NJ Bill Would Regulate Sports Betting If US Supreme Court Sides With State

Under the bill, casinos and racetracks would have to pay an annual sports betting “integrity fee.”

A man makes bets during a viewing party for the NCAA Men’s College Basketball Tournament in Las Vegas. Ethan Miller/Getty Images

With the U.S. Supreme Court expected to rule soon on New Jersey’s case to legalize sports betting, state lawmakers have introduced a bill that would regulate and tax that wagering.

The bill (A3911) establishes a framework for the licensing and operation of sports betting at the state’s casinos and racetracks and sets tax rates for bets placed in-person and online.

The legislation is likely to undergo several changes depending on what the high court decides, said Assemblyman John Burzichelli, a sponsor of the bill.

The New Jersey sports betting law being considered by the Supreme Court would allow casinos and racetracks to set up sports betting without regulation. The high court could rule in the state’s favor but make comments on regulations, potentially forcing lawmakers to pass new legislation to allow New Jerseyans to make bets immediately.

“Until the Supreme Court speaks, we don’t know the scope of what the next step is,” said Burzichelli (D-Gloucester). “The court’s ability to interpret is far ranging.”

As presently written, the bill would impose an eight percent tax on revenue from wagers placed at casinos and racetracks and a 12.5 percent tax on revenue from online bets. The Division of Gaming Enforcement would regulate the sports gambling operations. Only people 21 and older could place bets on professional and collegiate games, though wagers on collegiate games that take place in the state or involve New Jersey schools would largely be prohibited, with an exception for bets on tournaments.

Casinos and racetracks would also have to pay an annual sports betting “integrity fee” of the lesser of $7.5 million or 2.5 percent of their sports wagering revenue. That money would fund law enforcement investigations into the integrity of sports games in which wagers were placed.

A draft version of the bill would have sent some of that “integrity fee” revenue to the major sports leagues, but that language is not included in the version of the bill at the Office of Legislative Services. Five of the biggest sports leagues in the country, including the NFL and the NCAA, filed legal challenges to strike down New Jersey’s law, claiming it would ruin the integrity of their games.

“They have been hypocrites throughout the public discussion,” Burzichelli said. “To reward them at the expense of New Jersey taxpayers is not something that makes any sense.”

Major League Baseball and the National Basketball Association lobbied the governor’s office and legislative leaders about the prospect of legalized sports betting, according to quarterly lobbying reports released this month by the Election Law Enforcement Commission (ELEC). Those leagues were seeking a cut of New Jersey’s sports betting revenue, according to NJ Advance Media.

The bill’s other sponsors are Assemblyman Eric Houghtaling and Assemblywoman Joann Downey (both D-Monmouth). There is currently no sponsor in the Senate.

Burzichelli said that passing a new sports betting law would not be a heavy lift in the legislature, since voters and lawmakers have already shown they want to legalize the wagers. New Jersey voters approved a constitutional amendment legalizing sports gambling in 2011, and former Gov. Chris Christie signed laws in 2012 and 2014 to implement that amendment.

“If the Supreme Court rules in our favor, the legislative process will engage immediately, and we will have all the pieces in place as quickly as possible,” he said.

The state of New Jersey has racked up more than $8.6 million in legal bills fighting to legalize sports gambling, according to invoices obtained by Observer through a public records request.

In December, the U.S. Supreme Court indicated that it may side with New Jersey and allow the state to legalize sports betting. A majority of justices hinted they saw merit in New Jersey’s argument that a 1992 federal law banning sports betting in most states was unconstitutional because it interfered with the state’s ability to pass laws.

Before the high court took up the case, the state lost several legal battles to legalize sports wagering.

Most recently, in August 2016, the Third Circuit ruled that New Jersey’s law repealing a ban on sports gambling violated the 1992 federal law, called the Professional and Amateur Sports Protection Act.

NJ Bill Would Regulate Sports Betting If US Supreme Court Sides With State