Legal U.S. sports betting could spread if New Jersey has its way

Fri Aug 7, 2015 3:06pm EDT
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By Hilary Russ

NEW YORK (Reuters) - Legalized U.S. sports betting, resisted by professional leagues since they won a federal ban nearly a quarter century ago, could begin spreading around the country if the state of New Jersey prevails in a pending federal court case.

The state may have only one major league franchise bearing its name: the New Jersey Devils NHL hockey team. But with an eroded casino industry and sluggish state economy, New Jersey has been pushing for sports betting for several years and carrying the ball in the legal battle while other states wait and watch.

"A New Jersey win will have immediate, far-reaching implications beyond its borders," said Daniel Wallach, a Florida sports and gambling attorney who has followed the case closely. "It will prompt swift action by other states."

A decision is expected any day from the U.S. Court of Appeals for the Third Circuit. Whichever side loses will almost certainly appeal.

The NCAA, NFL, NBA and other leagues sued after New Jersey lawmakers legalized sports betting in 2012. The leagues said that violated a 1992 federal law that banned the activity in all but four states - particularly Nevada - where it was already allowed. Betting also threatens the integrity of sports games by opening the door to price fixing, the leagues argued.

New Jersey lost the case, but it tried again last year with new legislation that attempts an end-run around the federal ban - which prohibits states from authorizing, sponsoring, operating or licensing the practice - by essentially removing state control and deregulating sports wagering at casinos and racetracks.

Those venues would then be free to oversee their own sportsbooks under the latest bill, which the sports leagues also tried to block in court. They won that case as well, and New Jersey appealed.

Other states - especially Pennsylvania and Delaware, which are also in the Third Circuit - might immediately follow New Jersey's lead if it won and begin pushing for broader sports betting, Wallach said.   Continued...