The ICE Sports Betting USA conference in Manhattan this week is centering on the remarkable change in the U.S. gaming legalization landscape this year.
And just as with the Global Gaming Expo event in Las Vegas in September, the center of the event’s universe on Tuesday was the state of New Jersey and its landmark victory in the U.S. Supreme Court in May.
That was underscored by the selection of the keynote speaker: Ted Olson, the renowned attorney best-known for being on the winning side of the Bush v. Gore presidential election ruling in 2000 but beloved among this crowd for successfully arguing that sports betting case.
The second panel of the day, meanwhile, featured three Jersey boys: lobbyist William Pascrell III as moderator and Monmouth Park operator Dennis Drazin and NJ Division of Gaming Enforcement Director David Rebuck among the speakers.
“We are here in large part because of a wager on sports betting made by the people of New Jersey,” Olson told an audience that was chock full of European gaming business leaders eager to get in on the rapidly expanding U.S. sports betting industry.
The “wager” to which Olson was referring to began with a 2011 statewide ballot question overwhelmingly approved by New Jersey voters. That was followed by subsequent legislation and millions of dollars expended on legal fees to battle the NFL and other sports organizations through the federal courts for six years.
“That was a remarkable gamble on sports betting , so it is fitting that the long, arduous — I would say torturous — odyssey brought us to that day in May,” Olson said. “People say, ‘I will fight all the way to the United States Supreme Court,’ but the Court receives petitions to hear cases in 7,000 to 9,000 petitions per year, and it only takes about 65 cases. So think about those odds that were overcome.
“We surprised everybody — including myself,” added Olson. “I honestly believed that whole time that we were right. But after you lose seven times [in court rulings], or maybe it was six times … ”
Olson added, referring to the addition of seven more states to legalize sports betting in less than seven months: “And who would have thought, when we got started, that this would happen — and so quickly?”
Olson noted, as he has before, that Congress had — and still has — the right to ban sports betting in the U.S. It just didn’t have the right to “commandeer” states into enforcing that ban themselves. So I asked Olson why Congress didn’t just directly ban the betting in 1992.
“That’s a very good question,” Olson said. “It’s easier when you can get someone else to do the thing that you want done, and let them take the burden, and you don’t have the responsibility or the expense.”
At the time, then-New Jersey Senator Bill Bradley, a prime sponsor of the Professional and Amateur Sports Protection Act of 1992, wanted a 50-state ban. But Nevada was fully exempted and Delaware, Oregon, and Montana were granted modest options for forms of sports betting.
Asked if “politics” might have played a role in what was finally found this spring to be an unconstitutional law, Olson replied with a smile, “Politics involved in Congress? I’m shocked!”
During his panel, Rebuck — who had the honor of introducing Olson to the audience — said that one of the most surprising aspects of the sports betting saga came in that 2011 vote that was successful by nearly a 2-1 margin.
“Many of us believed that the vote was going to be very close,” Rebuck said. “That’s a landslide in politics.”
A bid that backfired
Drazin said that the sports organizations made a strategic mistake when they came to the Trenton statehouse this past June seeking a guaranteed slice of sports betting revenues.
“I think the leagues regret calling it an ‘integrity fee,'” Drazin said. “New Jersey beat them back. Senate President [Stephen] Sweeney was very vocal with other states also, saying, ‘The leagues have a lot of nerve — they cost us $10 million in litigation [costs], and now they come with a hand out.'”
Drazin referred to the evolution of the sports leagues’ attitudes toward gambling, noting the establishment of an NHL team in Las Vegas and NFL approval of the Oakland Raiders’ bid to move to the same city. He also cited the leagues’ deals with daily fantasy sports companies.
“Fantasy sports is real gambling, too,” Drazin said. “Anyone that tells me it’s not, we’ll have an argument about it.”
Pascrell pointed out what a learning curve hundreds of newly elected state legislators and 10 new governors will face when it comes to sports betting.
“I doubt many of those elected officials even know what a ‘skin’ is, or GGR,” said Pascrell, referring to branded legal online gambling sites and gross gaming revenue.
When a question was raised about why New Jersey — unlike Nevada — forbids wagers on games played by state universities, Pascrell couldn’t resist calling that clause dating back to 2009 “a god-awful decision.”
A New York state of (sports betting) mind
New York Assemblyman Gary Pretlow, a leading proponent of expanding legalized gambling in his state, gave a shoutout to the Garden State as he spoke on one of the panels.
“I want to commend New Jersey. There’s always a border battle with us, but I was cheering New Jersey on as they went to the Supreme Court,” Pretlow said. “In New York, sports betting is lying on its back, and sticking its feet and its arms in the air.”
Pretlow added that he wished he “had a little more foresight” several years ago when his bill to allow for sports betting at the state’s newly approved casinos (pending the clearing of the federal hurdle) became law without a provision for online sports betting. State regulators have yet to finalize guidelines for casinos in the Catskills and its counterparts further upstate.
“I think they are waiting for some kind of determination as to how we’re going to handle mobile [sports betting],” Pretlow said. “I’m hoping that the governor [Andrew Cuomo] puts something in his budget, which is due April 1.”
Pretlow said he has a “sneaky suspicion” that Cuomo is tying the finalization of casino regulations to a comprehensive sports betting proposal. He added that he hoped that it could be legally concluded that even if someone was “in Montauk Point or Westchester,” if the server is located in a casino, the bet would be deemed to have taken place at that casino. That was the winning rationale in New Jersey several years ago that paved the way for online casino gaming to be rolled out across the state.
Another complication Pretlow said he has found is that the various parties who would be involved in an overall sports betting solution “sing Kumbaya” when they are together, “but as soon as you get them alone in a room, it becomes ‘me, me, me!’ Gaming is a funny industry.”
With more than $500 million having been wagered legally on sports betting this year at the Meadowlands Racetrack, Monmouth Park, seven Atlantic City casinos, and their affiliated online betting sites, Pretlow joked of the gamblers, “I guarantee that most of them are New Yorkers.”
Minnesota and Ohio represented
Minnesota state legislator Patrick Garofalo said on the same panel that he will push for a 10% sports betting tax rate in that state. But Garofalo said his colleagues are not in the sort of rush that some states have been, adding that, “Candidly, we can learn from the mistakes of other states.”
Garofalo added that legalizing sports betting only at brick-and-mortar facilities while passing on online versions “doesn’t make sense. The American sports fan has made his decision, and they want to bet on sports from their couch.”
Ohio state Senator William Coley said of his state, “I expect something [on sports betting] in the first six months of next year.”