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Chris Sieroty

U.S. Supreme Court is last option in New Jersey sports betting case

19 November 2013

After another legal setback, New Jersey Gov. Chris Christie has one option left in his ongoing battle to legalize sports betting at casinos and racetracks in his state — the U.S. Supreme Court.

But at least one Las Vegas-based gaming analyst is unsure the Supreme Court will even consider the case.

The U.S. 3rd Circuit Court of Appeals in Philadelphia denied a request for rehearing of the state’s case. None of the 10 judges that considered the request voted in favor of it.

The ruling delivered late Friday gives the Republican governor 90 days to appeal the case to the Supreme Court.

“It is unclear if the court will take the case,” Bill Lerner, an analyst with Union Gaming Research, said Monday. “Sports betting in Nevada accounts for only 1 percent or 2 percent of total gaming revenue. That said, it is a key driver of visitation particularly around marquee events.”

Lerner said New Jersey has the potential to be three or four times bigger than Las Vegas, “given the rabid Northeast sports fans and the illegal sports betting market that is likely currently prevalent.”

Casino visitors in Nevada wagered more then $3.4 billion on sporting events in 2012, with gross gaming revenues totaling just more than $170 million, or 4.9 percent of the amount wagered. At the high end of Lerner’s expectations, sports betting would generate $680 million annually in gross revenues in New Jersey.

Messages left with Christie’s staff seeking comment were not returned Monday.

The case stems from a lawsuit filed last year by the NCAA, Major League Baseball, the National Football League, National Basketball Association and the National Hockey League. The leagues successfully argued that the U.S. Professional and Amateur Sports Protection Act of 1992 prohibits states from legalizing or regulating sports betting.

The leagues argued that New Jersey’s attempt to legalize sports betting would risk damaging the integrity of their individual sports leagues.

New Jersey had argued that the federal law violated state’s rights on a variety of constitutional grounds, including state sovereignty and equal protection.

When the federal law was enacted in 1992, New Jersey failed to exercise an option within one year to permit legalized sports betting in the Garden State. Nevada is the only state in which full race and sports books operate, while sports wagering is also legal in Delaware, Montana and Oregon.

“The case has broad implications for if New Jersey were allowed sports betting other states would also likely look to follow,” Lerner said. “Along with the U.S. Supreme Court taking the case, the only other avenue to allow state sports betting would be for Congress to overturn the federal ban on sports betting outside of four states.”

New Jersey lost its first round early this year in U.S. District Court in Trenton when sided with the leagues and the U.S. Department of Justice. In September, the state lost another round when a three-judge panel in Philadelphia ruled 2-to-1 to up hold the earlier ruling.