A new effort to legalize New Jersey sports betting cropped up in the state recently.
That effort would likely be better served being run as a bluff, I believe, not as a final matter of policy. But the ship may have sailed already for that to happen.
Catching up on the NJ sports betting machinations
The state has already passed two other laws this decade in an attempt to allow single-sport wagering within its borders. To date, both of those efforts have been shut down in the courts.
This time around, a new piece of legislation — at least as drafted — would entirely repeal the sports betting prohibition in the state. Legal experts generally agree that such a full prohibition would be an effective “end around” on PASPA, the federal law that bans regulated sports betting in all but four states.
But it would also allow anyone to offer sports wagering — bringing about the scenario of the possibility of a sportsbook on any street corner. Sports wagering would not be limited just to racetracks and casinos in Atlantic City, as the state has attempted to do previously. The state’s main aim with sports betting is to help prop up its ailing casino industry, much like it did by legalizing NJ online gambling and poker.
However, the idea of a full repeal was almost immediately undercut by one of its authors, Assemblymember Ralph Caputo. It appears the final bill will not be a total repeal — or the so-called “nuclear option” — that would almost certainly pass legal muster.
“There have got to be things added to this,” Caputo said. “A lot brighter people than me have worked on this and they haven’t found the ultimate answer yet.”
A law that amounts to another partial repeal will almost certainly end up in court — again being challenged by the major US professional sports leagues, the NCAA and the Department of Justice. So far, they have prevailed in shutting down NJ sports betting in the courts.
What New Jersey could be doing
I’ve pointed out the problems with the nuclear option in the past, the biggest issue being that the political will is not likely to manifest itself to allow totally unregulated sports betting in New Jersey.
The options for the newest legislation are all pretty suboptimal for the state:
- Bring up the total repeal and it gets shot down by lawmakers who don’t have the stomach for it.
- Amend the draft legislation so that it ends up in court once again, with a likely losing battle in front of the state for a third time.
- Actually passing a bill and having the untenable scenario of unregulated sports betting authorized.
While some believe that option No. 2 has some merit, we should remember this:
For those thinking the third time’s a charm for NJ, remember—most on the 3rd Circuit move the goalposts on PASPA and NJ law as needed
— Will Green (@wfcgreen) November 1, 2016
Instead of doing that, as Caputo has implied will be done, I think it would be far more effective for New Jersey to play a game of brinksmanship with the leagues (i.e. “You don’t think we’ll allow unregulated sports betting? Look at this.”) How it works:
- Try to get lawmakers, or a sizable majority, on the same page and pass the full repeal, with the understanding that no one in the state really wants unregulated sports betting.
- The governor signs the bill into law, which would take effect roughly three months later. (Per the bill: “This act shall take effect on the 90th day next following the date of enactment.”)
- Advancing the bill — or possibly passing it — would at least make the sports leagues somewhat nervous. Entirely unregulated sports betting taking place in the US is likely worse in their minds than the current environment. That perhaps gives the state a chance to negotiate with the leagues on some of tenable path forward for sports betting in the state.
- The new law could theoretically be pulled back before it ever takes effect or slightly thereafter.
I still find this possibility to be an outlier in probability, as I doubt that a wide swath of lawmakers will ever get to the point that they would want to be on the record voting for the full repeal. And the leagues could probably see through such a bluff. But if enough officials in New Jersey are serious about pushing for legal sports betting, this would get everyone’s attention, at least.
Unfortunately, Caputo has already diluted the efficacy of an attempted bluff, as well. But saying the full repeal isn’t likely to move forward as-is, such a scenario would almost be the equivalent of running a bluff with New Jersey’s cards face up. At least in the past people were saying the right things, like Monmouth Park advocating for the full repeal.
Short of running a bluff on sports betting, or doubling down…
In this space, we have suggested far more tenable paths forward for pushing back on sports betting against PASPA and the leagues that would have a better possibility of success, albeit on a more limited basis in some cases:
- Colleague Will Green explored the state building on allowing de minimis wagers between friends and family.
- I took a look at how daily fantasy sports regulation could be employed.
- Putting more eggs in the basket of advocacy in Congress for repealing or amending PASPA.
And today, attorney and legal blogger Steve Silver even advocated for doubling down on more states trying to skirt PASPA:
But what if New Jersey was not alone? What if 20 states simply repealed their prohibitions on sports betting to dare the Federal government to enforce PASPA? …
The leagues prevailed in New Jersey, but what would happen if the leagues had to fight multi-front battles in more than a dozen states? Would they really stretch their resources that thin to “protect the integrity of the game” while actively embracing daily fantasy sports?
That scenario isn’t likely, either, but it would be very effective.
In the end, the full legal and legislative playbook hasn’t been employed on sports betting in New Jersey and beyond. Whether anyone has the desire to run these plays remains to be seen.
