New Jersey lost the first round of its challenge of a federal ban on sports gambling but is vowing to continue fighting.
Gov. Chris Christie’s press secretary, Michael Drewniak, said the state intends to appeal a decision by U.S. District Court Judge Michael Shipp to bar New Jersey from authorizing and licensing sports betting outfits in Atlantic City casinos and at the state’s racetracks.
"We believe firmly in the principles of our position on sports betting and that the federal ban is inequitable, violates New Jersey's rights as a state and is unconstitutional,” Drewniak said in a statement. “We are confident that the federal court of appeals will conclude that New Jersey should be treated equally with other states."
On Thursday, Shipp ruled in favor of the five amateur and professional sports leagues that had sued to block New Jersey from authorizing sports wagering. The judge said that the federal Professional and Amateur Sports Protection Act, which prohibits the activity, is constitutional.
The state had argued the federal act violated the 10th Amendment by commandeering New Jersey’s lawmaking authority. Shipp in his opinion said he believed that Congress acted within its powers when it enacted the law and New Jersey must appeal to lawmakers if it wants to overturn the legislation.
“Although some of the questions raised in this case are novel, judicial intervention is generally unwarranted no matter how unwise a court considers a policy decision of the legislative branch,” the judge said in his opinion. “To the extent the people of New Jersey disagree with PASPA, their remedy is not through passage of a state law or through the judiciary, but through the repeal or amendment of PASPA in Congress.”
U.S. Reps. Frank Pallone, D-N.J. and Frank LoBiondo, R-N.J. have introduced two separate bills, which if either one passes would allow New Jersey to legally authorize sports betting. State officials have said due to opposition by the amateur and professional sports organizations and other lobbying interests, passing either bill will be difficult.
New Jersey would stand to gain millions of dollars with the addition of sports gambling, particularly in light of recently enacted Internet gambling legislation, said Gene Johnson, senior vice president for market research and online studies for Linwood-based Spectrum Gaming Group. Globally, 45 percent of money generated online comes from sports betting, he said.
“It’s a very large part of the interactive market,” he said.
While companies that offer online poker and other casino games will remain interested in New Jersey’s new Internet gambling market, others that focus on sports betting will remain on the sideline until the sports betting lawsuit is settled, Johnson said.
Enacted in 1992, PASPA prohibits states from authorizing sports gambling except in four jurisdictions that already had legalized the activity. Disregarding PASPA, New Jersey proceeded to enact state laws last year authorizing the Division of Gaming Enforcement to license sports betting operations in casinos and racetracks.
The NBA, NCAA, NFL, NHL and MLB, which oppose sports betting because officials believe it will bring the integrity of their games into question and potentially lead to the loss of fan dollars, subsequently sued New Jersey.
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