U.S. Supreme Court overturns federal sports betting ban

Posted: May 14, 2018

The United States Supreme Court May 14 ruled that a federal ban on sports betting is unconstitutional, a decision that will allow states such as New Jersey to offer the form of gambling.

The court’s decision that the Professional and Amateur Sports Protection Act is unconstitutional was immediately hailed by the operators of Monmouth Park, which was at the forefront of the effort to win the right to offer sports betting. Monmouth is leased by the New Jersey Thoroughbred Horsemen’s Association and operated by Darby Development.

Sports betting at Monmouth could commence shortly in the track’s William Hill sports book and renovated areas of the grandstand.

“This is the culmination of the hard-work and dedication of a large group of individuals, all of whom contributed to today’s victory and will undoubtedly contribute to our future success,” Dennis Drazin, Chairman and Chief Executive Officer of Darby Development, said in a release. “We started this fight back in 2012 and are grateful that the Supreme Court has recognized that we’ve been right all along.

“We can now shift our focus on commencing sports betting, which will be off and running at Monmouth Park as soon as possible.”

The Supreme Court, which reversed a Third Circuit Court decision, said at the end of its lengthy opinion:

“The legalization of sports gambling is a controversial subject. Supporters argue that legalization will produce revenue for the States and critically weaken illegal sports betting operations, which are often run by organized crime. Opponents contend that legalizing sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports. The legalization of sports gambling requires an important policy choice, but the choice is not ours to make.

“Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA “regulate(s) state governments’ regulation” of their citizens, New York, 505 U. S., at 166. The Constitution gives Congress no such power. The judgment of the Third Circuit is reversed.”

Drazin credited former New Jersey Sen. Ray Lesniak and former Gov. Chris Christie for supporting the push sports betting push both through the state legislature and the courts. New Jersey’s legal battle has cost about $9 million, Drazin said earlier.

“Now that victory is in hand, I look forward to working with Gov. Phil Murphy, who has been a strong supporter of today’s ruling, on implementing sports betting,” Drazin said. “My most heartfelt congratulations to the New Jersey Thoroughbred Horsemen’s Association and all those who were willing to continue to stick their necks out in search of today’s ruling. Their hard work will soon be rewarded, as will the people of New Jersey, who have supported sports betting for more than half a decade.”

In 2011, New Jersey voters overwhelmingly approved sports betting, and the state legislature subsequently passed the Sports Wagering Act, which permitted licensing and regulation of sports gambling. The state, however, was sued based on the federal PASPA, and that triggered counter litigation.

In June 2017, the Supreme Court issued a writ of certiorari to hear the consolidated cases of Murphy, Gov. of NJ, et al. v. NCAA et al. and NJ Thoroughbred Horsemen v. NCAA et al. Oral arguments were heard in Washington, D.C., in December.

“Dennis Drazin was the driving force behind the sports betting legislation and Monmouth Park’s decision to fight in court to bring sports betting to New Jersey,” said attorney Ron Riccio, who served as lead counsel for NJTHA. “More than anyone else, Dennis had the vision and determination to invest the time, energy, and resources that led to today’s decision, which will ensure the security of the Garden State’s billion-dollar equine industry.”

Press conference reveals further details

Drazin, who spoke at a 1 p.m. press conference at Monmouth three hours after the Supreme Court opinion was released, said he still plans to offer sports bets in two weeks, or before the end of May. He said that plan was based on a partial repeal of PASPA—that would have given New Jersey an advantage over other states—but Monmouth still would like to move forward with a “soft opening.”

“My intention is unless somebody stops us, we will be open in two weeks,” Drazin said.

Legislators who attended the press conference said it would be an “executive decision”—Gov. Phil Murphy would decide—whether Monmouth could begin taking bets before the legislature passes a regulatory framework.

Racetracks and casinos would be permitted to offer sports betting in New Jersey. Drazin said lawmakers must decide whether off-track betting facilities such as the two operated by Monmouth can also take sports bets, but it was noted that Borgata, the lone Atlantic City casino that offers simulcasts of horse races, would be able to offer sports bets.

As for the racetracks, Monmouth, Meadowlands and Freehold will offer sports betting. But the 2011 referendum on sports betting contained language related to closed racing facilities that could put Atlantic City Race Course and the Garden State Park property in the mix depending on how the language is interpreted, according to industry sources.

Garden State, which closed in 2001, is now a retail and residential development, but a 10-acre parcel of the property was reserved for an OTB parlor that was never built. Atlantic City shut down in January 2015 for simulcasts and live racing, but is still standing.

Drazin, as he did during a media and horsemen’s event at Monmouth a week earlier, said the launch of sports betting is tied to the survival of Monmouth and should improve the chances of having a regular fall Thoroughbred meet of turf and dirt racing at Meadowlands. Drazin said his goals is to have live racing in New Jersey from April through mid-December.

He also said Monmouth intends to funnel most of its profit from sports betting into purses to provide for a longer and more lucrative racing season for horsemen.

Meanwhile, the National Thoroughbred Racing Association issued a statement on the Supreme Court decision. It noted that horse racing is losing its status as the only legal form of online sports wagering in the U.S.

“Until today, pari-mutuel wagering on horse racing has been the only legal form of sports wagering available throughout most of the United States at both physical locations and online,” NTRA President Alex Waldrop said. “Now that the U.S. Supreme Court has ruled the Professional and Amateur Sports Protection Act unconstitutional and states are free to regulate sports betting as they see fit, our multibillion-dollar industry must rise to the challenges and seize the opportunities presented by this expansion of sports betting.”

Drazin, when asked about the statement, said that from his perspective the industry needs to move quickly at the state and federal levels to ensure racing receives a share of revenue from sports betting. He said tracks in New Jersey are already protected.

The full Supreme Court opinion is available here.