Will sports betting derail Christie's White House hope?

Fri, Nov 28, 2014
by CapperTek

A new legal hurdle for sports betting in New Jersey has cost Gov. Chris Christie, ahead of a potential presidential campaign, a chance to deliver on promises of a brighter future for the state’s gaming industry.

Sports betting was planned for a launch at Monmouth Park racetrack, with a future buildout to casino sites to help revive Atlantic City, but a federal judge late Friday night kept a federal betting ban in place, siding with opposition from the NFL and other sports leagues.

Christie spokesman Michael Drewniak on Monday said state attorneys “immediately filed our appeal after the court ruling.”

That will likely send the matter to the 3rd U.S. Circuit Court of Appeals in Philadelphia, but the appeal process could take six months or more — not swift enough to protect Christie from critics who will focus on Atlantic City’s failings if he embarks on a presidential campaign early next year, said political analysts.

The second-term Republican has worked closely with policymakers to reshape Atlantic City, but they’ve had no luck averting a rash of casino closings that have put 8,000 workers out of jobs. Administration officials say noncasino revenue has increased, but the amount is dwarfed by a massive reduction in money spent on gambling, with a nearly 50 percent drop in annual gaming revenue since a peak of $5.2 billion eight years ago.

There have been four casino closings in 2014. The threatened closing of a fifth casino, Trump Taj Mahal, and a rescinded offer to purchase the closed Revel Casino prompted Moody’s Investors Services on Monday to issue a credit warning for both the city and a state authority that issues bonds that rely on taxes generated by visitors to Atlantic City and hotel guests.

Gaming attorney Daniel Wallach said he expects that New Jersey will move to expedite its sports betting appeal and that the 3rd Circuit will likely grant the faster review path. Wallach said written briefs would be filed by the end of February, oral arguments would take place in late March or early April, and a decision would come between May and July.

New Jersey’s bid to legalize sports gambling resulted in $2.8 million for legal bills from the Gibson Dunn & Crutcher law firm for work between August 2012 and the end of last year. Updated bills were not available Monday from the state Attorney General’s Office. The firm was also hired by the Christie administration for an internal investigation into the George Washington Bridge scandal.

The appeal will further inflate the costs, but Wallach, a shareholder at Becker & Poliakoff, said the “potential upside” makes the expenditure worthwhile.

“They’ve already gone down this road, so it’s not wise to turn back,” Wallach said. “I rate it a 25 percent chance of success in the appeals court. That’s a pretty good chance. The New Jersey state budget, I realize, is not flush with extra money, but this is a worthwhile bet. They’re close to the finish line, and most of the arguments have been already crystallized.”

Former state gaming regulator Carl Zeitz said the meltdown of Alantic City’s casino business isn’t Christie’s fault — it’s the result of added competition in nearby states, he said — but he said Christie can be blamed for not properly diagnosing the city’s ills and unfairly allocating the state’s resources.

“Why was all this time, energy and money put into Atlantic City when there are other struggling urban cities in New Jersey that didn’t receive the same attention?” Zeitz said. “Why Atlantic City? Why not Irvington or any number of other places?”