U.S. Supreme Court gives New Jersey Sports Betting a Lifeline

NJ Supreme Court

New Jersey’s ongoing quest to bring legalized sports betting to its casinos and racetracks took a considerably positive turn earlier this week with the news that the U.S. Supreme Court has agreed to review an August 2016 U.S. Court of Appeals decision that ruled against the Garden State.

The lower court deemed that New Jersey’s attempt to legalize sports betting in the aforementioned facilities, an initiative that originated with a 2011 state constitutional amendment by voters, was a violation of the Professional and Amateur Sports Protection Act (PASPA).

After Years of Frustration, Reason for Optimism

The news brings a ray of hope for the Garden State’s sluggish land-based casino industry in particular, and has a number of area politicians envisioning a significant uptick in consumer activity and spending in Atlantic City if the higher court rules in the state’s favor. The fact that the U.S. Supreme Court has become increasingly selective in which cases it chooses to take on, and yet has agreed to hear arguments, is also reason for optimism.

Although the 2011 vote by the state’s residents legalized betting exclusively on professional sporting events, the subsequent law regulating the activity that was signed by Governor Chris Christie prompted lawsuits from not just the four major pro sports leagues, but the NCAA as well. Those litigations have prevented the state from ever implementing sports-based wagering, and have served as the impetus for the legal battle still being waged.

Nevada, Delaware, Oregon and Montana are the only four states that were unaffected by the 1992 passage of PAPSA, as the legalized sports betting in their jurisdictions was protected by a grandfather clause. Of the four, only Nevada allows single-game wagering, while the other three states authorize various forms of parlay bets.

Effort Boasts Bi-Partisan and Key Industry Support

True bi-partisanship cooperation, an exceedingly rare phenomenon in today’s political climate, is at the heart of the sports betting legalization issue in New Jersey, as members of both sides of the aisle are motivated to see the area’s once vibrant casino industry regain traction.

Furthermore, the state’s efforts have received notable endorsements from both the American Gaming Association and American Sports Betting Coalition, two industry bodies that would have a vested interest in New Jersey ultimately winning their appeal.

Drastically Different Landscape Since PAPSA passage

In their attempts to persuade the highest court in the land, attorneys for the state are likely to hone in on the drastic changes with respect to both sports betting in general and the professional leagues’ overall stance on the subject that have transpired in the 25 years since PASPA was passed.

Three of the plaintiffs – Major League Baseball, the National Basketball Association and the National Hockey League – have entered into partnerships of varying scope with real-money daily fantasy sports companies. Meanwhile, some experts believe the amount of money illegally wagered on sporting events each year in the U.S could be as high as $400 billion.

NJ Casinos Already Wading Into Sports-Based Wagering

Meanwhile, New Jersey’s Resorts Casino and daily fantasy sports provider Sport AD recently announced a first-of-its-kind partnership that allows the casino to offer the latter’s product exclusively to its land-based and online customers within the state.

That development at a minimum implies that the appetite for sports-based wagering activity in New Jersey residents likely remains as vibrant as when they voted to legalize betting six years ago. A favorable decision by the Supreme Court would not only lead to a significant boost in revenue from conventional sports wagering, but could even open the door for a number of new partnerships involving daily fantasy sports companies and area casinos.


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