NJ Official Says War With Sports Leagues Is Over

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A six-year legal fight between five sports organizations and New Jersey government leaders was “pretty bitter,” the state’s chief regulator told attendees at the Betting on Sports America conference in the Meadowlands last week. But since last spring’s landmark U.S. Supreme Court ruling that opened the door for New Jersey and other states to offer sports betting, Division of Gaming Enforcement Director David Rebuck said things have changed behind the scenes.

“We recognized that after all those years of battling the leagues, that the adversarial position between the state and the leagues and the NCAA was very high,” Rebuck said at the Meadowlands Exposition Center in Secaucus on Thursday. “And we made a decision that we’re going to end this, and reach out to the leagues and figure out what their needs are — and they can learn a lot more about what we do.

“As part of this cooperation, they had asked for the ability, not to have veto power, but they wanted to be able to communicate directly with us about restrictions they might ask for on certain betting. We said we’d get back to them after a review of each request. It’s not an absolute veto power by any means — we’d never give them that — but there is dialogue.”

In the case of Major League Baseball seeking a ban on betting on spring training, as one example, New Jersey officials denied the request. But Rebuck said the discussions have been productive.

“It’s a good thing to have this communication, and we have I think a really good relationship with three of the five [organizations],” Rebuck, said, referring to the NFL, MLB, and NBA. “We need more work with the NCAA, and to do more with the NHL.”

More lessons from Rebuck

That common-sense approach was part of a broad series of points that Rebuck made to the crowd attending the “New Jersey — Land of Opportunity” panel. (I was part of this same panel.)

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The most widely publicized statement of the day by DGE actually came a couple of sessions later, when Rebuck’s deputy Louis Rogacki announced that bettors had plunked down just over $100 million on March Madness in the state, with operators collectively keeping about 10% of that for themselves.

But as for points made directly by Rebuck, he recommended to other states that they:

  • have strong, clear regulations
  • use a reasonable tax rate “in a window of 10-20%” on revenue, not handle
  • decide who will be the operators, whether existing entities such as racetracks or casinos, a state lottery, or third parties to come in and bid
  • grant the regulator two powers — “and if you don’t, you’re in trouble” — civil authority and criminal authority
  • decide on retail sports betting, mobile sports betting, or both

“It’s a big decision for a lot of people,” Rebuck said of that last issue. “If you do not have online, then I would go to the legislature and say, ‘Put something in place to protect the commercial entities, because the online market is huge, it is robust, and [unregulated offshore sites]are going to take a lot of business away from the retail operators. And if you don’t support law enforcement against that, then why are you even having retail operations, because they are put in a very, very difficult position.”

betting on sports america new jersey panel
The BOSA panel focused on New Jersey featured (from left) Hard Rock’s Kresimir Spajic, John Brennan, Jeff Gural, Ray Lesniak, and David Rebuck

Rebuck suggested that other state officials should “be careful on how much money you want to give to the leagues,” as so far none of the states to implement regulated sports betting have mandated that operators pay an “integrity fee,” a “royalty,” or an “official data fee.”

New Jersey mobile vs. New York

When it comes to the number of “skins,” or branded public-facing sports betting sites/apps, New Jersey allows for up to three each for the nine Atlantic City casinos, the three racetracks, and the site of two former racetracks. That makes 42 total. (Or possibly 48.)

And how many skins are contemplated for neighboring New York, a much larger state? A bill has yet to reach Governor Andrew Cuomo’s desk, but tentatively Assemblyman Gary Pretlow, the leader of the state’s regulated gambling expansion efforts, told another Betting on Sports America panel that the total would be just six.

That’s one skin for each of the four upstate New York casinos and also one each for the Seneca and Oneida tribes to offer their own online sports betting in addition to sportsbooks at their brick-and-mortar casino.

So far in less than a year, 12 mobile betting sites are operational in New Jersey, and Rebuck said that he expects that the total could climb into the 20s by this fall’s football season. This includes a pair of pending online sports betting deals involving Hard Rock Hotel Casino, which opened less than a year ago.

Cannibalization concerns

Many legislators continue to fret about concerns such as whether mobile sports betting will cannibalize revenues of longstanding brick-and mortar casinos or racetracks.

What isn’t well understood nationally is that New Jersey went through every stage of this in the past decade. Atlantic City casino operators, once entrenched against mobile gaming, learned to embrace it and even thrive.

That’s because the Garden State has had legal online casino gaming since 2013 (as has Delaware). And it’s that experience, even moreso than the newer legal sports betting, that gives Rebuck the confidence to be able to tell the audience that the idea of cannibalization is “totally false. Look at the numbers, and see for yourself.”

Rebuck also said that fall NFL Sundays have turned Atlantic City casinos from “dead” to “buzzing with excitement.”

Former state Senator Ray Lesniak, a founding father of expanded sports betting in the U.S., went further in saying that Atlantic City has transformed from welcoming primarily “daytrippers” to sports betting consumers who stay all weekend.

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John Brennan

John Brennan has covered NJ and NY sports business and gaming since 2002 and was a Pulitzer Prize Finalist in 2008, while reporting for The Bergen County Record.

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