Several U.S. legal gambling expansion advocates gathered on a conference call Thursday to celebrate the second anniversary of the U.S. Supreme Court’s landmark decision to invalidate a 1992 federal law that had banned a wide swath of sports betting in every state outside of Nevada.
One even paid particular tribute to the voters of New Jersey, whose overwhelming backing of a 2011 statewide referendum to allow the state’s racetracks and Atlantic City casinos to offer sports betting paved the way for the eventual court victory.
“I’m from Philly, but I’ll give it to you that New Jersey is a tough state,” said Joe Brennan Jr. (no relation to this author), a longtime gaming industry executive. “The legislators weren’t going to back down, and the state’s economy needed it. So they fought long and hard.
“Would a Pennsylvania or a Florida or somebody else like that have fought as long as it took to get it done? I don’t know, but my guess is, probably not.”
Attorneys for New Jersey and its horsemen initially lost at the U.S. District Court level, by a 2-1 margin at the Third Circuit Court of Appeals, and by a refusal by the Supreme Court to take the case.
An amended version of the law passed in 2014, only to lose in similar fashion — including another 2-1 circuit panel defeat — as well as by a 9-3 margin when the entire panel of judges took on an “en banc” review of the case.
Another tip of the cap for New Jersey
Sue Schneider, another longtime U.S. legal gambling expansion proponent who was on the SBC Americas Digital Summit panel, also tipped her hat to the Garden State.
“A lot of people don’t really know the history of the long haul involved,” Schneider said. “Every state in the union really owes New Jersey a debt of gratitude that it went all the way through as it did.”
Brennan added that as much as he initially had wished for a favorable court ruling much earlier in the six-year legal battle, ultimately the scenario played out favorably.
“We’ve essentially benefited from a long gestation phase,” Brennan explained. “If we had gotten a decision in the first two years, I don’t think the pieces were in place yet to make for a really successful marketplace.”
An example, Brennan said, is that the original push for sports betting in the state was to “create foot traffic for the casinos and racetracks.” But by the time Trenton legislators passed a revised bill in Trenton in 2018 that was signed by Gov. Chris Christie, the focus had expanded to mobile wagering — which each month commands more than 80% of the betting handle.
“When we first started, we didn’t even dare throw that in,” Brennan added.
Former state Sen. Ray Lesniak, whose work with Brennan on the issue of expanded gambling in New Jersey dates back more than a decade, recalled having to overcome discussions by national political figures such as U.S. Sen. Harry Reid and U.S. Rep. John Boehner, leaders in their respective chambers, about passing federal sports betting legislation.
“The casinos were drowning, and the New Jersey legislature was trying to throw them a life preserver, and they were saying, ‘No thank you, we don’t like this — we want a federal life preserver,'” Brennan said of Lesniak’s efforts.
Not a sure bet after all
Both men chuckled at the certitude of many opponents over the years that they would prevail over New Jersey.
“I have so many five-star steak dinners that are owed to me by Vegas bookmakers that I’ll be dead before [I eat them all],” Brennan said.
Brennan recalled a panel discussion where an attorney for the NFL — the leading player among sports leagues who sued the state in 2012 to stop the sports betting effort — became “red-faced” as he “guaranteed” that New Jersey would never achieve its goals.
Jack Andrews, a professional sports bettor, said that he was “surprised it took as long as it did” for a court to invalidate the Professional and Amateur Sports Protection Act of 1992.
All three men pointed to the fact that the law curiously delegated power to five sports organizations to be able to sue to stop any state from offering Las Vegas-style sports betting, and that the law “commandeered” states into doing their bidding in preventing such gambling. Brennan bluntly called the law, which all nine justices ultimately found flawed, “a piece of crap.”
“Once it became legal, sports betting could have become like Las Vegas — which is not a great place to bet on sports with so many limits, although it seems for a casual bettor like a great place — or it could be a wide-open, capitalistic market with new companies coming in,” Andrews said.
“The end result has been sort of a mix,” he added. “There are operators who play it like Las Vegas has where professional bettors are not welcome, but others who are pushing innovation to get to the whole spectrum of bettors.”
Lesniak pointed out that his state’s original goal was to be the “exclusive” East Coast state to offer sports betting, rather than to pave the path for all states to have that option.
“But that’s fine,” Lesniak said. “There’s plenty of action to go around.”
Some saw the sports betting ruling coming for months
While the Supreme Court didn’t rule until May 2018, two developments in the previous year offered hints.
In June 2017, the Supreme Court, in a rare departure, ignored the advice it had sought from the U.S. Solicitor General’s office and elected to put the case on its short list of issues to review.
“When the court took the case anyway, at that point in time I knew that we had it won,” Lesniak said.
For Andrews, the moment of clarity came just after a Dec. 4, 2017, oral argument in Washington, D.C., in which several justices seemed highly skeptical of the stance of the leagues and the federal government.
Andrews said that at the time, he was a frequent visitor to Delaware racinos because the state was exploiting its unique legal loophole to offer parlay betting on NFL games. His wagering levels helped put him in contact with many high-ranking gaming executives, including Delaware native Joe Asher, the president of the William Hill U.S. arm of the European sportsbook service.
Asher had particular reason to follow New Jersey’s quixotic effort because his company already had a partnership with Monmouth Park racetrack to manage its sportsbook once the wagering became legal.
“At that point, Joe said to me, ‘We’ve got this, we’ve absolutely got this,'” Andrews said. “It was the most confident I had ever seen him. And he was right.”
Lesniak — who noted that he is “as big a liberal as you can imagine” — said that PASPA was an obvious “states’ rights” 10th amendment violation because of the demands the federal government placed on states to do its bidding.
“They tried to make a political compromise, and nobody challenged it for all those years — until New Jersey did, and here we are,” Lesniak said.
Brennan concluded by crediting those whose contributions — many behind the scenes — proved crucial: lobbyists Bill Pascrell III and Dale Florio; Christie; Assemblyman John Burzichelli; and the late former Resorts CEO Dennis Gomes and ex-state Senator James Whelan of Atlantic County.
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