Lawmaker wants sports betting legal

Mar 24, 2009 4:04 PM
Staff & Wire Reports |

NJ senator files suit to overturn ban

A New Jersey lawmaker on Monday filed a lawsuit challenging the 17-year-old federal ban on sports betting.

The current law prohibits sports gambling in New Jersey and 45 other states. It is only allowable, if the states choose to legalize it, in Nevada, Delaware, Oregon and Montana.

Delaware has recently made moves toward implementing sports betting in its state lottery, an action that has not gone unnoticed in New Jersey.

For now, New Jersey state Sen. Raymond J. Lesniak (D-Union) and a group of other plaintiffs has filed their lawsuit challenging the Professional and Amateur Sports Protection Act of 1992, which limits legalized sports gambling to the four states.

"How can the people of the state of New Jersey not have the right to do what the people of Nevada can do?" asked Lesniak at a news conference at the statehouse on Monday. "This law is unconstitutional as applied."

The 39-page lawsuit claims, in part, that the federal prohibition violates the Commerce Clause and the Equal Protection clause.

Joining Lesniak as plaintiffs are Interactive Media Entertainment & Gaming Inc., a Washington-based consultant for the electronic gaming industry; and a pair of New Jersey horse-racing advocacy groups — the Thoroughbred Breeders Association of New Jersey and the Standardbred Breeders & Owners Association of New Jersey.

Named as defendants are U.S. Attorney General Eric H. Holder Jr., U.S. Attorney Ralph J. Marra Jr., and an unnamed "number of professional and amateur sports organizations."

It’s believed to be the first challenge to the 1992 law, and it comes a week after Delaware Gov. Jack Markell, in his budget address, proposed instituting a limited form of sports betting known as "parlay cards" in his state. In this type of gambling, bettors must correctly pick the winners of two sporting events in order to win.

Lesniak said legalized sports betting in the Garden State, at places like Atlantic City casinos and racetracks as well as through the Internet and telephone, would generate revenue for the state.

Joe Brennan Jr., chairman of the Interactive Media Entertainment & Gaming Association, said studies by his group indicate there is already about $10 billion a year in illegal sports betting in New Jersey alone, and legalizing it can generate more than $50 million in annual tax revenue for the state.

That’s a small fraction of the current state budget, which totals about $33 billion, but Lesniak said legalized sports betting would also help the state’s horse racing and casino industries prosper. "This is about more than revenue," he said. "It’s about jobs and economic activity."

If Delaware establishes sports betting, as its governor, Jack Markell, proposed last week, its effect on Atlantic City’s worry-battered casinos is uncertain, though one expert said it will have only a small impact.

"That’s not really that big of a threat for Atlantic City casinos," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. "It’s definitely something different, but not the same as straight-up betting, which is what most customers want."

Joe Weinert, vice president of Spectrum Gaming Group, the Linwood-based firm that tracks trends in the gaming industry, said Delaware’s sports gambling "may take some business from Atlantic City, but to what extent remains to be seen. With everything going on, it will be hard to measure."

Atlantic City casino revenue has suffered the past two years in the midst of the debut of slot parlors in eastern Pennsylvania, a partial smoking ban in the casinos and a recession.

Atlantic City casino executives have long worried Delaware would add sports gambling, a move that could attract gamblers away from Atlantic City, according to an expert.

"They have always known that Delaware can do this, and they have worried about it," said Richard C. Perniciaro, director of the Center for Regional Business and Research at Atlantic Cape Community College.