New Jersey files lawsuit against federal sports betting ban

March 25, 2009

A New Jersey state senator has filed a lawsuit seeking to overturn a federal law banning sports betting in 46 states.

State Sen. Raymond Lesniak, a Democrat representing portions of Union County, filed the suit Monday, arguing the 17-year-old law is unconstitutional because it treats four states differently than the other states.

Under the law, sports betting is prohibited in all states except Delaware, Oregon, Montana and Nevada, although only the latter two currently allow wagering.

"This federal law deprives the State of New Jersey of over $100 million of yearly revenues, as well as depriving our casinos, racetracks and Internet operators of over $500 million in gross income," Lesniak said in a statement to the press.

The 39-page lawsuit is believed to be the first challenge to the Professional and Amateur Sports Protection Act of 1992. New Jersey missed a 1994 deadline that would have allowed it to join the other states when the law was implemented.

Atlantic City officials and their political allies have argued allowing sports betting would give all the states a new source of revenue needed in the face of a staggering recession.

New Jersey Governor Jon Corzine was not involved with the lawsuit, but he said legalizing sports betting would help Atlantic City and said it was "worth pursuing".

Legalizing sports betting in New Jersey could bring the state more than $50 million in annual tax revenue, according to officials from the Interactive Media Entertainment & Gaming Inc., a Washington, D.C.-based consultant for the electronic gaming industry, which joined Lesniak as a plaintiff in the lawsuit.

“This is about more than revenue,” said Joe Brennan Jr., chairman of Interactive Media Entertainment. “It’s about jobs and economic activity.” According to 1999 study, $380 billion in illegal sports betting occurs in the state each year.

New Jersey, in particular, is facing a difficult budget season, and the Atlantic City casinos are in what the Associated Press called a "financial meltdown". Eleven of the city's casinos suffered their biggest revenue decline in 30 years last month.

Delaware is reported to be considering regulating sports betting, which New Jersey backers of the lawsuit said adds a sense of urgency to the issue.

"We cannot afford to be naive about illegal sports betting," New Jersey State Sen. Jeff Van Drew said in a statement to the press. "It's happening right now, and is funding other criminal enterprises which are far more dangerous."

The New Jersey Thoroughbred Horsemen's Association, the Thoroughbred Breeders Association of New Jersey and the Standardbred Breeders & Owners Association of New Jersey were also listed as plaintiffs in the lawsuit.