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TGS SPECIAL REPORT...ANOTHER ROADBLOCK FOR NEW JERSEY
by Bruce Marshall, Goldsheet.,com Editor


Is this the end of the road for New Jersey and its attempt to legalize sports wagering in the state?

Don't bet on it.

Though it would be reasonable to assume as much after the Garden State's latest challenge to PASPA (Professional and Amateur Sports Protection Act), a 1992 law which allowed Nevada, Oregon, Delaware, and Montana, but not New Jersey, to be "grandfathered" by the feds to accept sports wagers) was dealt yet another blow in Federal District Court last week by Judge Michael Shipp. The judge stayed consistent with his previous pattern of ruling against the state and in favor of the professional sports leagues (and NCAA) when issuing a permanent injunction against New Jersey's latest plan that would have repealed the state's ban against sports betting and permitted casinos and racetracks to offer sports wagering.

Last month, Shipp had issued a temporary restraining order against the Garden State's latest attempts (chronicled in depth on these pages earlier this season) to legalize Las Vegas-style sports wagering within its boundaries.

New Jersey, however, remains undeterred. In Trenton, State Senate President Steve Sweeney, almost immediately in reaction to Shipp's latest ruling, vowed to press forward. "We are going to continue pursuing every legal option available. The economic impact that sports wagering can have on New Jersey is far too important to simply shrug our shoulders and move on," said Sweeney. "NBA Commissioner Adam Silver's recent support for expanding the legalization of sports betting was an encouraging step forward. Bringing the underground sports betting industry out of the shadows will be a windfall for New Jersey taxpayers and help stabilize a gaming industry that is critical to the state's economy. It can provide a boost to the casinos, the state's racetracks, and New Jersey's economy for years to come."

(NBA Commissioner Silver's comments, noted in our previous issue, will be further scrutinized and examined on these pages next week).

Similarly, State Senator Raymond Lesniak (left), who originally proposed the re-formulated New Jersey battle plan against PASPA in June, vowed to continue the fight. "Not surprisingly, Judge Shipp bought the leagues' position lock, stock and barrel and has stood in the way of bringing sports betting to New Jersey, but this is far from over," said Lesniak. "We will continue to pursue the effort to allow wagering on sporting events at casinos and racetracks so that New Jersey can reap the economic benefits that Las Vegas enjoys during the Super Bowl, the NCAA tournament and any number of weekends throughout the year. This is important for our entire state, but especially for Atlantic City, where casino closings have resulted in thousands of job losses."

Judge Shipp would base his latest decision upon factors that could be at the center of New Jersey's expected appeal. Shipp again aligned with the leagues, and not the Garden State, on an interpretation of the Third Circuit's previous observation that states can repeal their prohibition on sports betting (which gave New Jersey lawmakers the lane needed, so they believed, to reformulate their new challenge to PASPA) and are permitted to "decide the exact contours" of how they prohibit sports betting, which has some legal experts crying foul.

Daniel Wallach, a partner at Becker & Poliakoff, P.A., a leading expert on gaming law, and whose quotes have appeared on these pages before, was perplexed. In an SI.com interview, Wallach questioned Shipp's interpretation.

"In my view, the phrase the 'exact contours of the prohibition' suggests that New Jersey is free to decide just how much of a prohibition on sports gambling it wants to maintain on its books," said Wallach. "For Judge Shipp (right) to read the Third Circuit's language in the manner suggested by the leagues ignores the plain language and obvious meaning of the words employed by the Third Circuit."

Wallach added that New Jersey's repeal law "comports with prior statements made by United States Solicitor General Donald M. Verrilli, Jr., who asserted in a brief filed with the U.S. Supreme Court that New Jersey was free to repeal its ban against sports wagering 'in whole or in part' without violating PASPA." New Jersey's law, Wallach concluded, "is precisely the kind of law that the Solicitor General said would not be a violation of PASPA."

Judge Shipp also seemed concerned that New Jersey's action to circumvent PASPA via de-regulation would open the doors for other states to do the same. To that end, Shipp would pointedly question New Jersey attorney and former U.S. solicitor Ted Olson about the chances that other states could enact similar legislation to New Jersey's and likewise bypass PASPA. Some observers believe Shipp was not interested in triggering a New Jersey-like domino effect across the country, and prevented so with the permanent injunction.

Though it would appear as if New Jersey is swimming upstream in this matter, legal observers do not believe the Garden State has played its last hand. The state, anticipating Shipp's ruling, had already formulated its plan for appeal to the Third Circuit, a process which commenced within hours of Shipp's latest ruling. If nothing else, Gov. Chris Christie and the other pols in the Garden State are displaying plenty of tenacity and resourcefulness as they doggedly pursue what they believe will prove an economic boost to their state, which has seen its casino gaming revenues dip in recent years in the face of new competition within the region (Pennsylvania in particular). Already in calendar 2014, four of the twelve major casino/hotels in Atlantic City have shuttered. Sports gaming, so the thought goes, could reinvigorate the gaming market in the state and benefit the casinos and racetracks that would be able to include Vegas-style sports books on their premises. (One racetrack, Monmouth Park, as noted in our TGS issue No. 7, was prepared to immediately begin accepting sports bets prior to Shipp's initial preliminary injunction in late October.)

Good old politics, however, will eventually figure to influence how far New Jersey is willing to push the envelope in this matter. To this point, Gov. Christie has been an invaluable ally to the cause, throwing considerable weight (no pun intended) behind the challenge. But as the calendar turns to 2015, the chance that Christie mobilizes a campaign for the White House in 2016 could also have implications for the state's efforts to dance around PASPA. If Christie loses his enthusiasm for the project, or simply doesn't have the time to lend his usual support because of other things on his plate, New Jersey's appetite to continue its challenge in federal court could wane. At the same time, however, if Christie believes the sports gaming issue resonates with the populace and is worth any bump to him in the polls, momentum for any future challenges might not necessarily abate.

Next week: How Adam Silver and the NBA are changing the polemics of the debate, and New Jersey's prospects for appeal.


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