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.”

“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.

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.”

Links
New Jersey letter to USAG Eric Holder on legal intra-state i-gaming (pdf format)

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.

Links
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

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.

Links
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