By T. D. Thornton
New Jersey's 5-year legal and political odyssey to permit sports betting suffered another setback on Aug. 9.
By a 10-2 vote on Tuesday, a 12-judge panel from the United States Third Circuit Court of Appeals upheld an earlier U.S. District Court ruling that said a 2014 state law allowing sports gambling only at racetracks and casinos was actually a “de facto authorization” of statewide sports betting that would violate a 1992 federal statute prohibiting it.
Operating officials at both Monmouth Park and the Meadowlands told TDN on Tuesday they were not shocked by the court's vote, but each underscored the need to continue to press the state for additional revenue streams to bolster purses for Thoroughbred and Standardbred racing.
“New Jersey racing would have been helped tremendously by sports betting, no question about it,” said Dennis Drazin, an advisor to the New Jersey Thoroughbred Horsemen's Association, which leases Monmouth Park. “But I can't say I'm terribly surprised by the opinion, given the oral arguments that happened in February. I thought that the court had problems with the concept of doing a partial repeal that only permitted sports betting at racetracks and casinos.”
Jeffrey Gural, the owner of the Meadowlands, expressed a similar sentiment in a Tuesday email.
“I was not surprised although I was surprised at the fact [the vote] was not closer,” Gural wrote. “Hopefully, this discussion will ultimately lead to legalized sports betting. Our focus is on getting the referendum passed that would allow two casinos in the north. We cannot survive long-term without the benefit of casino[s] because we don't have enough horses to race…the purses are so much higher in Pennsylvania and New York, where the purses are enhanced from the slots.”
Since 2011, New Jersey has twice attempted to legalize sports gambling as a way to bolster both the state's lagging casino and racing industries. Both attempts have been opposed by the professional and collegiate sports leagues (MLB, NBA, NFL, NHL and the NCAA), which have collectively argued that legalized gambling in New Jersey violates federal law.
At issue in the latest appeal was the Constitutionality of the Professional and Amateur Sports Protection Act (PASPA), a 1992 federal law that prohibits legalized sports gambling in all but four grandfathered states: Nevada, Oregon, Montana and Delaware.
In its most recent version of the state statute, New Jersey was attempting to permit sports betting by repealing some existing laws that prohibit it–without the state actually being involved in the regulation of sports gambling.
According to the Washington Post, Judge Marjorie Rendell wrote in the majority opinion that this particular form of partial repeal violates federal law, and that in this instance, PASPA is indeed constitutional. But Judge Julio Fuentes wrote in a dissenting opinion that New Jersey's partial repeal of existing sports gambling prohibitions does not amount to an authorization of sports betting, because the state would not be officially involved in regulating that form of gambling.
In the aftermath of the failed appeal, Drazin said the court's ruling did leave the door open for some unspecified “partial repeal that suffices.” But, he added, another way for New Jersey to go about getting sports wagering is to push for a full-blown repeal of all sports betting laws instead.
“So what the legislators and the governor have to look at now is that the voters in New Jersey said they want sports betting,” Drazin said. “They can, instead of limiting it, do a full repeal and the leagues would not be able to stop us. I'm advocating that that's the position the Senate, Assembly and governor should take and do a full repeal…It's clear to me that if you do a full repeal that the leagues cannot stop you and it does not violate PASPA. So my next task is to try and convince the Legislature and the governor to do a full repeal here in New Jersey–a full repeal of any law that prohibits sports betting.”
Drazin continued: “Right now, if you just try and take a look at New Jersey being a leader in this, if we did a full repeal it would send two messages. Number one, the leagues would freak, because if they don't want it at racetracks and casinos, they certainly don't want it permitted throughout the state. And, number two, it might very well motivate [sports leagues] to lobby Congress to change the way things work [federally]. As far as the public is concerned, two-thirds of our voters here in New Jersey want sports betting. Most people who want to bet are doing it now illegally anyway.”
According to the Washington Post, New Jersey has until Nov. 7 to petition the U.S. Supreme Court to overturn Tuesday's appeal decision. Drazin said he expects such a petition to be filed within a week or so. But, he acknowledged, “those are rarely granted.”
Concurrently, at the state level, Drazin said horsemen will continue to push for “a new funding source,” whether it be sports betting or casino expansion.
“Unfortunately, the Legislature did not include Monmouth Park in the [casino] referendum,” Drazin said. “So the casinos, if they happen, will go to northern Jersey, probably Jersey City and the Meadowlands. The horsemen in general, both breeds, will get a small share of revenues…So what we're counting on next, the next important step, is to press the Legislature to give us a bigger chunk of money that would let us be competitive with surrounding states. The focus really has to be on that right now.” @thorntontd
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