American Sports Leagues Seek Injuction to Stop New Jersey Sports Betting

Four major American professional sports leagues joined with the NCAA to file a lawsuit against the state of New Jersey on Tuesday. The NFL, NBA, MLB, NHL, and NCAA jointly filed a challenge to New Jersey Governor Chris Christie’s latest attempt to legalize sports gambling in his state.

2012 Sports Betting Lawsuit

The lawsuit is quiet similar to the one filed by the same sports organizations in 2012. That lawsuit was in answer to a non-binding New Jersey referendum on sports betting in 2011 and a subsequent sports betting law passed by the New Jersey legislature, which was signed into law in August 2012 by Chris Christie.

When the suit shut down sports betting in the state, New Jersey Governor Chris Christie appealed the case through several levels of federal appellate court. The appeals ultimately led to the U.S. Supreme Court, which declined to hear the case in June 2014. Christie subsequently vetoed a second effort by the legislature to legalize sports wagers, saying New Jersey should not directly oppose the 1992 PASPA law which bans sports betting in all but four U.S. states. At the time, Christie’s veto appeared to put the matter to rest.

Governor Christie’s Directive

Three weeks ago, issued a directive to the legal gambling operations of the state that they would be allowed to operate sportsbooks at their complexes. State regulators would not attempt to prosecute such matters, nor regulate such activity. This was in response to a legal opinion rendered by U.S. District Judge Michael Shipp during the previous court cases. In Shipp’s opinion, it was illegal for a state to write laws to contradict PASPA, but the same state could look the other way if sports betting took place. It appeared as if a legal loophole might exist to get around PASPA.

Shortly after Christie’s directive, he asked the Atlantic City casinos and New Jersey’s racetracks to honor a 45-day moratorium on sports betting. During that 45-day period when the gaming operations would not accept sports bets, a hearing would take place in which Judge Shipp would clarify his opinion. Meanwhile, the betting operations could train new employees to accept the wagers, in anticipation of the state of open sports wagering. In some cases, betting venues are known to have begun preparations to open sportsbooks. Monmouth Park is said to have been preparing since last year, and is prepared to hire 110 new employees for their operation, which they hope to open in late-October.

Astounding, Specious, and Blatant

In the Tuesday court filing, the leagues offered a statement which read: “(The) defendants’ latest arguments are nothing more than a blatant attempt to circumvent this Court’s injunction and the federal law that it prohibits defendants from violating.” The language in the remainder of the filing called Christie’s latest direct as “astounding”, “specious”, and a “blatant violation” of federal law.

Michael Shipp is expected to offer a new opinion next week. Though Shipp’s injunction is what ultimately barred New Jersey from opening bookmaker operations from 2012 to the present, it is thought that the judge might take a different stance this time around. Chris Christie and his lawyers clearly think New Jersey is on firmer legal footing this time around, and expect a successful challenge of the PASPA law.

Revenue Sharing Plan by Whelan and Mazzeo

New Jersey lawmakers are hedging their bets, though. State Senator Jim Whelan and State Assemblyman Vincent Mazzeo last week offered the sports leagues a 0.25% fee if they would participate with New Jersey in its new gaming venture. The olive branch would head off a long legal battle by offering the league’s compensation, but because New Jersay cannot regulate the sportsbooks, it would require the casinos and racetracks to operate on the honor system. The NFL, Major League Baseball, NBA, NHL, and NCAA would have to trust the operations at their word on how much money was being made.

Adam Silver, commissioner of the NBA, had signaled in early September that he might be willing to change his league’s stance on sports gambling. Saying widespread and legal sports betting was inevitable in the United States, Silver suggested the NBA should get out ahead of the issue and find a way to embrace gambling (make money at it). Now, it seems, the NBA is willing to join with the other leagues to sue New Jersey to assure that doesn’t happen. Thus, while both sides have shown hints they might be willing to make a deal, it appears as if both sides will also take their confrontation to court–for now.

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