Congressman to offer bill on N.J. sports betting

After state residents backed it in Tuesday's vote, a quick way around a federal law is sought.

Posted: November 10, 2011

ATLANTIC CITY - Hoping to avert a costly legal battle over whether New Jerseyans should be able to bet on sports, U.S. Rep. Frank Pallone Jr. said he would introduce a bill Monday giving the state an exemption from a federal ban on sports betting.

Pallone, a Democrat in the GOP-led House, said his bill would take effect immediately upon passage.

How likely it is to get through Congress remains to be seen. It would represent the most direct path to approving sports betting in New Jersey. No other states would be included in his measure.

"New Jersey voted for, and deserves a bite of, the apple in terms of sports betting," Pallone said. "Any delay in making this possible is a loss of profits for local businesses, which is unacceptable."

Unlike a measure expected to be introduced in the state legislature on Thursday, Pallone's bill would not allow wagering on college games.

New Jersey voters approved a nonbinding referendum Tuesday indicating they want sports betting legalized in their state. But before that can happen, the state must pass a law authorizing it, and a federal prohibition on sports betting in all but four states must be overturned or circumvented.

State Sen. Raymond Lesniak (D., Union) is to introduce a bill Thursday authorizing the state Casino Control Commission to issue sports-betting licenses. He said the state attorney general should sue to overturn the federal ban.

A spokesman for the Attorney General's Office declined to comment.

While lawmakers were encouraged that voters passed the ballot question, legislators from districts near the Meadowlands Racetrack said slot machines also are needed at racetracks even with the additional boost that sports betting would provide.

Assemblyman Ralph Caputo (D., Essex), who has long called for slots at the Meadowlands, said sports betting was a good start, but "we need the total package," citing "increased competition from other states."

"We can't go halfway here," he said.

Ruben J. Ramos Jr. (D., Hudson) also said New Jersey's racetracks are hamstrung by not having slots.

"Our racetracks are fighting an unfair fight against the competition," he said. "Sports betting is a billion-dollar industry, and only four states are allowed by federal law to benefit from legal sports wagering. This is a first step toward adding New Jersey to that list, generating tax dollars, creating jobs, and breathing new life into our racetracks."

Lesniak's bill would start laying the legal groundwork for sports betting and would set the tax rate on casino and racetrack profits at 8 percent, the same rate the casinos pay on their gambling revenue.

Winning bets are considered taxable income, and patrons would be responsible for declaring them, Lesniak said. The casinos would report winnings of $10,000 or more to the IRS.

Lesniak said both houses of the legislature planned to fast-track his bill in hope of getting it to Gov. Christie's desk before the current session ends in early January.

Joe Brennan Jr., president of the Interactive Media Entertainment and Gaming Association, said sports betting is inevitable in New Jersey and the other 45 states where it is banned by the federal Professional and Amateur Sports Protection Act (PASPA).

New Jersey missed a 1991 deadline to legalize sports betting, and it was left out of a 1992 law that allowed it in Nevada, Delaware, Oregon, and Montana. Nevada is the only state taking legal bets on individual games.

"This is no longer an academic argument," Brennan said. "Federal law now directly conflicts with the constitutional will of the people of New Jersey."

He said he believes the federal law will be overturned.

"Of course, we could avoid all of this - the court battles, the expenditure, the silliness, really - if the Department of Justice would simply acknowledge what it did when PASPA was first enacted almost 20 years ago, that the law is unconstitutional," Brennan said.

"We could avoid all of this if the NFL and other opponents simply recognized the obvious: Sports betting is here, always has been, always will be, no matter how much finger-wagging the owners may do at everyday fans who, with their wager, choose to back their favorite teams with more than just the exorbitant cost of a ticket, licensed team gear, or team-logo lottery tickets."

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