In a novel approach that could have huge implications for state governments across the country, New Jersey leaped forward Monday in its quest to legalize sports betting by bypassing a federal ban.
Gov. Chris Christie’s office on Monday said that as far as state law is concerned, New Jersey casinos and racetracks are free to take sports bets.
The statement came as the state’s top attorney told police and prosecutors in a formal directive that sports betting in New Jersey casinos and racetracks is generally legal under New Jersey law. People involved in the practice should not be arrested or prosecuted, acting state Attorney General John Hoffman said.
Monday’s announcement comes after years of grinding court battles between the state — which hopes sports betting will revive flagging casinos and racetracks — and the nation’s major sports leagues, which say the practice violates a federal ban and taints honest competition by stoking suspicion among fans that bets are affecting games.
“Victory is near,” state Sen. Ray Lesniak, D-Union, who has led the charge to bring legal sports betting to New Jersey, said Monday.
Monday’s statement signaled a change of tone by the governor, who on Aug. 8 announced a veto of a sports-betting bill proposed after the U.S. Supreme Court refused to review the federal ban. In vetoing the bill, he wrote that he disagreed with court rulings against New Jersey but said the legislation tried to sidestep federal law. “I do believe that the rule of law is sacrosanct,” he wrote at the time.
Dennis Drazin, an attorney who advises Monmouth Park, a racetrack in Oceanport, said his client wants to start taking sports bets in the next 30 days. “If we can do it sooner, we will,” he said, adding that Monmouth Park was “flooded with calls” Monday by people itching to place bets.
But even with the go-ahead from the state, Monmouth Park and other venues could face stiff opposition from the leagues, who could ask a federal judge — again — to stop New Jersey’s sport betting plan in its tracks.
In 2012, Christie signed into law a bill to legalize sports betting in New Jersey.
The NCAA and the four major sports leagues sued to stop the state from implementing it, arguing that it violated the federal Professional and Amateur Sports Protection Act, or PASPA.
That law effectively bans sports betting outside Nevada, Delaware, Montana and Oregon, which received exemptions to maintain sports betting operations in place before Congress enacted PASPA in 1992.
Federal judges repeatedly sided with the leagues and New Jersey was ordered to abandon its sports betting bid.
But during the litigation, judges implied that PASPA merely barred states from actively sponsoring sports betting, not from simply remaining mum on the issue and letting casinos and racetracks do what they will.
In his directive Monday, Hoffman paved the way for the state to take that path precisely — to tacitly allow sports betting without expressly authorizing it.
Some gaming attorneys call the approach a creative workaround to the federal ban; others say it’s a bizarre end-run around the law.
Rebekah Carmichael, spokeswoman for the U.S. Attorney’s Office in the District of New Jersey, declined to comment Monday on whether the federal government will intervene to stop the plan.
On Monday, Hoffman asked the U.S. District Court judge who presided over the leagues’ lawsuit to clarify whether that plan is in line with a prior court order.
While all four major sports leagues have fought to keep sports betting from spreading, NBA Commissioner Adam Silver recently rolled back that opposition, saying at a Bloomberg-sponsored summit that an expansion of legalized sports betting is “inevitable.”
In Nevada, the only state offering a full array of legal sports betting, the practice generated a record $202.8 million in revenue in 2013, according to David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. That was less than 2 percent of the state’s total annual gambling revenue, he said.
Proponents of sports betting say the big boon for Atlantic City wouldn’t come from sports betting revenue itself, but from the attendant benefits of having people visit the town to bet on sports, particularly during the traditionally slow fall and winter months.
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