TRENTON — Continuing a more than four-year battle, the Christie administration today again attempted to clear the way for legalized sports betting at the state’s casinos and horse-racing tracks by telling them they will not be held civilly or criminally liable by state law enforcement agencies.
Seizing on a loophole in a federal ban on sports betting, acting state Attorney General John Hoffman issued a directive to law enforcement telling them that casinos and racetracks continued to be exempt from prosecution under the 2012 law authorizing such wagering.
The move was intended to reassure those facilities that they can offer wagering without fear of state reprisal, so long as no betting occurs on college sports or college athletic events in New Jersey, or on any of the state’s college teams, regardless of where they play.
But it remains to be seen whether any facilities open up their books to wagering before it’s clear the move does not violate a federal ban on sports betting, and before they know whether federal authorities will intervene in the absence of state enforcement.
“I don’t think any [casinos] are going to be taking any sports bets unless they got some ruling from a federal court that says this is OK – and they won’t,” said I. Nelson Rose, a law professor and expert in gaming law at Whittier Law School in California. “What Christie is telling the casinos to do is to violate federal law, and it’s a criminal law and the normal remedies for criminal law is to be arrested.”
Lloyd Levenson, an Atlantic City attorney whose firm represents casinos, said casinos and racetracks will likely wait until a judge rules on whether to lift the injection to put wagering in place, but he expects the judge to rule in Christie’s favor.
He predicts sports wagering will be available by February at the latest.
“Assuming the court rules in our favor, it could be up and running by the Super Bowl,” Levenson said. “Easily.”
The legal maneuver would allow betting without specific, state-sanctioned regulations, licensing or authorization, which are banned under the federal Professional and Amateur Sports Protection Act and a federal court injunction issued against the state.
“You don’t have to be concerned about people getting licenses and the like,” Levenson said. “That’s one of the beauties of this. This time is not government time, which often takes a while. It’s merely free enterprise time. How quickly can casinos team up with partners they need to team up with?”
Along with the directive, the Attorney General’s Office also filed a motion with U.S. District Judge Michael Shipp to make clear that the state’s action is in line with his injunction, issued last year, as well as a subsequent federal appellate court ruling.
“The only thing the attorney general is asking him to do is clarify that they meant what they said when they said nothing prohibits the state from repealing its laws against sports betting,” state Sen. Raymond Lesniak (D-Union), who has pushed for sports betting for years, said.
Both actions came as Gov. Chris Christie held a closed-door summit in struggling Atlantic City, which stands to benefit the most should sports betting begin this year.
The Attorney General’s Office referred questions about the directive and court filing to the governor’s office, which did not return requests for comment. Christie said after the meeting in Atlantic City that he did not know the specifics of the directive because he didn’t sign it, and referred comment back to the Attorney General’s Office.
Christie last month vetoed a bill that would have repealed old state laws barring sports betting in New Jersey and allowed private companies to open up wagering operations that would not require state regulation. He said in the veto that “ignoring federal law, rather than working to reform federal standards, is counter to our democratic traditions and inconsistent with the Constitutional values I have sworn to defend and protect.”
But he also hinted in the veto message at ways other than the bill to legalize the betting that, in his opinion, would comply with federal law.
Assembly Speaker Vincent Prieto (D-Hudson) praised the administration’s action, saying in a statement, “We cannot sit idle while thousands of residents lose their jobs and a key revenue source – especially for our senior and disabled residents – fades.”
“That’s why the Assembly supported this move in June, and that’s why I welcome it now,” Prieto said.
State Sen. Jennifer Beck (R-Monmouth) called the directive a “bold move” that “will have a long-term, positive impact upon our state.”
Sports betting was approved by voters in 2011 and then allowed by law under the Sports Wagering Act, which was passed by the Legislature and signed by Gov. Chris Christie in 2012. But several professional sports organizations sued in federal court to block the law.
Those organizations — the National Collegiate Athletic Association, Major League Baseball, National Football League, National Basketball Association and National Hockey League — did not immediately return requests for comment on the state’s action.
In February last year, a federal judge permanently banned the state from “sponsoring, operating, advertising, promoting, licensing, or authorizing,” any type of sports wagering, finding it violated the Professional and Amateur Sports Protection Act.
Seven months later, in September, the U.S. Court of Appeals for the Third Circuit upheld the decision and found the federal ban on sports betting constitutional, but said that nothing prevented the state from repealing its own prohibitions on sports betting.
The state’s fight in the courts, which has cost taxpayers more than $3 million, hit yet another roadblock in June, when the U.S. Supreme Court refused to hear the Christie administration’s appeal of the two lower court rulings.
In the motion filed today with district court, Hoffman asked that the permanent ban be amended to reflect the appellate court finding and clarify that the state has the authority to carry out its decision not to prosecute sports betting at casinos and racetracks.
The state argued in court documents that it is not creating regulations or licensing sports betting, as was clearly banned by the court, but instead simply telling casinos and racetracks that they will not be held liable by authorities for offering sports wagering.
Though the directive to law enforcement not to prosecute is effective today, Lesniak said facilities would wait until the district court rules on the state’s motion before offering betting. The motion is scheduled to be decided on the papers Oct. 6.
He also said he was not concerned by the state’s inability to directly regulate sports betting, saying that the state already has the power to license and regulate the overall casino and racetrack operations, as well as to enforce consumer protection.
“It’s not like we’ll be overseeing sports betting specifically, but we do have licenses that allow them to operate in all areas,” Lesniak said.
The directive does not address the risk of prosecution by federal authorities. The U.S. Attorney’s Office in New Jersey, which defended the federal ban on sports betting on behalf of the Justice Department in federal court, declined comment.
NJ Advance Media reporters Matt Arco, Brent Johnson and Claude Brodesser-Akner contributed to this report.
Christopher Baxter may be reached at cbaxter@njadvancemedia.com. Follow him on Twitter @cbaxter1 or on Facebook.