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Atlantic City

Michael Ein

New Jersey’s challenge of the federal ban on sports betting represents the best, quickest chance the casino industry has to legalize the activity, industry observers at a national gambling convention said.

“The New Jersey litigation is a big focus for everyone who works in the sports industry in the U.S.,” said Joe Asher, CEO of the U.S.-based operation of William Hill, a British betting and gambling firm. “The result in that litigation — whenever it comes — can have a significant effect.”

Asher — who spoke Tuesday at the annual Global Gaming Expo at the Sands Convention Center in Las Vegas — said that given the lobbying power of Major League Baseball, the NBA, the NFL, the NHL and the NCAA, convincing Congress to overturn the ban would be too difficult.

“I don’t see it as realistic,” he said.

The rewards of New Jersey winning the legal battle would be higher compared to other markets, such as Nevada, which is among the four states exempted from the ban and the only in the country that offers a full range of legal sports betting.

The federal ban, also known as the Professional and Amateur Sports Protection Act, was enacted in 1992 and exempted states that had already authorized some form of sports betting at the time.

Delaware, Montana and Oregon are the other three exempted states, although Delaware is the only one of those three where any legal sports betting takes place. Even so, that state offers only a limited form of betting. When it tried to expand its operations, the sports bodies successfully sued to stop the expansion.

New Jersey’s battle is different in that the state is arguing the federal law is unconstitutional, a high hurdle for it to clear because laws passed by Congress are presumed to be constitutional, observers at the conference said.

The state increased its chances of winning when it hired Theodore Olson, a Washington-based lawyer known as a constitutional expert, said Asher, who is licensed to practice law. Asher used to work for Skadden, Arps, Slate, Meagher & Flom, which, coincidentally, is one of the law firms representing the sports bodies.

“There’s no doubt that one day sports betting will be legal,” Asher said. “Hopefully, it’s in a time that is relevant to all of us.”

Industry analysts have said the illegal sports-betting market generates about $400 million in revenue. In Nevada, sports betting represents only a small fraction of gambling in the state. The latest monthly revenue from that state shows casinos winning nearly $6 million through sports betting, which is about half a percentage point of the $1 billion the industry pulled in during July.

The financial payoff for New Jersey is expected to be much greater because of the greater density of fans and proximity to the New York, Philadelphia, Boston and Baltimore sporting markets, observers said.

“The New Jersey market, in particular, if it were to become legal, would become a big market,” Asher said.

Much of the action in sports betting comes as gamblers watch a sporting event and wager on odds and contingencies as the game unfolds. Because Nevada offers mobile gaming from any device within the state, betting from home and while a game is in progress has become the most popular combination, said Jeff Burge, chief financial officer of Cantor Gaming.

Even if New Jersey were to win in court, officials would limit sports betting to racetracks in the state and casinos in Atlantic City. Mobile gaming has been approved, but only while on a casino property. That would mean gamblers would have to travel to Atlantic City to wager on their mobile devices. At the moment, a bill to legalize Internet gambling remains stalled in the Legislature.

In the absence of legal hurdles, observers said they believe mobile gaming would be where sports betting would flourish most.

“Once regulation sets it up, penetration is going to come through mobile,” said Nicky Senyard, CEO of Income Access, a Montreal-based marketing company.

Others believe the social aspect of watching sports, making a bet and getting cash in hand would remain popular.

“A growing percentage of the business will go mobile, but it will never replace the over-the-counter business,” Asher said.

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