BUSINESS

New Jersey offers leagues a cut of betting revenue to fund sports integrity

TAGs: adam silver, daniel wallach, Jim Whelan, New Jersey, PASPA, Ray Lesniak, sports betting, vincent mazzeo

new-jersey-sports-betting-offer-leaguesThursday will see New Jersey state Sen. Ray Lesniak introduce his latest piece of legislation intended to bring legal sports betting to the Garden State. Lesniak has stated his bill will explicitly repeal state-level prohibitions against sports betting at Atlantic City casinos and state racetracks, giving the state a better chance of getting US District Judge Michael Shipp to agree that the state’s plan doesn’t conflict with the 1992 PASPA federal sports betting prohibition.

Gaming attorney Daniel Wallach has expressed doubts as to the wisdom of Gov. Chris Christie’s plan to convince Shipp that the original 2012 sports betting legislation implicitly repealed the betting ban at tracks and casinos. Wallach believes the 2012 legislation did nothing of the kind, leaving Shipp little choice but to reject the state’s latest attempt to circumvent PASPA. (Read Wallach’s detailed argument here.)

Wallach also questions Christie’s argument that federal courts had invalidated only portions of the original legislation, allowing the state to proceed with the allegedly implied repeal portions intact. Finally, Wallach argues that the state’s selective non-enforcement of its own sports betting laws amounts to an “indirect” authorization of sports betting, which would fall afoul of PASPA’s edicts against states authorizing or regulating sports betting within their borders.

On Tuesday, Lesniak told NorthJersey.com’s John Brennan that he mostly agreed with Wallach’s analysis, except for the parts referencing Lesniak’s new bill. Lesniak argued that “states’ rights include police powers to determine where business activity can take place.”

HOW WILL THE LEAGUES REACT?
The pro sports leagues that led the charge to defeat New Jersey’s previous sports betting ambitions have been silent on how they intend to counter the state’s plans. League spokesmen have uniformly uttered ‘no comment’ on whether they will seek to intervene ahead of Shipp’s Oct. 6 date to consider New Jersey’s latest legal gambit or if they’ll wait until Shipp rules to stick a fresh legal thorn in New Jersey’s side.

On Wednesday, NJ.com reported that state Sen. Jim Whelan and Assemblyman Vincent Mazzeo had made an offer to coax the leagues on board. The two pols wrote to National Basketball Association commissioner Adam Silver saying they “appreciated” his recent public comments that the spread of legal sports betting across the US was “inevitable” and that the NBA would ultimately participate in the activity.

The two pols have offered to slap a 0.25% fee on every sports wager placed in New Jersey, with the resulting kitty given to the leagues to help fund sports integrity enforcement programs. The pols believe this could become “a national model for sports betting” that would generate “millions of dollars a year for the leagues.” Neither Silver nor his counterparts at the other leagues have commented on the offer.

Last week, Lesniak said he believed the leagues would ultimately recognize that their legal defeat on the sports betting issue was equally inevitable and that they would “offer a deal” before that day happened. Lesniak believes the leagues “would be willing to stand down for a piece of the action” but suggested some hard bargaining lay ahead.

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