Supreme Court decision paves the way for legal sports betting

“My intention, unless somebody stops us, is to be up and running in two weeks. If the Legislature or the governor says slow down, I’m going to listen to them,” said Dennis Drazin.

Drazin runs Monmouth Park, a racetrack that expanded its bar and lounge to accommodate sports wagering, betting that New Jersey would win its decadelong court battle to overturn the federal ban on legalized sports betting in most states. Major league sports fought New Jersey all the way to the U.S. Supreme Court, which Monday ruled that ban is unconstitutional. It’s a David verses Goliath victory for former state Sen. Ray Lesniak who filed Jersey’s lawsuit.

“Fighting every step of the way, having no one believe that I could win, and now I’m finally coming home with a victory, and the benefits to the state. It’s sweet, it’s a sweet feeling,” Lesniak said.

The high court 6-3 that states could not be forced to regulate sports betting at the same time they were barred from legalizing it. Nevada was the only state that could offer a full slate of sports wagering options under the 1992 federal ban. Meanwhile, illegal sports betting flourished. But, the Supreme Court ruling just created a whole new legal marketplace.

“The illegal market is estimated at close to $150 billion. Vegas last year, where this is legal, had about $250 million in revenues from sports wagering. So, we anticipate that in Atlantic City, once it’s up and running, could be anywhere close to $150 million,” said Rummy Pandit, the executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University.

It’s tough to gauge economic impact because individual states must enact their own sports betting statutes. Six, including New Jersey, already have laws on the books. Thirteen others have introduced legislation. One New Jersey bill seeks to regulate and tax sports betting at casinos and racetracks at 8 percent and online betting at 12.5 percent.

“The state’s going to have the benefit of taxation, that’s going to help programs that are in dire need of an infusion of money at a time where we’re struggling with the budget,” said bill sponsor Assemblyman John Burzichelli.

The NFL’s still playing defense on this issue, stating, “We intend to call on Congress again, this time to enact a core regulatory framework for legalized sports betting. We also will work closely with our clubs to ensure that any state efforts that move forward in the meantime protect our fans and the integrity of our game.”

But the league’s request for a cut of state’s betting revenues, a so-called integrity fee, fell flat.

“The fact that the NFL has been trying to posit an argument for integrity fees is the ultimate hubris, and it’s insulting,” said Bill Pascrell III, a lobbyist representing racetracks and casinos in New Jersey. “Who should we, the taxpayers of New Jersey, pay the NFL a single, red cent? For what? They should already be policing their games.”

Drazin says that in two weeks, Monmouth Park will start taking limited hand bets, on future wagers, like the Super Bowl, perhaps. While New Jersey enacts a regulatory framework, DraftKings is maneuvering to offer a mobile online platform in New Jersey. Some analysts expect legalized sports betting here by July 4.

Trenton lawmakers are suddenly all about speed. A regulatory bill introduced Monday in the Senate not only keeps the tax rates as previously stated, it says those revenues would be dedicated to senior citizens and the disabled. It also adds another tax — 1.25 percent on gaming revenue received by racetracks would be distributed to host municipalities and counties.

The sport betting battle started in 2009 with Lesniak’s lawsuit. A federal judge threw that out in March 2011. Later that year, New Jersey voters approved amending the State Constitution to allow sports betting. Lawsuits made their way to the U.S. Supreme Court twice before Monday’s victory.

To his credit, former Gov. Chris Christie picked up the fight and Monday tweeted, “A great day for the rights of states and their people to make their own decisions. New Jersey citizens wanted sports gambling and the federal Gov’t had no right to tell them no. The Supreme Court agrees with us today. I am proud to have fought for the rights of the people of NJ.”

Gov. Phil Murphy also welcomed the decision, stating, “I am thrilled to see the Supreme Court finally side with New Jersey and strike down the arbitrary ban on sports betting imposed by Congress decades ago. … New Jersey has long been the lead advocate in fighting this inherently unequal law, and today’s ruling will finally allow for authorized facilities in New Jersey to take the same bets that are legal in other states in our country.”

The governors will probably be invited when Monmouth Park organizes a soft launch, according to Drazin.

“There may be a soft opening where we take some limited bets from people like the governor, if he’s interested. Sen. Lesniak has already called me, he wants to be first. Congressman Pallone called me, he wants to come over. Gov. Christie always said he’d like to do it. There’s probably 30 or 40 people in this room who might take a bet today if I let them,” he said.

An earlier bill noted New Jersey would prohibit betting on collegiate sports in New Jersey. And it would also ban betting on any New Jersey college teams playing out of state. All those issues will be debated. Lesniak said his one concern is that Trenton lawmakers would get bogged down on the details, but that doesn’t seem likely.