IMEGA on US DOJ Intervention in NJ Sports Betting Lawsuit
Washington, DC - While the decision by the US Department of Justice is disappointing, it has little bearing on the heart of the matter - that this law preventing New Jersey from regulating sports betting is unconstitutional. DOJ’s presence will make it more interesting, but won’t make a difference.
New Jersey only wants to do what Nevada and Delaware are free to do - regulate and tax sports betting - to save Atlantic City’s casinos and the state’s race tracks. It is confusing why the Obama administration would oppose a law approved in New Jersey by a 2-to-1 margin in a reliable “blue state”.
And though it’s not likely that US Attorney-General Eric Holder made this decision based on his recent work as counsel and crisis manager for the NFL, it is legitimate to ask why the DOJ would side with billionaire team owners over the voters of New Jersey.
Federal bills introduced to overturn sports betting ban
April 26, 2012 - Rep. Frank LoBiondo (R-NJ 2nd) and Rep. Frank Pallone, Jr. (D-NJ 6th) have asked members of the US House of Representatives to support two bills introduced to roll back the Federal ban on expanded state-licensed sports betting.
In a letter to colleagues, Reps. LoBiondo and Pallone asked members to support H.R.3809, “the New Jersey Betting and Equal Treatment Act of 2012″, which seeks ”to exclude the State of New Jersey from the prohibition on professional and amateur sports gambling”; and H.R.3797 - “the Sports Gaming Opportunity Act of 2012″ , which would “permit a 4-year period [for] States to enact statutes…[for] wagering schemes involving professional and amateur sports.
Congress was asked to consider the economic benefits of rolling back the Professional & Amateur Sports Protection Act of 1991 (PASPA). “Recent estimates have found that the sports gaming market could bring in billions of dollars in new revenue to New Jersey,” LoBiondo and Pallone wrote. “New Jersey’s regulation of sports betting promises considerable revenues that will benefit the state and provide funding for vital programs.”
The push on sports betting in the US Congress follows a move in the California state senate, where a committee this week approved a bill that would permit sports betting at the state’s tribal casinos, tracks and card rooms.
“Momentum is building for expanded, state-regulated sports betting in the US,” said Joe Brennan Jr., director of IMEGA. “With the success we’ve had in New Jersey, with voters approving sports betting in the November 2011 election by a 2-to-1 margin, lawmakers in Washington DC and elsewhere are taking a greater interest in the role that government can play in legalizing the activity, while protecting the integrity of the games through tight regulation and monitoring.”
Letter in support of Federal sports betting bills - US Reps. LoBiondo & Pallone (PDF format)
NJ Governor signs sports betting law
Jan. 17, 2012 - New Jersey Governor Chris Christie signed into law a constitutional amendment that will permit sports betting at the state’s casinos and race tracks.
Coming on the heels of a statewide ballot in which voters approved of regulated sports wagering by a 2-to-1 margin, this new law directs the NJ Division of Gaming Enforcement to draft regulations to oversee legal sports betting by individuals aged 21 years or older.
“After a long and comprehensive effort to bring regulated sports betting to New Jersey, the governor’s endorsement today is very satisfying,” said IMEGA director Joe Brennan Jr. “After the last few years working with lawmakers to help this become a reality, it’s gratifying to see New Jersey’s casinos and race tracks will have the opportunity to offer sports betting, and allow regulators to protect the integrity of the games.”
Now that Gov. Christie has signed sports betting into law, new state attorney-general Jeff Chiesa will file suit in US District Court, to have the 20 year ban on expanded state-regulated sports betting overturned. The law, the Professional & Amateur Sports Protection Act (PASPA), restricts sports betting to only four US states, something that New Jersey lawmakers have long insisted was unconstitutional.
“With the successful referendum and this law signed by Gov. Christie today, it’s likely that PASPA will be overturned by the Federal courts,” Brennan said. “Once that happens, it will be left to each state to decide whether to permit sports betting, and how it will be offered.”
New Jersey lawmakers will now turn their attention to the state’s Internet gambling bill, which Gov. Christie now indicates he would be willing to sign if matters of constitutional law can be satisfied by the new draft bill. Gov. Christie vetoed a similar bill last march, but his advisors have since sought to work with key legislators to create a bill that satisfies the requirements of the New Jersey casino law.
“New Jersey has shown that it is the key leader for the US gaming industry in matters of Internet and sports gambling,” Brennan said. “It seems likely the state will become the center for these new gaming industries in the years ahead.”
NJ voters overwhelmingly approve legal sports betting by 65% to 35%
Nov. 9, 2011 - After a two-year long effort, in the courts and in the state legislature, voters overwhelmingly supported the beginning of legal sports wagering in New Jersey. Voters approved the constitutional question by a final margin of 65% in favor, 35% opposed.
“We’re very happy that now, after this long and difficult process, the question of legal sports betting is at last moving through the proper venues,” said IMEGA director Joe Brennan Jr.
“New Jersey’s citizens have voted to amend their state constitution to permit regulated sports wagering. This referendum was a reflection of the most powerful form of change in our government - a purely democratic, majority decision by popular vote,” Brennan said.
“Regardless of how much the NFL and billionaire team owners want to turn a blind eye to the reality of sports betting in the US, regardless of how much they’ll try to leverage their privilege and political connections to block this, they’ll not succeed.”
In press accounts, a counter-narrative was already taking shape: that New Jersey’s vote didn’t really settle much on the question of sports betting, and that it will be a long time, if ever, before the state’s casinos and race tracks started taking bets.
Brennan responded, “Of course, this was just a single step in a process that will likely play out in Federal court. However, it was the most important step.”
“This is no longer an academic argument. Federal law now directly conflicts with the constitutional will of the people of New Jersey. A federal law that was the result of personal interests, intruding into the public space and inflicting real harm on New Jersey, will now be closely examined by the courts. It will no doubt be found fatally flawed, and overturned.”
“Of course, we could avoid all of this - the court battles, the expenditure, the silliness, really - if the Department of Justice would simply acknowledge what it did when PASPA was first enacted almost 20 years ago: that the law is unconstitutional,” Brennan said.
“We could avoid all of this if the NFL and other opponents simply recognized the obvious: sports betting is here, always has been, always will be, no matter how much finger wagging the owners may do at every day fans who, with their wager, choose to back their favorite teams with more than just the exorbitant cost of a ticket, licensed team gear, or Team Logo lottery tickets.”
“If the leagues and their supporters want to protect the integrity of their games - which we do as well - they should embrace regulation with both arms. Because you cannot be vigilant with your head in the sand.”
IMEGA would like to thank Sen. Raymond J. Lesniak, who tirelessly championed this effort, in the courts, in the New Jersey legislature, and in rallying support for yesterday’s vote. We will continue to do everything in our power to support his efforts to bring legal sports betting to fruition in New Jersey.
IMEGA would also like to thank Gov. Chris Christie, whose endorsement of yesterday’s vote and pledge to work to champion New Jersey’s right in court, demonstrates that someone with such law enforcement credentials (as the former US Attorney for New Jersey) will be invaluable for assuring the public and the leagues that the integrity of the games and they system will be of paramount concern.
IMEGA also wants to thank the Casino Association of New Jersey (CANJ), for their crucial endorsement of the sports betting vote. In particular, we’d like to thank CANJ president Bob Griffin of Trump Entertainment, and Dennis Gomes, CEO of Resorts Atlantic City. Their support was critical for bringing greater awareness to the issue, and for demonstrating its importance to the renaissance of Atlantic City.
NJ to US DOJ: Intra-state i-Gaming is permitted under Federal law
July 24, 2011 - New Jersey lawmakers are telling the US Department of Justice that their state has every right to enact intra-state Internet gambling, and that their efforts are permitted under current federal law.
In a letter to US Attorney-General Eric Holder, NJ Senator Raymond J. Lesniak - one of the sponsors of New Jersey’s proposed sports betting and Internet gambling legislation - stated that “(t)he State of New Jersey should not be impeded in any manner from exercising our rights under our state constitution and under federal law.”
Link: New Jersey letter to USAG Eric Holder on legal intra-state i-gaming (pdf format)
Earlier this year, New Jersey’s legislature overwhelmingly voted for a bill to permit casinos in Atlantic City to offer intra-state Internet gambling on casino games and poker. Though Gov. Chris Christie vetoed the bill, both he and the legislature indicated a desire to make New Jersey the first state in the US to legalize Internet gambling. A new bill is expected to be introduced sometime later this year.
Lesniak’s letter was in response to one sent a week earlier to USAG Holder by US Senators Harry Reid and Jon Kyl. Both Reid and Kyl insisted that the DOJ crackdown on efforts by states to pass intra-state Internet gambling legislation, claiming it violated federal law including the Wire Act of 1961.
Lesniak pointed out that under the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA), intra-state Internet gambling was permissible, and cited the specific passage in the law’s text:
“The term ‘unlawful Internet gambling’ does not include placing, receiving, or otherwise transmitting a bet or wager where…the bet or wager is initiated and received or otherwise made exclusively within a single State.”
Lesniak also pointed out that “intermediate routing” of Internet network traffic across state lines by Internet service providers (ISPs) did not violate either UIGEA or the Wire Act. UIGEA specifically states that intermediate routing did not affect the location of the bet, Lesniak wrote, and the Wire Act was intended for criminal enterprises using telecommunications to conduct illegal interstate sports betting, and was not intended for state-licensed and regulated intra-state gaming.
Both Reid and Kyl voted for UIGEA with the intra-state exemptions included in the final text of the law.
Lesniak also contradicted assertions by Reid and Kyl that all Internet gambling, including intra-state, was illegal.
“Were you to accept Sens. Reid and Kyl’s letter on its merits, you would have to prosecute the Nevada Gaming Board, which this year approved sports betting via mobile Internet within the confines of the state of Nevada. Nevada has also approved other forms of Internet and remote wagering on casino games, poker and sports within Nevada by firms like Las Vegas Sands and Station Casinos.
Lesniak went on to write, “(f)or that matter, New Jersey and 37 other states would also have to be prosecuted for permitting online wagering on horse races, which has existed for years.”
New Jersey letter to USAG Eric Holder on legal intra-state i-gaming (pdf format)
Statement on Justice Department Domain Seizures
May 24, 2011 - The seizure today of 10 domain names by the US Department of Justice is a troubling development in the ongoing efforts to settle the question of Internet gambling. At a time when legislators at both the state and federal level are debating whether to permit online versions of poker, casino and sports betting, the DOJ has chosen to ignore debate and to instead set a troubling precedent when it comes to Internet law.
Without any criminal convictions or due process, the DOJ has confiscated property by merely ordering VeriSign, which controls the .com and .net top-level domains, to redirect traffic to landing pages that seem more intent on provoking fear than in pursuing any reasonable process of justice.
We have concerns beyond this immediate case. What will happen to Internet commerce and free expression if national governments take short cuts in law enforcement like this, or simply object to contrarian speech and dissent. To abuse power in this manner is a slippery slope that will be hard to reverse, especially given the aggressive tactics utilized by countries like China, Iran and those governments currently facing popular upheaval in the Middle East.
iMEGA does not support lawlessness. If laws were truly broken, than a court of law will deal with them: that is how our system works. The companies and individuals affected by today’s seizures will now have to defend themselves from the disadvantaged position of “guilty until proven innocent”, rather than the “innocent until proven guilty” standard that is their right, by law.
DOJ Press Release: Seizure of 10 Internet Domain Names & Criminal Indictments
Baltimore Sun: Baltimore Feds Target Internet Gambling
Baltimore City Paper: Federal Prosecutors in Maryland Indict Internet Gambling Companies
Sports Betting Update: NJ vote result submitted to court; DOJ objects
January 19, 2011 - After attorneys representing iMEGA, Senate President Stephen M. Sweeney and Senator Raymond J. Lesniak submitted the results of the recent sports betting vote in the New Jersey legislature, the US Department of Justice (DOJ) immediately asked a US district court judge to reject those results, insisting they were irrelevant to a suit seeking the overturn of a two-decade national ban on expanded state-regulated wagering.
This past December, lawmakers in both houses of the New Jersey legislature voted overwhelmingly to approve a bill that will put the question of whether the state should legalize and regulate sports betting on the ballot during this year’s statewide elections. The legislative vote carried by a 36-to-3 margin in the Senate, and by a 55-to-17 margin in the Assembly.
The attorneys representing iMEGA and the two senators seek to include this result in the record being considered as part of their lawsuit (iMEGA, et al, v. Eric H. Holder, Jr., et al) to have the court overturn a 20-year-old Federal law prohibiting the expansion of state-regulated sports betting beyond four states which already have it - Nevada, Delaware, Montana and Oregon. The plaintiffs insist that the Professional and Amateur Sports Protection Act of 1991 (PASPA) represents an unconstitutional restriction on states’ ability to determine what kinds of gambling activities they choose to regulate and tax within their own borders.
The DOJ, defendant in the case, counters that the law is fully constitutional - even though the DOJ claimed that the law was likely unconstitutional when it was first being drafted - and has entered motions requesting that the suit be thrown out of court, and alternately that the plaintiffs be barred from pursuing the case, alleging that none of them have the standing to challenge the law.
In this most recent skirmish, the DOJ objected to the submission of the results of the New Jersey vote, claiming it has no bearing on the suit. The DOJ also objected to the number and length of submission documents, and demanded the court throw them out.
“[P]laintiffs filed three separate sur-replies that exceed their requested page limit by more than 800%,” wrote attorney Peter D. Leary, of the DOJ civil division. “And not only do these briefs, when combined, total 25 pages, but each one of them exceeds three pages when just taken alone.”
Attorney Eric M. Bernstein, counsel to iMEGA, in a letter opposing the DOJ request, wrote to US District Court judge Garrett E. Brown Jr., “iMEGA first tried to obtain consent of the Defendants to supplement the record which was refused. Thereafter, the court directed that ‘each Plaintiff and Intervenor Plaintiff shall each respectively file their comprehensive sur-reply’ within seven (7) days…the Order clearly states that each Plaintiff was to file a sur-reply.
“Further, the Order states no limit on pages, but states that the sur-replies should be ‘comprehensive’. iMEGA submitted a four (4) page brief which focuses on the impact of SCR132 (the New Jersey sports betting vote) on the arguments of the Defendants. The request of (the DOJ) should therefore be denied.”
“The DOJ has bogged down this proceeding with motion after frivolous motion, to what end?” asked Joe Brennan Jr., iMEGA chairman. “I’m not an attorney, but I do have decent reading comprehension, and the court’s order on sur-replies asked each of the three plaintiffs to submit ‘comprehensive’ briefs, with no mention of ‘page limits’. Does anyone really believe that 25 pages concerning a successful, democratically-held vote on the issue of sports betting to be overwhelming?”
The suit, filed in March 2009, is expected to go to trial, absent further pretrial motions, sometime this spring.
AP: N.J. Legislature approves legalizing sports betting question on election ballot
iMEGA letter: Oppose DOJ motion - Sports betting suit
DOJ Motion to strike reply: Sports betting suit
Letter brief regarding adoption of NJ SCR132 on behalf of iMEGA
Brief of Sen. President Stephen M. Sweeney
Kentucky Update: iMEGA, Commonwealth submit briefs on domain name seizures
January 18, 2011 - Lawyers representing both sides of the Kentucky Internet domain name fight today filed briefs in Franklin County Circuit Court, in Frankfurt, KY. Lawyers representing iMEGA asserted the association’s right to contest the Commonwealth’s attempts to seize their members’ Web site addresses, while Kentucky’s lawyers ignored previous court rulings on standing, insisting that iMEGA and other trade associations lacked the right to appear.
“[T]his action (by the Commonwealth) is novel for the very reason that it is wrong:” wrote Jon Fleischaker, counsel for iMEGA. “There’s no authority for it.”
“The idea that the Commonwealth may proceed civilly against Internet domain names on the theory that they meet the criminal statutory definition of ‘gambling devices’ is simply not supported by the law,” Fleischaker wrote.
iMEGA has been joined by the Interactive Gaming Council (IGC), a Vancouver, BC-based association also representing a number of the domain owners. The Commonwealth’s attorneys sought to portray both associations as “illegal gambling organizations”, claiming that associational standing only applies in limited circumstances.
“The Commonwealth’s attorneys compensate for a lack of supporting case law by devoting page after page to ad hominem attacks,” said iMEGA chairman Joe Brennan Jr. “In the absence of a reasoned argument, I guess calling us ‘bad people’ is going to be their strategy.”
“The irony is they’ve accused our members of trying to avoid the law,” Brennan said, “yet it was the Commonwealth that used a secret, ex parte hearing to have the rights to the domain names seized, while providing no notice to the rights holders, and no opportunity for them to be represented by counsel.”
“In the end, it just sad that those contingency-fee lawyers continue to use the imprimatur of the Commonwealth of Kentucky to make a cynical a grab for money.”
The matter now lies in the hands of Franklin County circuit court Judge Thomas Wingate, who issued the original seizure orders on the behalf of Kentucky.
iMEGA brief: Kentucky v. 141 Domain Names
Commonwealth brief: Kentucky v. 141 Domain Names
IGC memorandum in support of Associational Standing
NJ Legislature Passes Internet Gambling Bill
January 10, 2011 - The New Jersey legislature has passed the Intranet-State Internet Gambling bill, which will permit casinos in Atlantic City to offer online versions of their games to residents within the borders of the state.
The bill, S490, which was co-sponsored by Sen. Ray Lesniak (D) and Sen. Joe Kryillos (R), was approved in the NJ Senate by a 34-2 vote. The Assembly version of the bill was approved by a 63-11-3 vote.
The bill now heads to the desk of Governor Chris Christie (R) for his signature, which would enable New Jersey to become the first state to regulate Internet gambling.
iMEGA chairman Joe Brennan Jr. released a brief statement in the wake of the successful vote:
“Congratulations to New Jersey’s legislators on their overwhelming vote in favor of the Intra-State Internet Gambling bill. It’s clear that New Jersey’s representatives want their state to be at the forefront of the online gaming industry, both in the US and globally.
“With the combination of the top regulators in gaming, great information technology infrastructure, a highly-educated workforce, and the strong foundation and leadership of the Atlantic City casino industry, New Jersey is certain to lead this industry’s growth in the US, while creating high-paying, skilled jobs in the technology sector and also attracting investment to the state.”
NJ passes iMEGA-backed Sports Betting legislation
Dec. 13, 2010 - In the wake of the passage of new sports betting legislation in New Jersey today, iMEGA chairman Joe Brennan Jr. released the following statement:
“Today’s the New Jersey Legislature overwhelmingly passed the sports betting bill, by a 36-to-3 margin in the Senate and a 55-to-17 margin in the Assembly.
“Next November, New Jersey’s voters will now go to the polls and determine the question of state-regulated sports betting for themselves. All early indications point to majority support by state residents.
“The votes today demonstrate that there can be a rational, constructive approach toward legalizing and regulating sports betting. While New Jersey is the first and boldest in its actions, other states - including California, Rhode Island, and Missouri, as well as the District of Columbia - have indicated that they too want to regulate this most common and widely-available form of wagering, and to permit their states to benefit from the protections and resulting revenue this would provide.
“This has been a long road, but NJ lawmakers see the sense in permitting and regulating sports wagering. State regulators would do an infinitely better job of protecting the integrity of our games, by bringing this vast underground economy into the light. Consumers will be protected from fraud, and the state will realize its fair share from the trade in the form of tax proceeds.
“The opponents of state-regulated sports betting have a difficult time convincing legislators that the status quo is acceptable. Not regulating a financial market of more than $500 billion is an invitation to corruption, not the prevention of corruption.
“Professional sports leagues, the NFL chief amongst them, are run by very intelligent individuals that maintain tight control over their games to ensure quality. State regulation of sports betting is an extension of that “quality control”. It’s the rational approach.
“We applaud the exceptional efforts of Sen. Raymond Lesniak, the sports betting bill’s principal author and champion, along with Sen. James Whelan of the Senate Gaming Committee, and Assemblymen John Burzichelli and Ralph Caputo of the Assembly Gaming Committee. Without their stewardship, the voters would not be able to make their own determination regarding sports betting in New Jersey.”
AP: N.J. Legislature approves legalizing sports betting question on election ballot