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Bills advancing through the New Jersey state legislature give a mandate to casino operators who also own a big piece of sports franchises: sell your team stake or don’t offer sports betting.
A provision in New Jersey sports betting bills in both the Senate and Assembly appears to restrict team owners from offering wagers on all sports — not just their own. This could snare operators like Golden Nugget, where owner Tilman Fertitta also owns the Houston Rockets of the NBA.
The bill prohibits any casino operator who owns a stake of ten percent or greater in a sports franchise from offering sports betting, with a couple of exceptions. A waiver can be granted if the sports betting licensee owns less than 10 percent of a casino or racetrack, or that sports ownership stake represents less than one percent of that licensee’s total business value.
That last provision might help MGM Resorts, which owns the WNBA’s Las Vegas Aces. The company reported $10.8 billion in net revenue in 2017 and the value of the Aces likely falls well below one percent of MGM.
Otherwise, any operator would have one year from passage to divest their stakes in order to offer NJ sports betting.
Nevada sports betting offers no such restriction on dual casino operators and team owners, and no problems have cropped up in the Silver State over decades of sports betting.
Let’s take a closer look at the language of the Assembly bill:
Any person who is an athlete, coach, referee, direct or indirect legal or beneficial owner of 10 percent or greater, or director of a sports governing body or any of its member teams, a sports governing body or any of its member teams, a player or a referee personnel member, in or on any sports event overseen by that person’s sports governing body based on publicly available information; a person who holds a position of authority or influence sufficient to exert influence over the participants in a sporting contest, including but not limited to coaches, managers, handlers, athletic trainers, or horse trainers; a person with access to certain types of exclusive information on any sports event overseen by that person’s sports governing body based on publicly available information, or a person identified by any lists provided by the sports governing body to the division and the racing commission shall not be permitted to have any ownership interest in, control of, or otherwise be employed by an operator, a sports wagering licensee, or a facility in which a sports wagering lounge is located or place a wager on a sports event that is overseen by that person’s sports governing body based on publicly available information … Any person who violates this paragraph shall be guilty of a disorderly persons offense and shall be fined not less than $500. not more than $1,000.
The “owner” language causes the problem. In addition to MGM and Golden Nugget, Caesars Entertainment is owned by Apollo Capital Management, a private equity firm co-founded by Philadelphia 76ers and New Jersey Devils owner Joshua Harris.
MGM owns Borgata, while Golden Nugget and Caesars both operate branded properties in Atlantic City.
Fertitta already addresses the situation at the Golden Nugget in Nevada by declining to take wagers on the Rockets. Applying the proposed New Jersey rules to the situation, Golden Nugget apparently would not be able to offer any sports wagering.
New Jersey needs legislation to govern sports betting after partially repealing the state’s ban on sports wagering in 2014. That move began the state’s legal battle that resulted in the Supreme Court decision to legalize sports betting last month.
New Jersey’s Division of Gaming Enforcement will write regulations to govern sportsbooks based upon whatever new law passes. The Senate bill moving at the moment would allow land-based operations to offer sports betting immediately. Mobile and online betting would start 30 days after passage.
Amendments to the bills that would change the ownership restriction remain a distinct possibility.