New NJ Sports Betting Bill Appears Ahead Of Supreme Court Decision, With Integrity Fee Included

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NJ sports betting bill appears

The New Jersey sports betting law that is currently being pondered by the US Supreme Court technically creates an unregulated environment for wagering. But a new bill that surfaced today in New Jersey seeks to fix that.

The bill comes from Assemblyman Eric Houghtaling and Assemblywoman Joann Downey. Assembly Appropriations Chair John Burzichelli is also a co-sponsor. All three are Democrats.

The NJ sports betting bill at a glance

What does the bill do?

  • Puts regulation of sports betting under the NJ Division of Gaming Enforcement.
  • Allows wagering at any Atlantic City casino or racetrack in the state, or via mobile wagering.
  • The New Jersey Racing Commission would be involved in approving the operation of a sportsbook at a track or “any agreement between a casino and a racetrack to jointly operate a sports pool.”
  • Bans wagering on college events that take place in New Jersey, or on college events involving a New Jersey-based school.
  • Gross revenue from sports wagering at casinos and tracks will be subject to an eight percent tax.
  • Online sports betting revenue is taxed at a rate of 12.5 percent.

You can read the bill here.

A sports betting integrity fee?

Interestingly, the sponsors included a sports betting integrity fee, some of which can be payable to sports leagues. The pro sports leagues — the NFL, NBA, NHL and Major League Baseball — and the NCAA, of course, have been preventing New Jersey from offering wagering via the Supreme Court sports betting case.

From the bill, about the “Sports Wagering Integrity Fund”:

There is hereby imposed on all casinos and racetracks in which a sports pool is operated an annual integrity fee equal to the lesser of $7.5 million or 2.5% of that portion of gross gaming revenue attributable to wagers on sports events…

The bill has a mechanism for leagues to receive money from this fund:

…a sports governing body whose sports events are wagered upon in New Jersey casinos or racetracks may seek reimbursement for expenses incurred relative to ensuring the integrity of its sports events with respect to sports wagering operations in New Jersey by submitting a claim for such compensation to the Attorney General. Such claims shall be paid exclusively from available funds in the Sports Wagering Integrity Fund …

They would not automatically get this money, as the state’s own offices on integrity would get first crack at the fund. According to the bill, regulators “shall be authorized to cooperate with investigations by sports governing bodies or law enforcement agencies, including providing or facilitating the provision of account level betting information and audio or video files relating to persons placing wagers.”

The NBA and MLB have been lobbying lawmakers in the state. Interestingly, it appears that NJ lawmakers originally came up with the integrity fee idea. The leagues have taken that idea and run with it in NJ and other states contemplating legal sports wagering.

Also in the sports betting bill

There’s a lot more in the details of the bill.

Need to have a physical sportsbook

You can’t have only an online or mobile sportsbook; licensees must have a physical presence, as well:

No casino or racetrack permitholder shall be permitted to operate or accept wagers via an online sports pool unless a sports wagering lounge is established and has commenced operation in its facility; provided, however, that a sports wagering permitholder may petition the division to commence operation of an online sports pool during the pendency of construction of a sports wagering lounge in its facility. The division shall by regulation establish a maximum period during which an online sports pool may operate prior to the commencement of operation of a sports wagering lounge at the sports wagering permitholder’s facility.

There is a similar passage relating to horse racing tracks offering sports wagering.

Other language also makes it sounds like the online component of a sportsbook must carry the name of the casino licensee (think Golden Nugget, Borgata etc.)

Fees for sports betting

Beyond taxation rates listed above, licensees have to pay for the ability to offer sports wagering in the form of several fees:

The division shall, by regulation, establish annual fees for the issuance or renewal of sports wagering permits. The issuance fee shall be based upon the cost of investigation and consideration of the license application and shall be not less than $500,000. The renewal fee shall be based upon the cost of maintaining enforcement, control and regulation of sports pool wagering operations and shall be not less than $250,000. …

A nonrefundable deposit of at least $100,000 shall be required to be posted with each application for a sports pool permit and shall be applied to the initial permit fee if the application is approved.

In addition to the permit issuance and renewal fees, a sports wagering permitholder shall pay annually to the division $500,000 to be deposited into the State General Fund for appropriation by the Legislature to the Department of Human Services, $250,000 of which shall be allocated to the Council on Compulsive Gambling of New Jersey and $250,000 of which shall be used for compulsive gambling treatment programs in the State.

Talking NJ sports betting

“Considering the popularity of professional and collegiate sports, as well as the myriad of other gambling opportunities offered throughout the state, allowing sports betting in our Atlantic City casinos and racetracks is a natural next step for New Jersey,” said Houghtaling.

“If the Supreme Court rules in favor of allowing sports betting, we will be prepared here in New Jersey where our casinos and racetracks play an integral role in our economy. Here in Monmouth County, the Monmouth Racetrack and Freehold Raceway would see a resurgence of attendance as a direct result of this bill, benefitting our local economy and producing more jobs,” said Downey.