ATTORNEY AT LARGE: Tides of change poised to sweep New Jersey’s gaming scene
by Lloyd Levenson
June 1, 2012
It is conceivable that by the end of 2012 New Jersey will have added legalized sports betting and online gaming to its roster of gambling options, although there are still numerous contingencies standing in the way of both propositions.
In January the New Jersey Legislature passed and Governor Chris Christie signed legislation to authorize for the first time legalized sports betting in New Jersey, following the passage of a public referendum allowing for same in November of 2011.
The implementation of sports betting remains stalled until a ban at the federal level is removed however. When the federal “Professional and Amateur Sports Protection Act of 1992” was passed, it outlawed sports betting but left open a one-year window of opportunity for individual states to allow sports wagering. New Jersey did not take advantage of that opportunity.
A lawsuit brought by New Jersey State Senator Raymond Lesniak arguing against the 1992 ban was dismissed in the United States District Court in March of 2011, but may be revived in another action to be brought by the New Jersey Attorney General. Hope for a lifting of the federal ban also comes from two bills enjoying the bipartisan support of Republican Congressman Frank LoBiondo and Democratic Congressman Frank Palone, Jr. HR3081 would exempt New Jersey from the 1992 Act and HR3797 would reopen the “window” to allow all states to decide to permit sports wagering.
The future of internet gaming in New Jersey may also be decided this year. Both houses of the New Jersey Legislature passed bills to legalize online gaming in 2011, which were subsequently vetoed by Gov. Christie because of concerns that they violated federal law as well as the New Jersey constitution.
Gov. Christie’s concerns about federal law may have been alleviated when on December 23, 2011, the United States Department of Justice made public a memorandum opinion concerning the construction of the Federal Wire Act, 18 U.S.C. § 1084. In that opinion, the Criminal Division for the first time took the position that the Wire Act does not prohibit communications relating to non-sports wagering.
The Department of Justice’s new memorandum opinion gave additional impetus to New Jersey legislators anxious to fashion a bill which would allow Internet gaming, and which would meet with the Gov. Christie’s approval. A major item of contention remains whether the New Jersey Constitution would require that Internet gaming be approved by a public referendum at the general election in November of 2012. Amendments adopted by the Assembly Regulatory Oversight and Gaming Committee on May 10, 2012, advanced the claim that the state’s Casino Control Act can be amended to authorize Internet gaming without the need for a voter referendum. The most recent amendments to the internet gaming bill leave up in the air the possibility of Internet wagers from out-of-state, which would be dependent upon a determination that such wagering is not inconsistent with federal law.
Finally, if those who think that a referendum is necessary eventually prevail, many believe that it may already be too late to place such a referendum on the ballot in 2012 and that voter approval would have to wait until the fall of 2013. How quickly change will come to the gaming scene in New Jersey is still very much up in the air, but that change will come seems inevitable.
Lloyd Levenson is CEO and chairman of the Casino Law Department of the Atlantic City/Las Vegas law firm Cooper Levenson (www.cooperlevenson.com). He can be reached at (609) 344-3161.
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