts have blocked them at every turn, but they keep trying.

Eventually, one way or another, the odds are they’ll get what they want. Whether it will happen soon enough to help the failing racetracks and casinos, along with an equine industry that depends on parimutuel action, is much more of a long shot.

Through it all, the one constant has been the unfailing optimism of the state’s longest and most fervent advocate of sports wagering, Sen. Ray Lesniak (D-Union). Each time the senator’s promise to personally risk a few bucks on a National Football League game at a New Jersey betting parlor in a few weeks or months is nullified by events, he comes up with a new strategy and a sunny new forecast.

Lesniak’s, and New Jersey’s, bête noir is the federal Professional and Amateur Sports Protection Act (PASPA) of 1992, which prohibits state-regulated betting on sports contests except in four states where it was grandfathered. Congress passed PASPA because the professional leagues and the NCAA said such a law was essential to preserving fan confidence in the integrity of their games.

Ironically, PASPA granted New Jersey, as a successful early regulator of casino gambling, one year to include itself among the grandfathered states, and New Jersey let the opportunity slip away. That was the result of election-year politics by a Republican-controlled Legislature, says Lesniak, who, as minority-party senator back then, voted to accept the feds’ deal.

In 2012, the Legislature, now under Democratic control, with Lesniak leading the charge and backed by 2-to-1 public support in a referendum, authorized sports betting, and Gov. Chris Christie signed it into law. In defying PASPA, state leaders were confident they could show that the statute was an unconstitutional violation of states’ rights under the Tenth Amendment.

A series of setbacks followed. The leagues and the U.S. Justice Department persuaded U.S. District Judge Michael Shipp to grant an injunction. Shipp’s action was upheld by a panel of the Third Circuit Court of Appeals. The U.S. Supreme Court declined the state’s request to hear the case.

However, officials here believed they spotted a loophole in the appeals court ruling. It noted that PASPA outlawed only state-sanctioned sports betting and wouldn’t prevent New Jersey from repealing its own laws against the practice. Last October, the Legislature and Christie enacted a Lesniak-sponsored bill that eliminated the state’s ban as it applied to racetracks and casinos, and Monmouth Park prepared to welcome gamblers eager to wager on National Football League contests.

The leagues sued again, arguing that the repeal was a highly selective one. New Jersey still regulates casinos and tracks, the leagues pointed out, and its new law contained regulation-type prohibitions, including betting on certain college games and betting by persons under age 21. A few days ago, Judge Shipp again ruled against the state, and the Christie administration quickly announced its intention to appeal his decision to the Third Circuit.

So here we go once more – with the ever-hopeful Lesniak predicting that this time the appellate judges will uphold the state’s action.

Meanwhile, however, the battle between New Jersey and the leagues has taken an interesting new turn.

Adam Silver is commissioner of the National Basketball Association, which has been one of the state’s perennial court opponents. Last month, he wrote an op-ed column for The New York Times calling on Congress to enact a law legalizing sports betting across the country. (Judge Shipp, in his latest ruling, suggested that New Jersey put its passion to more practical use by working for the same outcome.)

Adding another ironic element to the saga, the arguments used by Silver echoed those New Jersey officials have been making for years. Sports wagering is “a thriving underground business that operates free from regulation and oversight,” he wrote. Citing estimates that illegal operations rake in up to $400 billion a year, he called for sports betting to be “brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”

Leaders of the other leagues haven’t endorsed his position, and Silver himself made clear that he still opposes New Jersey’s freelance efforts as “both unlawful and bad public policy.” Only Congress can create the safeguards needed to convince the public that villainous gamblers aren’t fixing game outcomes and point spreads, he wrote.

He neglected to mention a not-so-small problem: that Washington can’t pass even essential legislation these days. Nevertheless, Lesniak saw Silver’s essay as a sports-betting “game changer” and vowed to start a national petition drive to lobby Congress to repeal PASPA, with a goal of a million signatures nationwide and 100,000 from New Jersey. “I figure I will get it in short order,” he told reporters.