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.

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.”

Link
Letter in support of Federal sports betting bills - US Reps. LoBiondo & Pallone (PDF format)

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)