Experts Call New Jersey’s Sports Betting Play a Long Shot

After losing a bid to overturn a federal ban on sports betting in federal court, the New Jersey Legislature has passed a bill to allow unregulated sports betting in hopes of getting around the ban. But gaming lawyer Lloyd D. Levenson (l.) said he expects the law, if enacted, to be immediately challenged.

The New Jersey Legislature may think is has found a loophole to allow sports betting, but it is likely to close quickly.

That’s the consensus of gaming lawyers interviewed by the Press of Atlantic City on a new law to allow unregulated sports betting in the state already passed by the legislature.

Proponents of the bill say that during the state’s fight to overturn a federal ban on sports betting, an appeals court wrote that New Jersey could simply repeal any prohibitions on sports betting if it wished. As long as the state is not regulating or licensing the practice, the federal ban does not apply, they argue.

But it may not be that simple.

“I would be shocked if the NCAA and the professional leagues just sat by and watched this law go into effect,” said Lloyd D. Levenson, an Atlantic City-based gaming attorney.

The professional leagues and the NCAA were part of the challenge to New Jersey’s first attempt to put in sports betting. The state lost that challenge in federal court and the U.S. Supreme Court recently declined to hear the state’s final appeal and let the lesser court rulings stand.

The law attempts to circumvent the Professional and Amateur Sports Protection Act, or PASPA, which makes it illegal for nearly all states, including New Jersey, to “sponsor, operate, advertise, promote, license, or authorize” sports betting.

Proponents of the bill—which passed overwhelmingly in both house of the state legislature—say that by not explicitly authorizing and licensing sports betting, PASPA doesn’t apply. They hope to see gambling at the state’s racetracks and casinos by fall.

But gaming attorneys told the Press that since the state does license and authorize the casinos and the tracks themselves, the leagues would argue the state is also authorizing sports betting.

“The leagues would come in and say it still violates PASPA,” Levenson told the Press. “They would argue that the casinos are instrumentalities of the state in the fact that they’re licensed. They couldn’t exist without a license, so they are state-sponsored institutions.”

David Deitch, an attorney at Ifrah Law, also told the paper that the legal question will be, “What does state sponsorship mean? And the leagues, I believe, would take the position that the heavy state regulation of the racetracks and the casinos means that this is still being state-sponsored.”

Other lawyers said that allowing sports betting may also violate an even older federal ban.

I. Nelson Rose, a gaming attorney and a professor at Whittier Law School told the Press that the 1961 Federal Wire Act may also come into play. The act criminalizes the use of interstate wire-based communications to bet on sports.

“So you can have sports betting, but you can’t really have the bets made by phone or using the internet,” he said.

Still, state Senator Raymond Lesniak, the principal sponsor of the bill, says he plans to keep fighting for sports betting in New Jersey.

“Some have gotten discouraged by the protracted effort and some have given up the fight,” Lesniak said in an editorial written for the Press. “I haven’t. I continue to pursue what some now consider a ‘Quixotic quest’ to make sports betting legal in New Jersey because I believe we should have the legal right and because it will be good for the struggling casinos, good for Atlantic City’s future and good for New Jersey’s economy.’

The bill is now before Governor Chris Christie, but he said he has yet to review it. The Governor has 45 days before he must decide on whether to sign the bill.

Meanwhile, the sports betting bill does have the support of New Jersey Congressman Frank Pallone, who called on Christie to sign the bill.

“The citizens of New Jersey have spoken loud and clear that they want the opportunity to share in the profits from professional sports betting,” said Pallone. “I continue to believe that New Jersey should be given the same opportunity that other states have already been given with regards to gaming in their states and that the federal government should not stand in the way. I urge Governor Christie to sign this bill quickly and bring sports wagering to New Jersey.”