U.S. Supreme Court Declines to Hear New Jersey’s Sports Gambling Challenge

The U.S. Supreme Court declined today to hear a challenge of the existing federal sports betting laws. The challenge had been brought by the state of New Jersey. Speculation had centered for months on whether the Supreme Court would hear the case, with several Democratic politicians in New Jersey criticizing Governor Chris Christie for bringing the lawsuit in the first place.

Professional and Amateur Sports Protection Act of 1992

In 2011, the voters of New Jersey approved an amendment to the state constitution which would have allowed sports gambling in the state. The vote contradicted 20-plus years of federal law (“The Professional and Amateur Sports Protection Act of 1992“), which banned sports betting in all U.S. states except four: Nevada, Oregon, Montana, and Delaware.

In the early-1990’s, those states were given the right to allow sports bets. At the time, New Jersey was given a year to amend its state constitution, but the lawmakers in that day allowed the time limit to expire. Over the past twenty years, that decision has proven to be disastrous for Atlantic City, as one of the pillars of a Vegas-style land-based casino is its ability to operate a sportsbook.

Changing Times, Decreasing Revenues

When the New Jersey legislature first declined to opt-in to the federal sports gambling regulations, Atlantic City appeared to be a healthy gaming destination. A U.S. Supreme Court ruling from that time, though, changed the landscape of the gaming industry. In 1989, the court ruled that Native American tribes could build gaming casinos on their reservations, even if the nearby state made such gaming illegal. The tribes had signed treaties with the U.S. federal government, so they were recognized as tiny sovereign nations.

The decision to make tribal gaming legal (if the tribe signed a state compact) changed the situation for all land casinos. In 1989, Nevada and New Jersey were the only U.S. states which had casinos. In 2014, the number of states has risen to 38. Competition is on New Jersey’s borders everywhere, including Pennsylvania and New Jersey. Since the early 1990’s, large gaming venues like the Mohegan Sun and Foxwoods Casino have appeared in Connecticut. Even nearby Delaware has gaming machines at its racetracks.

No Sports Betting Hurts Atlantic City

In these circumstances, the lack of sports betting is a huge detriment. Atlantic City casinos have nothing special to lure the gamblers of New York and Pennsylvania. If sports gambling was allowed, then Atlantic City would have an advantage over the tribal and private-owned casinos in the region. This is why the people of New Jersey approved the sports gambling amendment in 2011, and why Governor Chris Christie wanted to test federal laws with a court case.

In 2012, the New Jersey legislature passed a law to approve sports gambling at the Atlantic City casinos and New Jersey racetracks on pro, amateur, and some college events. Proponents said the law would bring more revenues for the state and its struggling land casinos. It would also counter the illegal sports betting rings which operate throughout the state, often taking in tens, even hundreds, of millions of dollars.

2012 Court Case

The new law was challenged almost immediately. The NCAA, NBA, NFL, NHL, and Major League Baseball sued the state of New Jersey to strike down the law. These leagues and associations said the law went against the 1992 law which stopped the spread of sports betting. Gov. Chris Christie took up the challenge, and lawyers representing the state have spent the last 2 years in and out of court, hoping to overturn the 22-year old law.

Millions Lost on Legal Fees

While waiting for the Supreme Court to make a decision on whether to see the case or not, critics have lambasted Governor Christie. They said it was a long shot that the nation’s highest judicial authority would review the case. Under such circumstances, the governor was wasting millions of dollars on legal fees, trying to overturn a law which wasn’t likely to be overruled.

Now it appears the critics were right. The Professional and Amateur Sports Protection Act of 1992 continues to stand as the law of the land. New Jersey cannot host sports wagers. The poor decisions of past New Jersey politicians continue to stand. This is the latest in a series of bad luck for Atlantic City, which has lost nearly 50% of its revenue stream since 2007. One casino has closed its doors in the past year, while a second one faces bankruptcy and possible closure, if no new ownership can be found. Competition of fiercer than ever for Atlantic City.