National News

Legislature Approves Sports Betting in New Jersey

Posted June 7, 2018 5:30 p.m. EDT

TRENTON, N.J. — The New Jersey Legislature voted on Thursday to legalize sports betting, paving the way for casinos and racetracks to take wagers on events and providing the state with a new source of revenue.

It is likely a matter of days now before cash can start changing hands at casinos in Atlantic City and at Monmouth Park Racetrack near the Jersey Shore, perhaps in time to take advantage of the global interest in the World Cup, which begins next week, or the NBA Finals.

The last remaining hurdle is the signature of Gov. Philip D. Murphy, a Democrat, who supports sports betting but has not said publicly when he would sign the bill into law.

The bill’s passage represents a capstone to the more than six-year effort to bring sports betting to New Jersey and helps spur interest in and provide a financial boost to the struggling casino and horse racing industries. Last month, the U.S. Supreme Court struck down a 1992 federal law that had prohibited commercial sports betting in most states.

Although Delaware beat New Jersey in opening the betting window, allowing gambling to begin Tuesday, New Jersey is the first state to officially make wagering legal in a state where it had been completely prohibited since the Supreme Court’s decision. Delaware had been grandfathered in for select betting options.

As states around the country rush to legalize sports betting, which some estimate was worth $150 billion a year on the black market, New Jersey’s regulations could serve as a template for dealing with some challenges that come with introducing the practice.

In an effort to provide more revenue to brick-and-mortar gambling halls, the law imposes an 8.5 percent tax on in-person wagers but a 13 percent tax on bets made online or on mobile devices. In-person bets also carry a 1.25 percent fee to help communities where venues are based.

The disparity is similar to laws already regulating online casino gaming in the state. It helps offset the larger expense for running venues.

Online wagering will not begin until 30 days after the law is signed.

Some legal experts said starting online wagering quickly is essential. Cutting into the black market, where gamblers can place bets from the comfort of their couches, will require making legal betting as effortless as possible.

“You’re providing less of an incentive to customers to enter or migrate over from a black market to legal and regulated channels,” said Daniel L. Wallach, a lawyer from Florida who has followed New Jersey’s sports betting efforts. “Convenience will always trump driving 20 or 30 miles.”

The amount of money that the state can expect to reap from sports betting is unclear. Some lawmakers have estimated that wagering could yield as much as $100 million during the first year, but the state treasurer, Elizabeth Muoio, has put it much lower, at $13 million.

What the state’s law does make clear is that no money will go to any professional sports league. In a contentious hearing on Monday, Major League Baseball, the NBA and the Professional Golfers Association lobbied for an “integrity tax” to help pay for increased security to protect against cheating and to enhance statistical operations for real-time data used for in-game betting.

Lawmakers were not moved.

“You guys are in it to make money,” said Assemblyman Ralph Caputo, a Democrat from northern New Jersey and chairman of the Tourism, Gaming and the Arts Committee. “This is hypocrisy. Nine years of fighting the state of New Jersey, and you come here? It’s disgraceful. Just a suggestion: You may want to write a check to the state of New Jersey for $9 million.” That was a reference to the state’s cost to fight the leagues in court.

The bill sets the legal betting age at 21, even though the age to bet on horse races in New Jersey is 18. It allows betting on all professional sports, but it bans betting on collegiate athletics that take place in New Jersey or on college teams from New Jersey, like Seton Hall or Rutgers. The bill also bans betting on high school games and on the increasingly popular electronic sports leagues. Attention now shifts to Murphy, who is expected to return to New Jersey later Thursday from an overseas trip.

Dennis A. Drazin, the operator of Monmouth Park Racetrack, is eager to get his license so he can start taking bets on Friday for the next game in the NBA Finals and the first game of the Subway Series between the New York Yankees and the New York Mets. The Borgata casino in Atlantic City is also poised to take bets as soon as Murphy signs the bill. However, the Golden Nugget casino is excluded from taking bets on the NBA because its owner, Tilman Fertitta, is an owner of basketball’s Houston Rockets.

Jeffrey Gural, the chief executive of the Meadowlands Racetrack, said he expects to announce a partner for his sports betting operation in the coming days. As the closest venue to New York, and with the New York Jets and New York Giants playing in a stadium next door, Gural said the bill was a long time coming.

“I think five years from now, people will look back on this and wonder why it took so long for the sports teams to recognize what they already recognized in Europe, that this was part of the culture of America and watching sports,” he said. “I mean, why else is someone watching ‘Thursday Night Football’ if it’s between Jacksonville and the Browns?”