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New Jersey Sports Betting Law Under U.S. Judge’s Review

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Feb. 14 (Bloomberg) -- A New Jersey law that would legalize sports gambling in the state is under review by a federal judge who said he would issue a ruling in two weeks.

Lawyers for the U.S. argued today during a hearing before U.S. District Judge Michael Shipp in Trenton that a 1992 federal law requiring states to restrict sports betting prevents New Jersey’s actions. Attorneys for New Jersey said the federal law violates the state’s sovereignty.

The U.S. can’t “regulate the state’s ability to govern its citizens or the judgment of the government of the state of New Jersey,” Theodore Olson, an attorney for the state, told Shipp.

The state law, signed by Republican New Jersey Governor Chris Christie in January 2012, would permit wagering on professional and college sports at racetracks and Atlantic City casinos. The lawsuit was filed by the National Collegiate Athletic Association and several professional sports organizations to stop the law from taking effect.

Paul Fishman, the U.S. Attorney for New Jersey, told Shipp today that gambling undermines the integrity of professional and college sports.

The federal law doesn’t constitute a regulation because it “does not require the state of New Jersey to enact laws,” Fishman said. It “doesn’t require the state to do more than what they were doing.”

New Revenue

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.

Sports organizations including the National Football League and Major League Baseball sued New Jersey’s government in August to block betting in the state. The National Hockey League, National Basketball Association and NCAA joined the complaint.

The 1992 federal law bans sports betting except in four states: Nevada, Delaware, Montana and Oregon. Attorneys for New Jersey and the New Jersey Thoroughbred Horsemen’s Association Inc., an intervenor in the case, argued that the law is unconstitutional and should be sent back to Congress for revision.

“The entire statute fails because the rule it establishes goes too far,” Ron Riccio, an attorney for the horsemen, argued.

The horsemen’s group wants sports-betting in the state to help save the Monmouth Park Racetrack in Oceanport, New Jersey. The 142-year-old park will be forced to close if the law fails to take effect, threatening the state’s horse-racing industry and 7,000 jobs, Riccio said.

The state also stands to lose roughly $110 million in tax revenue from the industry, Riccio said.

The case is National Collegiate Athletic Association v. Christie, 12-04947, U.S. District Court, District of New Jersey (Trenton).

To contact the reporters on this story: Sophia Pearson in Trenton at spearson3@bloomberg.net; Phil Milford in Wilmington, Delaware at pmilford@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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