N.J.'s legal strategy in its sports-betting plan

At the sports book at the Venetian in Las Vegas, Chris Lindstrom of Sacramento, Calif., watches playoffs. The model for N.J.'s legal initiative appears to be a 2009 federal lawsuit filed by state Sen. Raymond Lesniak and other proponents.
At the sports book at the Venetian in Las Vegas, Chris Lindstrom of Sacramento, Calif., watches playoffs. The model for N.J.'s legal initiative appears to be a 2009 federal lawsuit filed by state Sen. Raymond Lesniak and other proponents. (SUZETTE PARMLEY / Staff)
Posted: August 13, 2012

Under pressure to revive Atlantic City and boost state revenue, New Jersey officials appear to be basing the launching of a planned sports-betting program on a speculative legal theory that has never been tested by the courts, legal experts say.

The state has not officially unveiled its legal strategy, but in a news conference last week, Gov. Christie suggested that the federal government had no basis under the U.S. Constitution for banning betting on major professional and collegiate sports in New Jersey while permitting a handful of other states to have it.

The model for the state's legal initiative appears to be a 2009 federal lawsuit filed by State Sen. Raymond Lesniak (D., Union) and various gambling interests against U.S. Attorney General Eric Holder, citing constitutional arguments for overturning the federal ban on sports betting in New Jersey and most other states. The lawsuit was dismissed a short time later on procedural grounds.

The legal battle was again joined Tuesday when the NCAA and the four major professional sports leagues filed suit against Christie and other New Jersey officials, alleging that the state's announced plan for sports betting violated the Professional and Amateur Sports Protection Act, a 1992 law that effectively limited sports betting to Nevada and, in a more restricted way, Montana, Delaware, and Oregon. Under the law, New Jersey had a narrow window in 1993 to enact a sports-betting plan to avoid the ban, but it failed to do so.

"The only thing that is left is some form of constitutional challenge," said Roberto Rivera-Soto, a former New Jersey Supreme Court justice and a senior commercial litigator at the Center City firm of Ballard Spahr L.L.P. "A statute that has been in place for 20 years has become part of the recognized landscape.

"These sorts of things tend to [weigh] against finding that a statute is unconstitutional. But what do they have to lose? If the worst result is they are going to have the status quo, then why not?"

F. Warren Jacoby, a commercial litigator and vice chairman of the firm Cozen O'Connor, said New Jersey's hand could be strengthened by the idea that illegal wagering on sports contests was already widespread and that federal regulation has had only limited impact.

"Everyone is saying that, as a practical matter, sports betting is rampant," Jacoby said. "If the rational basis for regulation is, 'We don't want this vice to spread,' well, clearly in 2012, that objective, while worthy, has not been achieved."

I. Nelson Rose, a professor at Whittier Law School in Southern California and a recognized authority on gambling law in the United States and abroad, expressed astonishment that Christie set the plan in motion before seeking a declaratory judgment by the federal courts that it was legal to do so.

"I thought it was bizarre, really, for Chris Christie to say, 'OK, come and get me, coppers,' to violate a major federal antigambling statute," Rose said. "It certainly is bad lawyering."

Christie's press office did not respond Friday to a request for comment.

Sports betting in New Jersey, were it to get under way, could generate an additional $225 million a year for Atlantic City casinos and racetracks, proponents contend.

The sports leagues argued in their lawsuit that sports betting would undermine the integrity of college and professional sports and that the New Jersey initiative did not meet the narrowly tailored exemptions set forth in the Professional and Amateur Sports Protection Act.

Despite a flourishing sports-betting industry centered in Nevada that totals, according to some estimates, $350 billion a year, the sports leagues and the NCAA said that sports betting in New Jersey would threaten "the integrity of those sports and is fundamentally at odds with the principle . . . that the outcomes of collegiate and professional athletic contests must be determined, and must be perceived by the public as being determined, solely on the basis of honest athletic competition."

The same day the leagues filed suit, Christie held a news conference in which he seemed to flag the state's legal theory for defending against legal challenges, arguing that the federal government didn't have the right to stop New Jersey if it permitted sports betting in other states.

"I think we are going to win," he said, "because I don't believe the federal government has the right to decide that only certain states can have sports gambling."

Jacoby said he believes the governor's remarks signaled that the state would seek to defend the plan under the 14th Amendment, affording citizens equal protection under laws.

He said he also anticipated a federalism argument contending that the federal government did not have the authority to regulate gambling under the enumerated powers granted it by the Constitution and that such powers belong to the states.

"The way these things are done," Jacoby said, "you tend to throw the kitchen sink."

The lawsuit by Lesniak and others in 2009 laid out these and other constitutional arguments in an effort to get a finding that the federal sports-betting law was unconstitutional. But the lawsuit was dismissed on the basis that the action was premature because the state had no sports-betting program at the time. Now, it plans one.


Contact Chris Mondics

at 215-854-5957 or cmondics@phillynews.com.

comments powered by Disqus
|
|
|
|
|