A federal lawsuit filed to block the start of sports betting in New Jersey may hinge on how much weight a judge will place on a small group of fans with a negative perception of sports gambling.
U.S. District Judge Michael Shipp, who heard arguments from lawyers on the matter in a standing-room-only federal courtroom in Trenton on Tuesday, will issue his written decision by Friday on whether a suit filed by the NCAA, NFL, NBA, NHL and Major League Baseball can proceed.
New Jersey argued those sports’ governing bodies don’t have standing to sue because they can’t show that sports betting is harmful to their businesses. But the NCAA and the leagues argue sports gambling will hurt fan perception.
“More gambling on their games will affect how their fans perceive the game,” said lawyer Jeffrey Mishkin, who represents the plaintiffs. “There’s a lot of history of scandals that involve gambling. … Our first point is there’s a reasonable and just concern about how our games will be affected.”
The NCAA conducted surveys that found that nearly 2 percent of its men’s basketball players and football players gambled on games and a certain percentage not only gave people inside information but were asked to affect the outcome, according to documents cited by Shipp. Some even reportedly admitted to throwing a game, according to Shipp.
Ted Olson, a well-regarded constitutional lawyer representing New Jersey, said he believed the prevalence of illegal gambling was at fault. New Jersey was looking to put regulations in place to dissuade illegal gambling.
“We want to make sure it’s clean,” Olson said.
Mishkin said legalizing gambling would just encourage the growth of the illegal gambling market.
“They can get better odds with an illegal bookie,” he said of sports gamblers. “There are all kinds of advantages that the illegal market has.”
Studies also showed that most sports fans — 73 percent — don’t gamble and 38 percent expressly oppose gambling, Mishkin said.
“We want to appeal to those fans,” he said.
In other documents cited by the judge, a study that showed 17 percent of fans would spend less money if a team were to relocate to Las Vegas. The sports leagues also cited a 2009 study by the NBA that found that 15 percent of people surveyed perceived gambling to play a role in influencing games
Olson tried to discredit the study, arguing it was unscientific and showed a greater percentage of people who believed other factors influenced the outcome of sporting events, such as 40 percent who believe the league office play a greater role. Out of the 12 choices offered, gambling was the least popular on the list of possibilities, Olson said.
But Shipp challenged Olson on whether it mattered how many people have a negative perception of gambling on sports.
“Isn’t it enough that it made the list?” the judge asked.
Legal precedent says only an “identifiable trifle of injury” is needed to prove plaintiffs have standing to sue. Lawyers discussed Doe v. National Board of Medical Examiners, where the plaintiff opposed being identified as disabled because he was concerned how that would shape people’s perceptions, fearing the potential for discrimination.
But Olson said that just because 15 people out of 100 surveyed believe sports gambling was a problem doesn’t make it true or likely. The perception must be based on something more than opinion, he said, adding in the case of the leagues, their financial success even in the midst of gambling counters the perception gambling is harmful.
In addition, the sports organizations could not prove the perception was due to state-sponsored sports gambling rather than illegal gambling, Olson said.
New Jersey also argued the promotion of fantasy football was a form of league-sanctioned gambling that has led to a $5 billion market, but Mishkin disagreed, saying that fantasy football is not the same as gambling on actual game play.
“The leagues view fantasy as just that,” he said. “It’s the difference between playing Monopoly and real estate.”
Mishkin also said because the NCAA and leagues won a federal case in which Delaware was prohibited from expanding its sports gambling program, their standing to sue has been established. But Olson countered that court records show no evidence that the issue of standing was formally taken up by the court.
Earlier this year, Gov. Chris Christie signed into law a bill authorizing the New Jersey Division of Gaming Enforcement to regulate sports betting despite the federal Professional and Amateur Sports Protection Act, which prohibits the activity except in a handful of states where it was legal prior to the act’s passage in 1992.
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