Sports betting: New Jersey expects Supreme Court win and is preparing

It may be weeks or even months before the U.S. Supreme Court rules, but New Jersey expects to win its attempt to end Nevada's virtual monopoly on sports betting, and it is taking steps to get ready.

The director of the state Division of Gaming Enforcement told a global industry conference in London this month that companies offering sports betting platforms should apply for licenses now if they want to get in on the action in Atlantic City.

"Don't sit back and wait for the regulations," DGE Director David Rebuck said, according to casino.org and other industry publications covering the conference. "If you sit and wait, you will be left behind."

Monmouth Park CEO Dennis Drazin said the Oceanport racetrack is expanding its William Hill Sports Bar, named for the London and Las Vegas bookmaking firm that, depending on what the court says, could be taking bets within two weeks of the ruling.

"We built out the sports bar a couple of years ago, and now we're building an expansion out into the grandstand," Drazin said. "We will be ready when the Supreme Court rules."

It is possible the Supreme Court will uphold the 1992 law known as PASPA, for the Professional and Amateur Sports Protection Act, that outlawed sports betting in states that did not legalize it by 1993. Attorneys and industry experts say that is unlikely, however, based on the questions justices posed during oral arguments in December and the fact that the court agreed to hear the case at all.

How fast sports books would open in New Jersey after a ruling depends on whether the court simply overturns PASPA — which could require the Legislature to pass a new regulatory structure — or issues a more narrow decision that simply upholds the creative law New Jersey passed in 2014 to challenge PASPA.

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That state law was New Jersey's second attempt to allow sports betting. A 2012 law that created a regulatory structure for taking sports bets at casinos and racetracks was struck down by federal district and appellate courts, and the Supreme Court refused to hear the appeal.

But the appellate court had noted that PASPA did not prohibit the state from decriminalizing sports betting, so the Legislature and then-Gov. Chris Christie in a 2014 law gave casinos and racetracks broad freedom to regulate themselves on sports betting.

Proponents believe that to overturn New Jersey's approach, the Supreme Court would have to rule that Congress has the power to order states to pass state laws and regulations, a "commandeering" of state authority that New Jersey argues is barred by the Constitution's 10th Amendment.

Drazin said the fastest way for sports betting to start would be for the court to uphold the 2014 law.

"Then we could open in probably a two-week period," Drazin said. "We would need no licenses, no new regulations. We have our own regulatory body that we set up a couple years ago. ... It could be joined by any other entity. Casinos would be free to join, other tracks would be free to join."

Drazin also said a constitutional amendment voters approved in 2011 authorizing the Legislature to legalize sports betting would allow tracks and casinos to take sports bets over the Internet.

Meadowlands Racetrack owner Jeffrey Gural said he is taking a "patient approach" but that he expects the East Rutherford track would start accepting sports bets by football season if the court ruling allows it. He noted that he "is cognizant" that one of the plaintiffs suing to block sports betting in New Jersey was the National Football League, which has two teams playing across the parking lot from his track.

"We have a good relationship with the Jets and the Giants and would like to maintain that," Gural said.

If the Supreme Court were to rule that PASPA was unconstitutional entirely, the Legislature would likely have to pass a new law setting up the regulatory structure for overseeing it. Some experts suggested the state could reinstate the regulatory structure in the 2012 law that was struck down by lower courts.

Connecticut, Mississippi, New York and Pennsylvania all have laws in place allowing for sports betting, but none has as much experience as New Jersey with the regulatory issues, said Bill Pascrell III, a gaming industry lobbyist who also spoke at the London conference.

"No state is better positioned," Pascrell said. "New Jersey has a huge advantage versus the other states."

Rebuck, the state gaming regulator, declined to give an interview to discuss what he told industry insiders, but he issued a statement saying the agency needs to be prepared to investigate and license applicants.

"Under existing law, any business or individual anticipating entering into a commercial transaction with a casino must be licensed or approved by the division," he said. "Many companies have inquired as to the state's licensing requirements in the event they are able to engage in sports wagering operations with our casino industry."

Attorneys who work with gaming vendors say several applications have been made and more are under discussion.

"Casinos are gearing up," said Lloyd D. Levenson, CEO of the Cooper Levenson law firm, who has spent 30 years representing casino vendors. He said some casinos already have contracts with companies to manage their Internet gambling and those vendors may offer a sports book as well.

"Maybe some made contingent deals with those type of companies, maybe some are in the negotiation phase, but they're all having conversation with sports wagering operators," Levenson said.