New Jersey was left standing on the sidelines earlier this month of yet another lush Super Bowl weekend for Nevada’s sports books, its last chance to challenge the legality of the Silver State’s monopoly on bookmaking in the United States allowed quietly and sullenly to slip away.
“The odds were against us, and we’ve known that for some time,” said James Whelan, a former Atlantic City mayor and state senator from Atlantic County, when in November the 10 judges of the 3rd U.S. Circuit Court of Appeals voted unanimously to refuse New Jersey’s petition for a rehearing of its case against the National Collegiate Athletic Association and the four major professional sports leagues, which had sued to prevent the state from implementing a law authorizing sports betting at Atlantic City’s casinos and the state’s four racetracks.
It was the latest in a string of losses for New Jersey in the federal courts dating back to the end of the last decade, and it meant the clock had all but run out on the appellants: Gov. Chris Christie, state Senate President Stephen Sweeney, Speaker Emeritus of the Assembly Sheila Oliver, N.J. Division of Gaming Enforcement Director David Rebuck, Frank Zanzuccki, executive director of the N.J. Racing Commission, and the N.J. Thoroughbred Horsemen’s Association. They had until 15 February to loft a Hail Mary pass in the direction of the U.S. Supreme Court in hopes of overturning a federal law known as the Professional and Amateur Sports Protection Act (PASPA), which prohibits their state and 45 other states from licensing any kind of gambling on sports.
Then suddenly it was a big issue.
Lesniak went to the federal courts in 2009 seeking to challenge the Act’s exemptions. But with nothing to argue but the principle of the thing he was sent packing. In order to show harm the people of New Jersey were asked to amend the state constitution to allow sports betting, which they did in a referendum in November 2011. Before the year was out, an authorization bill was introduced in the Legislature. It passed overwhelmingly. Regulations were drawn up. Christie, a strident pro-market Republican with a take-no-prisoners political style and national ambitions that relied in no small part on redeeming Atlantic City’s flagging private sector, signed it into law that January.
Vowing that they’d be taking bets on the Boardwalk before the year was out, the governor threw down the gauntlet. “If someone wants to stop us,” he thundered, “then let them try to stop us.”
The following February, U.S. District Judge Michael Shipp found for the NCAA and the leagues. He acknowledged the problematic nature of the Act but concluded it was for Congress to address.
Two New Jersey congressmen, Atlantic County Republican Frank LoBiondo and Democrat Frank Pallone representing parts of the northern counties of Middlesex and Monmouth, promptly filed bills to repeal PASPA.
Bill Pascrell, a prominent pro-gambling lobbyist based in the state capital of Trenton, spoke in September at the Global Gaming Expo in Las Vegas to the confidence Team Christie was feeling in its belief that a) PASPA clearly undermined states’ rights under the 10th Amendment to the Constitution; and b) that in the face of such an overarching issue the NCAA and the leagues had had no legal standing in the first place.
“I’m very excited about what New Jersey represents in this space,” Pascrell said. “With the issue of sports betting, it’s not a question of if, but when.”
But it was very much a question of “if,” as it turned out, for not a week later, a three-judge panel of the Circuit Court, sitting in Philadelphia, voted 2-1 to reject the appeal.
“I’m agnostic now,” a dejected Lesniak said. “This is the first time that I’ve started to lose my certainty about whether we’re going to win or not.”
Others were watching closely as well. The federal government had joined on the side of the NCAA and leagues. West Virginia, Georgia, Kansas and Virginia filed briefs in support of New Jersey.
Meanwhile, the LoBiondo and Pallone bills languish in committee, victims of the formidable political machine that is organized sports in America.
So Nevada’s special status as the country’s only legal bookmaker enters another year as solid as ever. Millions of bettors will trek there in the months ahead thanks to it, yet what they will leave behind, according to the American Gaming Association, will comprise less than 1 percent of the money bet illegally on sports nationwide, a number that is believed to lie in the neighborhood of $400 billion.
Super Bowl XLVIII was played on 2 February in, of all places, New Jersey. It was a particularly bitter twist. Atlantic City’s combined gaming revenues have plunged over the last several years to levels not seen since the 1980s.
It also has set them firmly on the path to what likely will be another year of robust growth, considering the sizable chunk the game contributes to their total annual win. Last year’s statewide gross of $202.8 million across 186 books was more than 19 percent better than 2012’s. On a percentage basis, even baccarat, the one consistent growth story Las Vegas’ casinos have had to tell since the recession, didn’t perform that well.
And while February may not be their best month for visitation or total room nights or hotel occupancy or conventions, for gambling revenues it stands apart. The confluence in 2013 of the Super Bowl and Chinese New Year saw Las Vegas and its surrounding communities—home to 90 percent of Nevada’s sports books and 80 percent of its sports betting revenues—enjoy their highest-grossing month of the year at $956.5 million.
The rest of the city makes out handily too. The Las Vegas Convention and Visitors Authority estimates Super Bowl weekend draws more than 300,000 visitors and produces well more than $100 million in non-gaming economic impact.
“Las Vegas is jammed for Super Bowl week and for the NCAA’s Final Four weekend,” Lesniak has groused, “while Atlanta City is a ghost town.”
NJ has now taken its case to the Supreme Court. Read the latest update here: