Dennis Drazin doesn’t want to be jailed for offering sports betting at Monmouth Park racetrack, but he might risk a civil lawsuit if necessary.
“I’m aggressive in that I’m willing to be the first,” said the chairman of the track in Oceanport, Monmouth County. “(But) I’m trying to be conservative and do it in a way as to make sure I don’t break the law.”
Since Gov. Chris Christie signed into law a bill that would allow sports betting at New Jersey casinos and racetracks, operators of those facilities have avoided taking a stance on the activity simply because the state law contradicts a federal ban limiting sports wagering to Nevada, Delaware, Oregon and Montana.
The possible legal entanglements of going up against the federal government, however, have businesses skittish about being the first to go against the ban.
“We’re certainly interested in the concept, but from a practical point of view, we’re going to sit and wait until there’s legal guidance,” said Chris McErlean, president of Freehold Raceway.
Meadowlands Racetrack issued a statement from its chairman, Jeff Gural, who said, “We have no plans to offer sports wagering, and assume there will be a court challenge.”
Atlantic City Race Course representatives did not return requests for comment.
Unlike his counterparts, Drazin said Monmouth Park is willing to go against the federal ban. He believes the new state law may give the racetrack better standing in challenging the federal Professional and Amateur Sports Protection Act of 1992. The act made sports betting illegal within one year of the bill’s passage in every state that did not already allow it. New Jersey had a chance to be among the exceptions but failed to act within the allotted timeframe.
Now, looking to overturn the federal ban, lawmakers and Christie authorized the state Division of Gaming Enforcement to come up with regulations for sports betting. The division recently posted a set of proposed regulations for public comment.
Once those regulations are finalized, the federal government or opponents of legalizing the activity, such as the National Football League, could file an injunction seeking to challenge those regulations. But they may not to need to challenge New Jersey’s regulations, particularly if no casino or racetrack were willing to apply for a sports betting license.
That is where Monmouth Park comes in, said Drazin, who said the racetrack is committed to obtaining a license and challenging the ban in court if necessary.
“He gave us the tools,” Drazin said of Christie. “It’s up to the casinos and racetracks whether they want to run with it.”
At the same time, Drazin and other Monmouth Park officials were cautiously looking at their options, including legal research into the penalties they may face — such as civil liability, but possibly also criminal penalties under certain interpretations, he said.
“If the liability you’re talking about is civil liability, I would take that risk,” Drazin said. “I would get a lot of advice before I risk any liability.”
Monmouth Park already had plans in place to offer so-called “free play” at the racetrack, which would allow patrons to place wagers on sporting events with no prize money but would offer other prizes, such as stays at Atlantic City resorts, Drazin said. Those offerings would help draw patrons to the racetrack and allow for cross-marketing opportunities.
“I don’t think anybody can stop free play,” he said.
Offering those activities would not violate the federal ban and would set the racetrack up for real sports wagering once the legal questions have been answered, Drazin said, adding Monmouth was in the process of choosing a partner with whom it could offer sports betting at the racetrack — at least free play — by November.
“There would be a significant amount of people who would come for free play,” he said. “It’s a way of getting people there.”
There also is pending federal legislation to add New Jersey to the list of exceptions, which may take longer to enact but may offer a third possibility of legalizing sports betting in the state.
Questions remain on the market that exists for sports wagering. In general, it has brought in less money in other markets than casino gambling.
For instance, Delaware allows for sports betting at racetracks, which also operate as casinos. Gamblers waged only about $18 million in sports lotteries during the last six-month period recorded by the state. That paled in comparison — less than 1 percent — to the $2.6 billion waged on video lottery, known as slot machines elsewhere, during the same period.
Sports betting at Delaware racetracks has led to mixed results because only parlay betting is allowed, Drazin said. That means wagers can’t be made on a single event; they must be spread across multiple games.
“It’s not as lucrative,” he said.
Sports bets also can be placed on National Football League games at racetracks only, although the state recently expanded the program to include sports bars, Delaware Lottery Director Vernon Kirk said. Regulators have received about 70 applications for licenses and expect to issue about two dozen prior to the NFL season.
In Nevada, casino gambling brought in a total revenue of $11 billion during the past year, while sports pools accounted for only $157 million of that — or a little more than 1 percent — according to the latest statistics from the State Gaming Control Board.
But sports betting has more potential in Atlantic City, due to its close proximity to New York, northern New Jersey and other high-density areas, said Michael Frawley, chief operating officer for the Atlantic Club Casino Hotel.
“It’s a whole different ballgame,” he said. “The feeder markets to New Jersey are much stronger than Nevada on a consistent basis.”
Frawley said the Atlantic Club would consider offering sports betting, saying the resort was not waiting for others to break new ground, but he stopped short of committing to being among the first to apply for a sports-betting license.
“I’m not a wait-and-see guy,” he said. “Whether (we’re) the first, second or third is irrelevant to us.”
Other casino executives, such as Tony Rodio, president of Tropicana Casino and Resort, have said that until legal questions have been put to rest, they wouldn’t want to put their businesses at risk, particularly if they operate in multiple jurisdictions outside New Jersey.
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