New Jersey Wins Sports Gambling Legal Case (No, Not That One)

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New Jersey has prevailed in a long-running sports gambling court case. But the recent courtroom victory is not in the headline-grabbing litigation that Governor Chris Christie has been fighting against the NCAA, NFL, NBA, MLB, and NHL since 2012.

In an August 26, 2016 decision obtained by Legal Sports Report, three New Jersey appellate judges ruled for the state in a dispute about the legality of football survival pools. Formally titled State of New Jersey v. Amboy National Bank, the decision may represent the end of one man’s decades-long administration of several high-stakes survivor pools.

The court upheld the seizure of about $846,000 from three bank accounts, rejecting the defendant’s contention that the cash merely represented “entry fees” from otherwise legal sports pools.

The new ruling does not bode well for football survivor pools in the Garden State, with certain portions of the decision having possible implications elsewhere too.

Overview of State of New Jersey v. Amboy National Bank

The case stems from a civil forfeiture action, a legal procedure where law enforcement can seize money and other assets following execution of a search warrant and arrest.

According to Judge Espinosa’s unanimous decision, defendant John Bovery ran various pools for approximately twenty years.

“There were from one hundred to several thousand participants in the pools who paid entry fees ranging from $20 to $100,” wrote Espinosa. “During the 2009 to 2010 ‘pool cycle,’ Bovery collected just over $1.7 million in pool entry fees.”

On October 20, 2010, New Jersey prosecutors moved to seize funds from three Amboy National Bank accounts connected to Bovery, “alleging that all the money was used or intended to be used in the commission of criminal activity.”

In attempting to recover the funds, Bovery put forth a number of legal arguments, including the contention that “he never accepted a bet.” In a lengthy paragraph, the New Jersey appellate judges explained their thought process in rejecting his argument:

Bovery’s own statements regarding how the pools operated establish that the pools fall within the statutory definition of gambling. Players risked money, “something of value,” on the outcome of various sports games which qualify as “future contingent events not under the actor’s control,” with the understanding that the player who makes the most correct picks will “receive something of value,” money, at the conclusion of the season or when all other participants have been eliminated from the pool. See N.J.S.A. 2C:37-1(b).

As the definition of a “contest of chance” makes clear, the fact that the skill of the athletes is a factor in the outcomes of the games or that the pool participants’ acumen in predicting outcomes may play a role in the success of their picks is of no consequence.

Implications for future sports wagering disputes

The new State of New Jersey v. Amboy National Bank court decision only directly applies to the civil forfeiture action involving the survivor pool operator.

The language in the recent decision is broad enough, however, that it could be applied to some other dispute. For example, in addition to a detailed discussion of whether survivor pools constitute illegal gambling, the court ruling included a textured look at what constitutes a bookmaker under state law.

“Bookmaking is defined as ‘advancing gambling activity by unlawfully accepting bets from members of the public upon the outcome of future contingent events,” Espinosa wrote.

The defendant argued against the bookmaker finding, positing that he “did not accept a bet because he had no financial stake in the outcome of any pools he managed.”

The court rejected this argument, finding that “[t]his argument seeks to superimpose a requirement not present in the plain language of the statute – that to be guilty of promoting gambling, one must have a personal stake in whether a specific bet wins or loses.”

Whether prize money offerings in certain types of daily fantasy sports contests may constitute a “pool” in New Jersey or other states remains an open question. No court ruling has directly addressed the issue to date.

Optics of the NJ case

As New Jersey prosecutors sought to retain monies seized in connection with a survivor pool, other state officials were simultaneously pressing a federal court to allow expanded sports betting in certain casinos and racetracks.

Indeed, the new State of New Jersey v. Amboy National Bank decision was released the same month as a federal appellate court ruled against New Jersey’s sports betting aspirations in litigation filed by the five most prominent U.S. sports leagues.

Such optics are illustrative of the current state of sports wagering in the US. Espinosa’s decision made no mention of the widely-covered federal case decided just weeks earlier. However, the judge did make a revealing observation:

“Although sports pools may be popular and even considered blameless activities by the general population, it is clear those operated by Bovery do not fall within any of these exceptions,” wrote Espinosa. “Because these sports pools are a form of gambling that is not sanctioned by the New Jersey Constitution, they are illegal.”

The observation is reminiscent of the August 9, 2016 decision by the U.S Court of Appeals for the Third Circuit, which opined on the federal sports gambling ban embodied in the Professional and Amateur Sports Protection Act of 1992 (PASPA).

“While PASPA’s provisions and its reach are controversial (and, some might say, unwise), ‘we are not asked to judge the wisdom of PASPA’ and ‘[i]t is not our place to usurp Congress’ role simply because PASPA may have become an unpopular law,” wrote Judge Rendell in her majority decision.

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