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Monday, September 8, 2014

If At First You Don't Succeed, Fail Fail Again....

After vetoing the bill to remove state prohibitions against sports gambling in New Jersey at casinos and racetracks because the Governor felt the legislature moved to fast and needed to respect the ruling of the 3rd Circuit Court, Governor Christie has now decided to issue a directive exempting racetracks and casinos from prosecution for violating the laws which prohibit sports betting in New Jersey provided they don't accept wagers on NJ sports teams and sporting events in New Jersey.  This directive takes effect immediately.

What changed in the Governor's mind?  Most likely finding his presidential chances going down the tubes as fast as an Atlantic City casino (four down thus far in 2014 and rumors of at least one more heading for the chopping block).

All I can say is don't plan on making your first sports bet anytime soon in New Jersey for the state has asked the 3rd Circuit to rule whether or not this directive addresses the courts objections.  My money says this will not pass muster and you can be sure the sports leagues and the NCAA will be filing injunctions shortly.  (Disclosure:  My legal experience comes from one semester of Business Law) 

Didn't the 3rd Circuit say there is nothing in the Federal law (PASPA) which says sports wagering would be illegal if a state repealed its prohibitions against sports betting and as long as the government doesn't sanction it?  Well, having the acting attorney general telling the various parts of state government they won't be prosecuting casinos or racetracks for breaking the law is not repealing the law, it is technically saying there are more important things in the eyes of the Office of Attorney General to prosecute.  Besides, a directive is not law, there is nothing to stop the next Governor of New Jersey (theoretically) from having the directive reversed and making sports wagering illegal again.  Unless the laws against sports wagering are repealed, I don't see the court giving its blessing.

But let's say the directive in effect voids the law for casinos and racetracks and accept the reality no Governor is going to reverse the directive (Ever see a state turn off a revenue source?), the next problem the state will have is one could argue the directive is in effect sanctioning sports wagering because it only shields two industries from prosecution.  The fact the state is sanctioning the activity is problematic to the court; the directive would have to shield all industries from prosecution to avoid the sanctioning issue.  Repeal the law is repealing it universally, not picking and choosing who can or who can't. 

Then comes how the money from sports betting gets divvied up.  What do you call it if the state or an agency decides X% goes to casinos or divided up between racetracks and purses and y% goes to the state treasury; to me it still sounds like the government is legalizing sports wagering which violates PASPA.

Of course, if the state is not regulating and sanctioning sports gambling, how can the state keep the 'legal' bookies from offering betting on sporting events in New Jersey or on NJ teams?  You would think imposing any type of restriction on an activity constitutes regulation which would violate the 3rd Circuit court's opinion.


Let's assume the 3rd Circuit says this directive passes its test?  There is nothing to say the Supreme Court suddenly decides to take this case on when it gets to them this time.  They may throw out the circuit court's opinion completely.

But when all is said and done, how does legalized sports wagering benefit Atlantic City or for that matter the racetracks?  If NJ gets away with this (I doubt it), how long do you think it will be until other states remove their laws against sports gambling?  It will be like the casinos, all over the East Coast.  Yes, their revenue will go up, but it would not be anything to get out of state residents to show up in Atlantic City.  Horsemen will see their purses go up but as more states adopt the NJ policy, you will see purses go back down; not to the current levels but down just the same.