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Sports Betting Battle Begins


Sports leagues soften as stakeholders prepare for legal sports betting

The eyes of the gaming industry are on Washington, D.C. today, as the United States Supreme Court hears arguments in Christie v. National Collegiate Athletic Association, New Jersey’s appeal in favor of its sports-betting law, which also challenges the constitutionality of the federal ban on sports betting.

The case before the high court is the second appeal from the state of New Jersey after the four major sports leagues sued to block a state-approved law authorizing sports betting at New Jersey casinos and racetracks. The court declined to hear the first appeal, affirming lower-court rulings that New Jersey’s law violated the Professional and Amateur Sports Protection Act (PASPA), the 1992 law that made sports betting illegal in all but four grandfathered states, with only Nevada permitted full-blown sports books.

The current case is the result of a law signed in 2014 by New Jersey Governor Chris Christie repealing the ban on sport betting in favor of self-regulated sports betting at the casinos. The 3rd Circuit Court of Appeals affirmed a lower court ruling that the new law violated PASPA, but in a surprise to many, SCOTUS agreed to hear New Jersey’s appeal, which argues that PASPA itself is an unconstitutional imposition of federal over state authority.

The American Gaming Association, which has filed an amicus brief in favor of New Jersey’s case and has put a repeal of PASPA at the top of its lobbying agenda, joined Spectrum Gaming on Friday for a preview of today’s hearing that featured talks from government officials educators, lawmakers and attorneys including Ted Olson, the partner in Gibson, Dunn & Crutcher that will argue New Jersey’s case before the Supreme Court today.

Meanwhile, potential stakeholders in a legalized sports betting market publicly offered new opinions on the issue, not the least of which was one of the plaintiffs in the original lawsuit, the National Basketball Association. On ESPN Radio’s Mike Golic and Trey Wingo show last Monday, NBA Commissioner Adam Silver repeated his support of legalizing sports betting in the U.S.

Silver told hosts Golic and Wingo he’s in favor of lifting the federal ban on sports betting, but with a federal law to regulate it. He said any state should be able to decide if they want sport betting, but all under the same federal regulatory framework.

Silver, who first came out in favor of sports betting in a 2014 op ed piece for the New York Times, commented that his view on the subject is different than his predecessors who sued to block the first New Jersey law. “My position, which is a little different than my predecessors, has been that we should regulate it, we should legalize it,” he told the ESPN hosts. “Because it’s not to me an issue of whether I am ‘pro’ or ‘con’ sports betting. We know now that it goes on, largely underground, hundreds of billions of dollars are bet every year just in the U.S. on sports betting…

“It’s legal in most other jurisdictions in the world, particularly in Europe, where people bet on their smartphones throughout soccer games. It’s closely regulated, they can monitor if there’s an irregularity activity—something we cannot do right now because it’s largely all illegal.”

He added that he differs from New Jersey’s position in the current Supreme Court in that he doesn’t feel it’s a state’s rights issue, but in fact it should be under federal control. “I think there should be federal policy; it should be consistent from state to state,” he said. “I think states should be able to elect whether they want to be in or out. If a state doesn’t want to have legalized sports betting they shouldn’t be forced to do it, so I agree it should be a state decision.

“But I worry a little bit in terms of the monitoring of it, the integrity for the sports leagues…that if you have 50 states all competing against each other, it could be a bit of a race to the bottom in terms of ultimately how to do the best job protecting consumers, the people who place the bets, and protecting the integrity of our league.”

Silver’s views on sports betting are indicative of a general softening on the position by major sports leagues—except for the National Football League, which has remained steadfastly opposed to legal sports betting despite locating a franchise in the gaming capital of Las Vegas.

AGA President and CEO Geoff Freeman said in an interview last week with the Associated Press that even the NFL is more open to taking a second look at sports betting laws.

“I think there are multiple signs of the sports leagues, including the NFL, are taking a fresh look at this issue,” Freeman said. “You don’t place a team in Nevada, in Las Vegas, without an understanding that the issue is changing. Frankly, you don’t play games in Wembley Stadium, where most of the people in the stands are betting on their phones during the game, without an understanding that things are changing. For those that want to see sports betting, the trajectory is in their favor.”

Freeman has said a repeal of PASPA is coming soon, even if the Supreme Court rules against New Jersey and upholds PASPA. However, if the court holds that part or all of the sports-betting ban is unconstitutional, several states are expected to rapidly pass laws creating sports-betting programs. Online betting is expected to come with that, so online gaming legalization is likely to follow sports betting in many states.

Although a decision in the case is likely to take several months, some operators are already preparing for the court to dump PASPA by preparing for legalized sports betting.

In New Jersey, Monmouth Park racetrack has reportedly announced a $1 million sports betting lounge, in a deal with British bookmaker William Hill, and MGM Resorts International is planning construction of a $7 million sports book at its Borgata casino in Atlantic City.

At Monmouth Park, at least part of the facility is already built. The racetrack created a sports-betting lounge four years ago, when the first New Jersey sports-betting law was winding its way through the courts. After New Jersey lost the case, the track turned the facility into a sports bar.

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