Sports Betting Starts In New Jersey After A Decade Of Legal Battles

Jun 12, 2018
Originally published on June 13, 2018 6:52 am

New Jersey is about to cash in on sports betting.

After a protracted legal battle and millions spent in court costs, the state will be able to accept legal wagers on sporting events, thanks to an opinion last month from the U.S. Supreme Court that overturned a federal ban on sports wagering.

The atmosphere has public officials and gambling houses alike feeling like they just hit the jackpot.

"I'm happy with this," says Dennis Drazin, who runs the Monmouth Park racetrack in Oceanport, N.J. "We're going to make money. We're going to save racing. The state's going to make money. This is a win-win for everybody."

The New Jersey Thoroughbred Horsemen's Association, which Drazin oversees, was a plaintiff on some of the lawsuits against the major sports leagues and the NCAA, which fought for years to keep the federal ban on sports betting in place.

Early in the battle over sports betting, Drazin says he realized that the track could not subsist on race earnings alone. It would need another source of revenue. "Sports betting means survival for Monmouth Park," he says.

Now Monmouth Park, in partnership with the sports wagering company William Hill, is preparing to open the doors of its newly developed sportsbook and grandstand later this week.

The racetrack is not the only venue set to take advantage of legalized sports betting. Several casinos in the gambling resort town of Atlantic City have announced that they too will offer a place to wager on athletics.

Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming Hospitality & Tourism at Stockton University, says sports betting could help struggling Atlantic City reshape its image for a younger crowd as it tries to diversify its reputation.

"There is a whole new market that will be coming to New Jersey now, and they'll be coming not just for sports betting," Pandit says. "They'll be coming for the experience. We are gaming. We are entertainment. We are hospitality. We are food and beverage. All of the above. And we have a beach."

One of the biggest financial winners of the court decision may be the state of New Jersey itself.

Under a bill passed by the state Legislature last week, New Jersey would tax in-person wagering at 8.5 percent. Online bets would be taxed at 13 percent.

In recent legislative testimony, state Treasurer Elizabeth Muoio predicted that New Jersey would earn about $13 million from sports betting in its first year.

Other observers said that was a conservative calculation. The American Gaming Association estimates that people in the U.S. illegally wager $150 billion on sports annually.

But the legalization of sports betting nationally has not come without its hiccups in New Jersey.

The four major professional sports leagues — baseball, basketball, football and hockey — and the NCAA still greet legalized sports betting with skepticism.

At first, the leagues asked New Jersey lawmakers to levy an "integrity fee" on each bet, money the leagues said would help to police illegal wagering and game-fixing. The Legislature declined.

The leagues also asked state legislators to require casinos and racetracks to share data and information on betting patterns.

"If casinos see the brother of a player come into a casino 10 minutes before a game, place a large bet on his brother to perform poorly in the game, and make comments about how the fix is in, the casinos have no obligation under this law to contact us directly and let us know," said Bryan Seeley, a representative of Major League Baseball, in legislative testimony.

Still, none of the wrinkles in the last few weeks of ironing out the details of sports betting in New Jersey seem to have overcome the euphoria many officials say they feel at having the legal blessing to offer wagers on athletics.

In 2007, Rudy Garcia, the former mayor of Union City, went to place a bet with his bookie and instead became entangled in an FBI sting. He was arrested and charged, though the charges were later dropped.

His friend and law partner, Ray Lesniak, heard what happened and says he found the whole ordeal unfair. "I got very concerned that he was arrested for doing something here in New Jersey that he could've gotten on a plane and [done] in Las Vegas."

A state senator at the time of Garcia's arrest, Lesniak decided to do something about what he calls an injustice.

He successfully pushed for an amendment to the New Jersey Constitution that allowed the state to pass a law legalizing sports betting. Then, Lesniak and the administration of then-Gov. Chris Christie went to court against the four major sports leagues and the NCAA, which filed lawsuits aiming to uphold the federal ban on sports betting.

The ensuing legal battles lasted years but ended in May, when the U.S. Supreme Court overturned the federal Professional and Amateur Sports Protection Act of 1992, calling it unconstitutional. Although states had a chance to legalize sports betting before the passage of PASPA, only four did. New Jersey was not one.

"All along, no one gave me a chance," Lesniak says, about his years-long fight to overturn the federal ban. "All these great legal minds [said,] 'Lesniak has no idea what he's talking about. There's no way this is going to happen.' That's why I feel just a little bit of self-satisfaction."

Gov. Phil Murphy signed the sports betting legislation into law Monday.

Copyright 2018 WHYY. To see more, visit WHYY.

AUDIE CORNISH, HOST:

Later this week, gamblers in New Jersey will get their first chance to place legal bets on sports games. The U.S. Supreme Court last month overturned the federal ban on sports betting. The decision came in a case with roots in the Garden State. Joe Hernandez from member station WHYY the story.

JOE HERNANDEZ, BYLINE: Ten years ago, the former mayor of Union City, Rudy Garcia, went to place a bet with his bookie. What he didn't know was that it was an FBI sting. Garcia was arrested and charged. His friend, Ray Lesniak, heard what happened to Garcia and found the whole ordeal unfair.

RAY LESNIAK: I got very, very concerned that what he - he was arrested for doing something here in New Jersey that he could have gotten on a plane and put in a bet in Las Vegas.

HERNANDEZ: Lesniak was a state senator at the time, so he decided to do something about it. He and the administration of then-Governor Chris Christie went to court with the four major sports leagues and the NCAA who wanted to keep the federal ban on sports betting in place. That produced a years-long legal battle, which finally ended in May when the U.S. Supreme Court ruled that the Professional and Amateur Sports Protection Act of 1992 was unconstitutional.

LESNIAK: And all along no one gave me a chance - not one. All these great legal minds, you know, Lesniak has no idea what he's talking about. There's no way this is going to happen. That's why I feel just a little bit self-satisfaction.

HERNANDEZ: Gambling analysts say the legalization of sports betting could become a huge moneymaker for states across the country. The New Jersey Treasurer guesses that the state will earn about $13 million in tax dollars from sports betting in its first year. Others say that's conservative. The American Gaming Association estimates that people in the U.S. illegally wager $150 billion on sports annually. But the legalization of sports betting nationally hasn't come without its hiccups in New Jersey. Critics continue to oppose it, even if some of their arguments are still hypothetical. Here's Bryan Seeley of Major League Baseball testifying at the New Jersey state Legislature.

(SOUNDBITE OF ARCHIVED RECORDING)

BRYAN SEELEY: If casinos have information that a fix is in, if casinos see the brother of a player come into a casino 10 minutes before a game, place a large bet on his brother to perform poorly in the game, and make comments about how the fix is in, the casinos have no obligation under this law to contact us directly and let us know.

HERNANDEZ: And it's not just the MLB that's concerned. The four major professional sports leagues, including basketball, football and hockey, as well as the NCAA, continue to argue that legalized sports betting could compromise the integrity of their games. But the leagues have run out of cards to play. And last week, the state legislature unanimously passed a bill that lays the groundwork for sports betting in New Jersey. On Monday, Governor Phil Murphy signed it, and that makes Dennis Drazin happy. Drazin runs the Central New Jersey racetrack Monmouth Park.

DENNIS DRAZIN: Sports betting means survival for Monmouth Park.

HERNANDEZ: Drazin also heads the New Jersey Thoroughbred Horsemen's Association, which filed suit against the leagues as well and spent more than a million dollars in legal fees. He says horseracing is an unsustainable business model and that the track needs a second source of revenue. That's why Drazin and sports betting company William Hill spent millions to develop a sports bar and grandstand at Monmouth Park while the lawsuits were still winding their way through the courts. The track gambled big on sports betting and won.

DRAZIN: I'm happy with this. We're going to make money. We're going to save racing. The state's going to make money. This is a win-win for everybody.

HERNANDEZ: Now, it's time to cash in. For NPR News, I'm Joe Hernandez. Transcript provided by NPR, Copyright NPR.