New Jersey sport betting legal battle resumes

State’s battle with the major sports leagues over allowing its racetracks and casinos to operate sportsbooks underway once again

New Jersey’s long-running battle with the major sports leagues over allowing its racetracks and casinos to offer sports betting without fear of prosecution resumed yesterday in front of a packed appeals court. [private]

Each side has hired a former US solicitor general for the fight, with Theodore Olson arguing for the state of New Jersey and Paul Clement for the sports leagues.

The state has tried several times in recent years to legalize sports betting through the New Jersey Sports Wagering Law, despite the Professional and Amateur Sports Protection Act (PASPA) 1992 banning the activity in all but four states.

New Jersey has long since complained it loses millions of dollars in tax revenue each year to offshore unlicensed sportsbooks, money that could be used to help its struggling gambling industry.

The leagues, however, say legalizing sports betting would damage the integrity of the games and lead to match fixing, despite the activity being legal in Nevada, Delaware, Montana and Oregon.

Yesterday’s case got underway with Olson given 27 minutes to put forward the state’s argument, and he started by asking whether PASPA was constitutional.

Olson then argued there was nothing in PASPA that would prevent New Jersey from repealing the law, and that it simply prevents the state from explicitly legalizing and licensing sportsbook operators.

Ronald Riccio from the New Jersey Thoroughbred Horsemen’s Association tried to assure Judges the industry could self-regulate without becoming “the Wild West of sports betting”.

However, a couple of Judges raised concerns over the lack of regulatory oversight, with Chief Judge Thomas Ambro joking it might become the “Wild East” of sports betting instead.

Others asked whether a ruling in favor of New Jersey would allow other states to follow suit – the appeals court where the case is being heard also covers Pennsylvania, which has taken a pro sports betting stance of late.

At the crux of the case is the line between when a repeal is an authorization and when it is not, and separating a partial repeal that violates PASPA from one that doesn’t.

If the court does rule in favor of the state it will be an absolute boon for New Jersey’s gambling industry, with the Monmouth Park Racecourse likely to be among the first to open a sportsbook.

The racetrack operator has a partnership agreement in place with William Hill – which runs more than 100 sportsbooks in Nevada – and head of Hill’s US division Joe Asher said there was growing consensus the current law is not working.

However Asher believes the issue is one Congress should take up, although welcomes progress in New Jersey.

“People are generally realistic; there are a lot of issues going on that are all seeking the attention of Congress,” he told political newspaper The Hill.

“Perhaps it takes a court ruling, either in the Third Circuit or elsewhere that may create the impetus to move the issue forward.”

If the court sides with the leagues, the state will be able to challenge the ruling in the Supreme Court.