WEEKLY FEATURE: Judge Quashes Sports Gambling in New Jersey

Professional sports leagues and the NCAA successfully sued last week to block New Jersey from permitting sports betting, which had been scheduled to begin at one state racetrack as early as October 26 at Monmouth Park racetrack (l.). The state believes that a federal ban on sports betting applies only to state regulated betting. The state’s plan would have the bookmakers regulate themselves. A full court will hear both sides at some future date, but the injunction stops the betting from starting.

New Jersey’s plans for sports betting were stopped last week, just days before Monmouth Park racetrack—which is partnered with British bookmaker William Hill—planned to begin taking bets as early as last weekend.

The professional sports leagues and the NCAA sue for an injunction to stop the track from taking bets saying that the state is simply trying to illegally circumvent a federal ban on sports betting.

The state responded that the league’s claims are meritless and that it remains confident that it has a legal plan to allow sports betting.

The NFL, the NBA, the NHL, Major League Baseball and the NCAA had requested an injunction to keep the bettors on the sidelines. U.S. District Judge Michael Shipp agreed with the leagues that betting at Monmouth would cause “irreparable harm” to the leagues, although he didn’t clarify why the same harm isn’t inflicted each week when bets are taken in Nevada and Delaware on NFL games.

“More legal gambling leads to more total gambling, which in turn leads to an increased incentive to fix plaintiffs’ matches,” Shipp said.

So far, Monmouth Park—which had hoped to begin taking bets on Sunday—was the only venue ready to test whether New Jersey’s take on sports betting is legal. The track reportedly spent more than $1 million on a grand sports bar that would have accepted wagers on the games.

New Jersey argues that a federal appeals court ruling last year spelled out how the state could implement sports betting despite a federal ban.

The state tried to overturn the federal ban, but Shipp and several appeals courts overturned the state’s sports betting law. However, during the arguments, rulings indicated that the state could simply repeal its laws against sports betting and allow non-state-regulated betting to take place, contending that was not prohibited by the Professional Amateur Sports Protection Act that passed in the early 1990s.

Governor Chris Christie signed a law that repeals state prohibitions against sports betting and the state and now feels racetracks and casinos—which would regulate themselves—can offer sports betting through a previous 2012 state law.

The leagues contend that the argument is an end run by New Jersey around the 1992 federal ban since racetracks and casinos are heavily regulated by the state and that any betting there would constitute state-authorized sports betting.

The leagues also claim they will suffer “irreparable harm” if sports gambling is allowed in New Jersey.

New Jersey countered that the leagues are trying to get the federal government to interfere in state laws. The state also contends that the leagues can’t prove that sports betting in New Jersey would cause them irreparable harm.

“Plaintiffs’ claims that their multi-billion-dollar businesses will suffer irreparable damage from even short-term wagering at Monmouth Park when similar wagering has taken place throughout the State of Nevada for more than fifty years—and to a much greater extent—are unsubstantiated and cannot be credited,” the brief states, according to the Associated Press.

Nevada is one of four states exempt from the federal ban, but is the only one with true sports books. Courts told Delaware that it could only implement parlay style betting that was legal prior to the passage of PAPSA.

Shipp imposed the temporary restraining order until a hearing is scheduled on the merits of the New Jersey unregulated arguments.

A spokesman for Christie contends that the injunction isn’t the end of the road for the measure.

“This is a temporary order while the core issues surrounding sports wagering in New Jersey are fully considered by the court,” spokesman Michael Drewniak said in a statement. “We continue to have full confidence in the strength and appropriateness of our position as we move forward in the litigation.”