ATLANTIC CITY — Hoping to avoid a long, costly legal battle over whether New Jerseyans should be able to bet on sports, U.S. Rep. Frank Pallone Jr. said he will introduce a bill Monday giving the state an immediate exemption from a federal ban on sports betting.
Pallone said Thursday his bill would take effect immediately upon passage. But how likely it is to get through Congress remains to be seen.
Still, it would represent the most direct path to approving sports betting in New Jersey. No other states would be included in his measure.
“New Jersey voted for, and deserves a bite of the apple in terms of sports betting,” Pallone said. “Any delay in making this possible is a loss of profits for local businesses which is unacceptable.”
Unlike a law expected to be introduced in the state legislature on Thursday, Pallone’s bill would not allow wagering on college games.
New Jersey voters approved a nonbinding referendum Tuesday indicating they want sports betting to be legalized in their state. But before that can happen, the state must pass a law authorizing it, and a federal ban on sports betting in all but four states must be overturned or somehow circumvented.
Lawmakers in northern New Jersey were encouraged that voters passed the referendum. But legislators from districts near the Meadowlands Racetrack still insist slot machines are needed at the tracks, even with the additional boost that sports betting, if implemented, would provide.
State Sen. Raymond Lesniak will introduce a bill Thursday authorizing the state Casino Control Commission to issue sports betting licenses, and says the state attorney general should sue to overturn the federal ban. A spokesman for the attorney general’s office declined comment on whether the office would actually do so.
Assemblyman Ralph Caputo, an Essex County Democrat who has long called for slots at the Meadowlands, says sports betting is a good start but “we need the total package.”
“The total package means putting slots at racetracks like the Meadowlands, especially in light of this increased competition from other states,” Caputo said. “We can’t go halfway here.”
Ruben J. Ramos, Jr., a Hudson County Democrat, also said New Jersey’s racetracks are hamstrung by not having slots.
“Our racetracks are fighting an unfair fight against the competition,” he said. “Sports betting is a billion-dollar industry, and only four states are allowed by federal law to benefit from legal sports wagering. This is a first step towards adding New Jersey to that list, generating tax dollars, creating jobs and breathing new life into our racetracks.”
Lesniak’s bill would start the process of laying the legal groundwork for betting and would set the tax rate on casino and racetrack profits at 8 percent, the same rate the casinos pay on their gambling revenue. Winning bets are considered taxable income, and patrons would be responsible for declaring them as income, Lesniak said. The casinos would report winnings of $10,000 or more to the IRS.
Lesniak said state Sen. Jim Whelan, who just won re-election on Tuesday, will consider the bill later this month, adding that both houses of the legislature plan to fast-track it in the hope of getting it to Gov. Chris Christie’s desk before the current session ends in early January.
Joe Brennan Jr., president of the Interactive Media Entertainment & Gaming Association, an online gambling association, said sports betting is inevitable in New Jersey and the other 45 states where it is currently banned by the federal Professional and Amateur Sports Protection Act. New Jersey missed a 1991 deadline to legalize sports betting, and it was left out of a 1992 law that allowed it in Nevada, Delaware, Oregon and Montana. Nevada is the only state taking legal bets on individual games.
“This is no longer an academic argument,” he said. “Federal law now directly conflicts with the constitutional will of the people of New Jersey.”
He said he believes the federal law eventually would be overturned.
“Of course, we could avoid all of this — the court battles, the expenditure, the silliness, really — if the Department of Justice would simply acknowledge what it did when PASPA was first enacted almost 20 years ago: that the law is unconstitutional,” Brennan said. “We could avoid all of this if the NFL and other opponents simply recognized the obvious: sports betting is here, always has been, always will be, no matter how much finger-wagging the owners may do at every day fans who, with their wager, choose to back their favorite teams with more than just the exorbitant cost of a ticket, licensed team gear, or team logo lottery tickets.”