Legal

A federal judge in New Jersey barred a law that would legalize sports gambling in the state, siding with organizations including the National Collegiate Athletic Association and the National Football League, which sued to block the legislation from taking effect.

The state law, signed by Republican New Jersey Governor Chris Christie in January 2012, permits wagering on professional and college sports at racetracks and Atlantic City casinos.

The NCAA, NFL, National Basketball Association, National Hockey League and Major League Baseball, along with the U.S. government, argued that the measure would undermine the integrity of professional sports, and should be barred under a 1992 federal law requiring states to restrict sports betting. New Jersey argued that the federal law was unconstitutional.

“After careful consideration, the Court has determined that Congress acted within its powers and the statute in question does not violate the United States Constitution,” U.S. District Judge Michael Shipp said in a ruling yesterday.

New Jersey lawyers argued that the federal law violated the state’s sovereign rights. The U.S. Professional and Amateur Sports Protection Act of 1992 bans sports betting in all but four states: Nevada, Delaware, Montana and Oregon.

 

Kevin Roberts, a spokesman for Christie, said he was looking into the matter and declined to immediately comment on the injunction.

Competitive Games

The judge issued an injunction prohibiting New Jersey from “sponsoring, operating, advertising, promoting, licensing, or authorizing a lottery, sweepstakes or other betting, gambling, or wagering scheme” based on amateur or professional competitive games.

Legalized sports gambling could generate $1 billion in bets and as much as $100 million in new annual revenue for the state in its first year, William J. Pascrell III, a lead lobbyist for the measure, said in an earlier interview.

The sports leagues earlier challenged Delaware’s betting rights and, in 2009, the U.S. Court of Appeals in Philadelphia ruled that the state could only offer “parlay” bets on at least three NFL games, not single games.

New Customers

As Atlantic City’s dozen casinos have suffered due to increased competition in neighboring states including Pennsylvania, backers of the sports betting plan saw it as a way to lure new customers and reverse the declines.

 

Spokespersons Greg Aiello of the NFL, Tim Frank of the NBA, Bob Williams of the NCAA, Bernadette Mansur of the NHL and Pat Courtney of MLB didn’t immediately reply to e-mails seeking comment on the judge’s ruling.

Senator Ray Lesniak, a Democrat from Elizabeth who sponsored the referendum legislation, said the injunction delays Atlantic City’s plans for as long as one year. Lesniak said an FBI analysis estimated illegal sports betting is a $500 million- a-year industry.

“Obviously, we’ll take an appeal but that delays any opportunity to have sports betting for at least a year,” Lesniak said today in a telephone interview. “Meanwhile, Nevada and Las Vegas will keep raking in those dollars from sports betting and the tourism that goes with it.”

 

Lesniak was also a sponsor of legislation signed by Christie this week that would legalize Internet gambling as well in an attempt to boost the Atlantic City’s fortunes. The city is floundering after six consecutive years of declining gambling revenue.

Social Atmosphere

The city’s 12 casinos generated $3.05 billion in revenue last year, down from a peak of $5.2 billion in 2006.

“For Atlantic City to become the type of resort Las Vegas is we need to have the type of sports betting that Las Vegas has,” Lesniak said. “Atlantic City will do OK, but it will always be a shadow of what it could be” without sports gambling.

He said sports betting in New Jersey would be a “multibillion-dollar” industry. People love the excitement of sports betting, including the social atmosphere and watching games on television with friends in casino lounges, Lesniak said.

“I can’t understand how Congress can allow this to continue,” he said. “I also can’t understand why other states don’t stand up to fight for this.”

The case is National Collegiate Athletic Association v. Christie, 12-4947, U.S. District Court, District of New Jersey (Trenton).

http://www.bloomberg.com/news/2013-03-01/federal-judge-rules-against-new-jersey-sports-betting-bid.html