Five sports organizations scored a victory Friday in their lawsuit seeking to block New Jersey from authorizing sports betting.
U.S. District Court Judge Michael Shipp denied New Jersey’s motion to dismiss the federal lawsuit, ruling that the NCAA, NBA, NFL, NHL and MLB have shown they would be harmed by New Jersey’s plan to license casinos and racetracks for sports betting.
“Plaintiffs’ interest in protecting how they are perceived by their fans is sufficient to create the identifiable trifle of injury necessary for purposes of standing,” he said in his decision issued Friday night.
The judge based his decision on a number of studies the leagues provided, including an NBA one conducted in 2007 that showed that 17 percent of those surveyed would spend less money on the league if a franchise were situated in Las Vegas. Shipp reasoned that with several sports teams based in New Jersey, the survey results would apply should New Jersey begin allowing sports betting similar to Nevada.
“Placing professional sports in close geographic proximity to legalized gambling, the exact situation which 17 percent of survey respondents disapproved, would automatically and immediately occur if legalized sports gambling pursuant to the Sport Wagering Law was implemented,” Shipp said in his decision. He added that while most of the provided studies alone may not constitute a direct link between legalized gambling and negative perceptions by fans, “sufficient support to draw this conclusion exists.”
Shipp heard arguments earlier this week from lawyers representing New Jersey and the NCAA and four sports leagues suing the state. New Jersey argued the NCAA and leagues couldn’t adequately show they would be harmed by the issuance of sports-betting licenses in the state and don’t have standing to proceed with the litigation. The leagues countered that the games being bet on are theirs and they have studies that show sports betting affects the perception some of their fans have of the games.
While the judge’s decision affected only whether the NCAA and leagues have standing to sue New Jersey, other questions raised in the lawsuit, primarily constitutional ones, remain.
Shipp said another hearing will be scheduled to consider constitutional arguments after Jan. 20.
The judge previously ordered the U.S. attorney general be given until Jan. 20 to intervene and become a party in the lawsuit, presumably to defend against the constitutional challenge.
Earlier this year, Gov. Chris Christie signed into law a bill authorizing the state Division of Gaming Enforcement to regulate sports betting in conflict with the federal Professional and Amateur Sports Protection Act. PASPA prohibits states from authorizing sports betting except where it was legal prior to the federal law’s enactment in 1992.
Nevada is the only state in the country where all forms of sports betting are legal. Delaware permits only NFL parlay betting, in which gamblers place a single wager on the outcome of multiple games. Montana allows only sports pools and other betting in which players bet against and settle with one another rather than through a third party, such as a casino. Oregon has since discontinued its NFL lottery game.
Christie and New Jersey lawmakers argue PASPA is unconstitutional because it “commandeers” legislative power from some states and not others. The sports organizations counter that PASPA does not require states to pass any laws but prohibits them from authorizing sports betting because Congress believed the spread of state-sponsored sports betting would be harmful.
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