Atlantic City "Bust" For Revel Casino

You know your property isn't that attractive when you can't attract buyers at fire sale prices. That's what happened last week when Atlantic City's Revel Casino didn't attract any qualified bidders at its bankruptcy auction.  Bad bad news.  According to Caesars Entertainment's CEO, not attracting a bidder, "suggests that even at a de minimis price, people are finding it hard to imaging they can make money operating the Revel." That about sums it up for the Revel and likely for a good portion of the current crop of Atlantic City casinos.  As stated in previous posts, here and here, Atlantic City is in big trouble.

As a result, the Revel is scheduled to shut its doors on September 10th.  Stories on this topic can be found here and here.  RIP Revel, it was nice to know you...

Atlantic City Casinos Biting the Dust

It appears the Atlantic City gambling establishment is reacting to Governor Christie's warning to shape up quickly.  As was predicted in an earlier post, how Atlantic City will deal with this warning is to retrench and close up some properties.  That is now happening.  The Atlantic Club casino closed in January and the Showboat casino will close in August.  It is reported that the Trump Plaza casino will close in September.  If the Revel casino can't find a buyer to rescue it and it closes, that would leave Atlantic City with just two-thirds of the major casino properties it started the year with.  Losing one-third in two-thirds of a year is a huge hit to the Atlantic City economy.

To save Atlantic City, a game changer is needed immediately.  Sports betting may be that game changer.  Now the raw revenues from sports betting will not be sufficient, but the fact that something new and unique to Atlantic City is in play will help draw casino patrons from competing jurisdictions like New York, Massachusetts and Pennsylvania.  It also helps New Jersey compete with sports betting that is currently underway in Delaware.

Can casino gaming in Atlantic City survive?  Time will tell.

Next Volley in New Jersey Sports Betting Fight

NorthJersey.com reports that State Senator Ray Lesniak is preparing a bill to allow the private operation of sports betting at the state's racetracks and casinos.  You may think such a bill is already in place and that's what the fight is over.  Well, you're correct.  But this one will be a bit different.

As part of the legal fight, the US Justice Department is claiming that they are not forbidding New Jersey from sports betting, just that there can't be any state regulation of sports betting.  So what the DOJ is saying is that either you can't have any sports betting or if you do, it has to be totally unregulated.  Senator Lesniak plans to call the DOJ's bluff.  If this passes, unfettered sports betting will be authorized in New Jersey and will force the DOJ to admit they were disingenuous with regard to their previous legal positions before the courts, or that they'll have to shut up and let sports betting move forward in states other than their grandfathered favorites, particularly Nevada.

Now it is possible if the Supreme Court takes up the recent New Jersey challenge, this bill might be held up until that appeal is settled.  If the Court doesn't grant review, then I see this bill moving forward quickly to again force a legal showdown with the DOJ

The U.S. Department of Justice is defending the legality of the Professional and Amateur Sports Protection Act of 1992 (PASPA) that bars state-sponsored betting in all but four states. Last week it reiterated its contention that the law is not unconstitutional because it merely prevents the sort of state-sponsored sports betting that New Jersey’s current state law is meant to offer. - See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

The U.S. Department of Justice is defending the legality of the Professional and Amateur Sports Protection Act of 1992 (PASPA) that bars state-sponsored betting in all but four states. Last week it reiterated its contention that the law is not unconstitutional because it merely prevents the sort of state-sponsored sports betting that New Jersey’s current state law is meant to offer. - See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

Other posts on this topic can be found here, here, and here.

State Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - threatening to call the bluff of the federal government regarding sports betting, .
Lesniak spearheaded legalization of online gaming in the state as well as its challenge of a federal law now negating the state’s sports betting law. He said he will move forward on the bill in the Legislature should the U.S. Supreme Court decline to hear the state’s case next month.
“Right now, book your hotel room [in Atlantic City]] for the Super Bowl next year and the NCAA Final Four, because you won’t be able to get one,” Lesniak declared. “We are going to have sports betting in New Jersey next year. Go to the bank on it, because if the [Supreme Court takes the case], it will be overturned.
“And if it isn’t, it’s the position of the Justice Department in their briefs that they are not stopping states,” but telling those states they’re free to stop preventing such betting without officially sponsoring it, he added. “I have legislation being drafted, and that will be introduced, to allow casinos and racetracks to have sports betting on our premises. We just won’t be able to regulate it. We pushed the envelope with internet gaming, and we will push the envelope on sports betting. And we are not going to be deterred.”
The U.S. Department of Justice is defending the legality of the Professional and Amateur Sports Protection Act of 1992 (PASPA) that bars state-sponsored betting in all but four states. Last week it reiterated its contention that the law is not unconstitutional because it merely prevents the sort of state-sponsored sports betting that New Jersey’s current state law is meant to offer.
The federal government and the NCAA, the NFL, and three other professional sports leagues last year prevailed at the U.S. District Court and Third Circuit Court of Appeals levels. That has led Governor Christie to make a final appeal for the U.S. Supreme Court to hear the case — a decision that likely would be made next month.
But Lesniak’s bill would keep the issue on the front-burner even if the nation’s highest court declines to hear the case.
At the Third Circuit court in Philadelphia last June, U.S. Attorney Paul Fishman argued the federal government’s case. Fishman, stressing the point that the PASPA law is not an example of prohibited “commandeering” of state conduct, noted that New Jersey officials could, if they chose to, announce that the state would no longer enforce its sports betting laws.
“It would be a really, really bad idea,” Fishman said, but it would not be prohibited by the 1992 sports betting law that allows only Nevada and three other states to offer sports betting.
The Department of Justice’s most recent filing contends that even if the court questioned the federal law’s prohibition against sports betting, that law also prohibits private operators from offering such gambling. The state has countered that if the main provision is not legitimate, the entire law may need to be struck down.
Meanwhile, New Jersey’s somewhat uneven results for online gaming since it was legalized last November was defended by numerous industry experts.
Richard Schuetz, chairman of the Caifornia Gambling Control Commission, said that criticism of the state’s results was like parents complaining that their 5-month-old baby “doesn’t speak any languages.”
Gaming law attorney Jeff Ifrah later continued the theme: “This baby is walking and talking, and is going be doing that very well for the rest of its life.”
Borgata CEO Tom Ballance said that New Jersey’s nine-month journey from legalization to going live with online gaming is “like trying to paint an airplane while it’s flying.”
State Division of Gaming Enforcement Director David Rebuck said: “Internet gaming exists in all 50 states. It’s just unregulated” in 47 of them, with only New Jersey, Nevada and Delaware offering a legal version of the betting.
- See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

State Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - threatening to call the bluff of the federal government regarding sports betting, .
Lesniak spearheaded legalization of online gaming in the state as well as its challenge of a federal law now negating the state’s sports betting law. He said he will move forward on the bill in the Legislature should the U.S. Supreme Court decline to hear the state’s case next month.
“Right now, book your hotel room [in Atlantic City]] for the Super Bowl next year and the NCAA Final Four, because you won’t be able to get one,” Lesniak declared. “We are going to have sports betting in New Jersey next year. Go to the bank on it, because if the [Supreme Court takes the case], it will be overturned.
“And if it isn’t, it’s the position of the Justice Department in their briefs that they are not stopping states,” but telling those states they’re free to stop preventing such betting without officially sponsoring it, he added. “I have legislation being drafted, and that will be introduced, to allow casinos and racetracks to have sports betting on our premises. We just won’t be able to regulate it. We pushed the envelope with internet gaming, and we will push the envelope on sports betting. And we are not going to be deterred.”
The U.S. Department of Justice is defending the legality of the Professional and Amateur Sports Protection Act of 1992 (PASPA) that bars state-sponsored betting in all but four states. Last week it reiterated its contention that the law is not unconstitutional because it merely prevents the sort of state-sponsored sports betting that New Jersey’s current state law is meant to offer.
The federal government and the NCAA, the NFL, and three other professional sports leagues last year prevailed at the U.S. District Court and Third Circuit Court of Appeals levels. That has led Governor Christie to make a final appeal for the U.S. Supreme Court to hear the case — a decision that likely would be made next month.
But Lesniak’s bill would keep the issue on the front-burner even if the nation’s highest court declines to hear the case.
At the Third Circuit court in Philadelphia last June, U.S. Attorney Paul Fishman argued the federal government’s case. Fishman, stressing the point that the PASPA law is not an example of prohibited “commandeering” of state conduct, noted that New Jersey officials could, if they chose to, announce that the state would no longer enforce its sports betting laws.
“It would be a really, really bad idea,” Fishman said, but it would not be prohibited by the 1992 sports betting law that allows only Nevada and three other states to offer sports betting.
The Department of Justice’s most recent filing contends that even if the court questioned the federal law’s prohibition against sports betting, that law also prohibits private operators from offering such gambling. The state has countered that if the main provision is not legitimate, the entire law may need to be struck down.
Meanwhile, New Jersey’s somewhat uneven results for online gaming since it was legalized last November was defended by numerous industry experts.
Richard Schuetz, chairman of the Caifornia Gambling Control Commission, said that criticism of the state’s results was like parents complaining that their 5-month-old baby “doesn’t speak any languages.”
Gaming law attorney Jeff Ifrah later continued the theme: “This baby is walking and talking, and is going be doing that very well for the rest of its life.”
Borgata CEO Tom Ballance said that New Jersey’s nine-month journey from legalization to going live with online gaming is “like trying to paint an airplane while it’s flying.”
State Division of Gaming Enforcement Director David Rebuck said: “Internet gaming exists in all 50 states. It’s just unregulated” in 47 of them, with only New Jersey, Nevada and Delaware offering a legal version of the betting.
- See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

State Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - threatening to call the bluff of the federal government regarding sports betting, .
Lesniak spearheaded legalization of online gaming in the state as well as its challenge of a federal law now negating the state’s sports betting law. He said he will move forward on the bill in the Legislature should the U.S. Supreme Court decline to hear the state’s case next month.
“Right now, book your hotel room [in Atlantic City]] for the Super Bowl next year and the NCAA Final Four, because you won’t be able to get one,” Lesniak declared. “We are going to have sports betting in New Jersey next year. Go to the bank on it, because if the [Supreme Court takes the case], it will be overturned.
“And if it isn’t, it’s the position of the Justice Department in their briefs that they are not stopping states,” but telling those states they’re free to stop preventing such betting without officially sponsoring it, he added. “I have legislation being drafted, and that will be introduced, to allow casinos and racetracks to have sports betting on our premises. We just won’t be able to regulate it. We pushed the envelope with internet gaming, and we will push the envelope on sports betting. And we are not going to be deterred.”
The U.S. Department of Justice is defending the legality of the Professional and Amateur Sports Protection Act of 1992 (PASPA) that bars state-sponsored betting in all but four states. Last week it reiterated its contention that the law is not unconstitutional because it merely prevents the sort of state-sponsored sports betting that New Jersey’s current state law is meant to offer.
The federal government and the NCAA, the NFL, and three other professional sports leagues last year prevailed at the U.S. District Court and Third Circuit Court of Appeals levels. That has led Governor Christie to make a final appeal for the U.S. Supreme Court to hear the case — a decision that likely would be made next month.
But Lesniak’s bill would keep the issue on the front-burner even if the nation’s highest court declines to hear the case.
At the Third Circuit court in Philadelphia last June, U.S. Attorney Paul Fishman argued the federal government’s case. Fishman, stressing the point that the PASPA law is not an example of prohibited “commandeering” of state conduct, noted that New Jersey officials could, if they chose to, announce that the state would no longer enforce its sports betting laws.
“It would be a really, really bad idea,” Fishman said, but it would not be prohibited by the 1992 sports betting law that allows only Nevada and three other states to offer sports betting.
The Department of Justice’s most recent filing contends that even if the court questioned the federal law’s prohibition against sports betting, that law also prohibits private operators from offering such gambling. The state has countered that if the main provision is not legitimate, the entire law may need to be struck down.
Meanwhile, New Jersey’s somewhat uneven results for online gaming since it was legalized last November was defended by numerous industry experts.
Richard Schuetz, chairman of the Caifornia Gambling Control Commission, said that criticism of the state’s results was like parents complaining that their 5-month-old baby “doesn’t speak any languages.”
Gaming law attorney Jeff Ifrah later continued the theme: “This baby is walking and talking, and is going be doing that very well for the rest of its life.”
Borgata CEO Tom Ballance said that New Jersey’s nine-month journey from legalization to going live with online gaming is “like trying to paint an airplane while it’s flying.”
State Division of Gaming Enforcement Director David Rebuck said: “Internet gaming exists in all 50 states. It’s just unregulated” in 47 of them, with only New Jersey, Nevada and Delaware offering a legal version of the betting.
- See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

tate Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - threatening to call the bluff of the federal government regarding sports betting, .
Lesniak spearheaded legalization of online gaming in the state as well as its challenge of a federal law now negating the state’s sports betting law. He said he will move forward on the bill in the Legislature should the U.S. Supreme Court decline to hear the state’s case next month.
“Right now, book your hotel room [in Atlantic City]] for the Super Bowl next year and the NCAA Final Four, because you won’t be able to get one,” Lesniak declared. “We are going to have sports betting in New Jersey next year. Go to the bank on it, because if the [Supreme Court takes the case], it will be overturned.
“And if it isn’t, it’s the position of the Justice Department in their briefs that they are not stopping states,” but telling those states they’re free to stop preventing such betting without officially sponsoring it, he added. “I have legislation being drafted, and that will be introduced, to allow casinos and racetracks to have sports betting on our premises. We just won’t be able to regulate it. We pushed the envelope with internet gaming, and we will push the envelope on sports betting. And we are not going to be deterred.”
The U.S. Department of Justice is defending the legality of the Professional and Amateur Sports Protection Act of 1992 (PASPA) that bars state-sponsored betting in all but four states. Last week it reiterated its contention that the law is not unconstitutional because it merely prevents the sort of state-sponsored sports betting that New Jersey’s current state law is meant to offer.
The federal government and the NCAA, the NFL, and three other professional sports leagues last year prevailed at the U.S. District Court and Third Circuit Court of Appeals levels. That has led Governor Christie to make a final appeal for the U.S. Supreme Court to hear the case — a decision that likely would be made next month.
But Lesniak’s bill would keep the issue on the front-burner even if the nation’s highest court declines to hear the case.
At the Third Circuit court in Philadelphia last June, U.S. Attorney Paul Fishman argued the federal government’s case. Fishman, stressing the point that the PASPA law is not an example of prohibited “commandeering” of state conduct, noted that New Jersey officials could, if they chose to, announce that the state would no longer enforce its sports betting laws.
“It would be a really, really bad idea,” Fishman said, but it would not be prohibited by the 1992 sports betting law that allows only Nevada and three other states to offer sports betting.
The Department of Justice’s most recent filing contends that even if the court questioned the federal law’s prohibition against sports betting, that law also prohibits private operators from offering such gambling. The state has countered that if the main provision is not legitimate, the entire law may need to be struck down.
Meanwhile, New Jersey’s somewhat uneven results for online gaming since it was legalized last November was defended by numerous industry experts.
Richard Schuetz, chairman of the Caifornia Gambling Control Commission, said that criticism of the state’s results was like parents complaining that their 5-month-old baby “doesn’t speak any languages.”
Gaming law attorney Jeff Ifrah later continued the theme: “This baby is walking and talking, and is going be doing that very well for the rest of its life.”
Borgata CEO Tom Ballance said that New Jersey’s nine-month journey from legalization to going live with online gaming is “like trying to paint an airplane while it’s flying.”
State Division of Gaming Enforcement Director David Rebuck said: “Internet gaming exists in all 50 states. It’s just unregulated” in 47 of them, with only New Jersey, Nevada and Delaware offering a legal version of the betting.
Email: brennan@northjersey.com  Blog: northjersey.com/brennan

Tags:

  News  |    NJ State News  |    Politics  |    Bergen County, N.J.  |    Passaic County, N.J.  | 

Inside NorthJersey.com

News

Cedar Grove youth lacrosse ...

News

Obama seeks to reframe ...

News

Paterson police investigating ...

News

Train accident kills at least ...

- See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

tate Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - threatening to call the bluff of the federal government regarding sports betting, .
Lesniak spearheaded legalization of online gaming in the state as well as its challenge of a federal law now negating the state’s sports betting law. He said he will move forward on the bill in the Legislature should the U.S. Supreme Court decline to hear the state’s case next month.
“Right now, book your hotel room [in Atlantic City]] for the Super Bowl next year and the NCAA Final Four, because you won’t be able to get one,” Lesniak declared. “We are going to have sports betting in New Jersey next year. Go to the bank on it, because if the [Supreme Court takes the case], it will be overturned.
“And if it isn’t, it’s the position of the Justice Department in their briefs that they are not stopping states,” but telling those states they’re free to stop preventing such betting without officially sponsoring it, he added. “I have legislation being drafted, and that will be introduced, to allow casinos and racetracks to have sports betting on our premises. We just won’t be able to regulate it. We pushed the envelope with internet gaming, and we will push the envelope on sports betting. And we are not going to be deterred.”
The U.S. Department of Justice is defending the legality of the Professional and Amateur Sports Protection Act of 1992 (PASPA) that bars state-sponsored betting in all but four states. Last week it reiterated its contention that the law is not unconstitutional because it merely prevents the sort of state-sponsored sports betting that New Jersey’s current state law is meant to offer.
The federal government and the NCAA, the NFL, and three other professional sports leagues last year prevailed at the U.S. District Court and Third Circuit Court of Appeals levels. That has led Governor Christie to make a final appeal for the U.S. Supreme Court to hear the case — a decision that likely would be made next month.
But Lesniak’s bill would keep the issue on the front-burner even if the nation’s highest court declines to hear the case.
At the Third Circuit court in Philadelphia last June, U.S. Attorney Paul Fishman argued the federal government’s case. Fishman, stressing the point that the PASPA law is not an example of prohibited “commandeering” of state conduct, noted that New Jersey officials could, if they chose to, announce that the state would no longer enforce its sports betting laws.
“It would be a really, really bad idea,” Fishman said, but it would not be prohibited by the 1992 sports betting law that allows only Nevada and three other states to offer sports betting.
The Department of Justice’s most recent filing contends that even if the court questioned the federal law’s prohibition against sports betting, that law also prohibits private operators from offering such gambling. The state has countered that if the main provision is not legitimate, the entire law may need to be struck down.
Meanwhile, New Jersey’s somewhat uneven results for online gaming since it was legalized last November was defended by numerous industry experts.
Richard Schuetz, chairman of the Caifornia Gambling Control Commission, said that criticism of the state’s results was like parents complaining that their 5-month-old baby “doesn’t speak any languages.”
Gaming law attorney Jeff Ifrah later continued the theme: “This baby is walking and talking, and is going be doing that very well for the rest of its life.”
Borgata CEO Tom Ballance said that New Jersey’s nine-month journey from legalization to going live with online gaming is “like trying to paint an airplane while it’s flying.”
State Division of Gaming Enforcement Director David Rebuck said: “Internet gaming exists in all 50 states. It’s just unregulated” in 47 of them, with only New Jersey, Nevada and Delaware offering a legal version of the betting.
Email: brennan@northjersey.com  Blog: northjersey.com/brennan

Tags:

  News  |    NJ State News  |    Politics  |    Bergen County, N.J.  |    Passaic County, N.J.  | 

Inside NorthJersey.com

News

Cedar Grove youth lacrosse ...

News

Obama seeks to reframe ...

News

Paterson police investigating ...

News

Train accident kills at least ...

- See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

State Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

State Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

State Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

State Sen. Ray Lesniak, D-Union, on Monday announced at the East Coast Gaming Conference in Atlantic City that he is preparing a bill to allow for private operation of sports betting at the state’s racetracks and casinos - See more at: http://www.northjersey.com/news/nj-sen-lesniak-to-craft-sports-betting-bill-for-racetracks-casinos-1.1019252#sthash.0QYM6XkZ.X9hgh8DP.dpuf

New Legal Brief Supports New Jersey Sports Betting

The libertarian Cato Institute and the Pacific Legal Foundation have filed an amicus brief in support of New Jersey's appeal to the US Supreme Court over its desire to offer legal sports betting within the state.  This is an interesting development as this brief is being done by third parties, with no direct stake in the matter.

It is unknown how much weight this will bear on the case, but for a well-regarded think tank to step into a case like this must be welcomed by pro-sports betting interests.

The story on this development can be found here.

Atlantic City Gets a Warning

New Jersey governor Chris Christie is laying down the law on Atlantic City's casinos.  He is giving them the year of 2014 to make strides to improve their financial health.  The Press of Atlantic City story quotes Christie:

"It's obviously a critical year because we need to begin to see progress in Atlantic City or we're going to start considering alternatives," and, "It's a year when we have to show some significant results."

Can't be much clearer than that.  So, what happens if results aren't obtained?  Well, Atlantic City's casino gambling monopoly would be at risk.  Competing interests, such as the horse racing industry, are desirous of getting casino gaming at their properties.  Another lackluster year out of Atlantic City would only fuel that fire.

How Atlantic City will intend to meet this hurdle is to consolidate - reduce the number of casinos and to an extent, reduce the number of hotel rooms.  The remaining casinos would hopefully be in better shape as they will make more money on a per property basis, even if the result would be less overall revenue, from both gaming and non-gaming sources.  If not, the competing interests will want to move casino gambling outside of Atlantic City to make their venues more competitive with increased casino gaming in adjoining states like New York, Pennsylvania and Delaware.

Time may be running out on Atlantic City's casino monopoly.

New Jersey Taking Sports Betting Fight to US Supreme Court

The Las Vegas Review-Journal reports that Governor Christie of New Jersey is not giving up on the fight to allow sports betting in New Jersey.  After the appeals court declined to rehear the case, this is the only option left for New Jersey.

I have provided my views on this several times, where I think New Jersey is in the right in this case.  Each state has the ability on their own to decide what kinds of gambling, if any, should exist within their states.

My view is that the Supreme Court will take up this case due to the controversy between federal and state powers, which is the kind of topic the Supreme Court was designed to handle.

Other posts on this topic can be found here, here, here and here.

Appeals Court Ruling Against New Jersey Shows Path To Sports Betting

The United States Court of Appeals for the Third Circuit yesterday ruled against New Jersey in its attempt to implement sports betting by a 2-1 decision.  The case is now clear for New Jersey to appeal to the US Supreme Court.  Although a defeat at this stage, New Jersey can actually see very good news.  For the first time, a judge did side with New Jersey and against the US and the sports leagues.  The dissenting judge put forward a very well reasoned dissent that picked apart the majority opinion and showed in detail how PASPA was unconstitutional.

New Jersey does have the option of asking for the full Third Circuit to hear the case.  The information I received is that it doesn't do much for New Jersey to do that.  The first thing is that the full court could side with the majority, which doesn't help.  The second thing is that the loser is going to go to the US Supreme Court anyway, so why not go there now and save time and money?  That appears to be the path New Jersey will take.

The opponents of sports betting will take this as a great victory - not so fast.  From the majority opinion, this sentiment I found interesting:

We are cognizant that certain questions related to this case—whether gambling on sporting events is harmful to the games’ integrity and whether states should be permitted to license and profit from the activity—engender strong views. But we are not asked to judge the wisdom of PASPA or of New Jersey’s law, or of the desirability of the activities they seek to regulate. We speak only to the legality of these measures as a matter of constitutional law. Although this “case is made difficult by [Appellants’] strong arguments” in support of New Jersey’s law as a policy matter, see Gonzales v. Raich, 545 U.S. 1, 9 (2005), our duty is to “say what the law is,” Marbury v. Madison, 1 Cranch 137, 177 (1803). “If two laws conflict with each other, the courts must decide on the operation of each.” Id. New Jersey’s sports wagering law conflicts with PASPA and, under our Constitution, must yield. We will affirm the District Court’s judgment.

So they pretty much put blinders on and crafted an affirming opinion based on a subset of the issues.  The court also just used the "rational basis" test and took only a cursory look at PASPA to find anything to say that PASPA was a regulation of interstate commerce, as opposed to Congress using a state as a puppet, which isn't allowed.  In other words, if Congress wanted to outlaw the sale of beef jerky, Congress can do that directly, but they cannot tell the states to pass laws to prohibit beef jerky or keep them from passing laws allowing beef jerky, while declining to do so themselves.  In the case of PASPA, they allow some states to have sports betting, but not others, which is even more strange.  They later in the opinion stated a very odd way of how a state could comply with PASPA:

Thus, under PASPA, on the one hand, a state may repeal its sports wagering ban, a move that will result in the expenditure of no resources or effort by any official. On the other hand, a state may choose to keep a complete ban on sports gambling, but it is left up to each state to decide how much of a law enforcement priority it wants to make of sports gambling, or what the exact contours of the prohibition will be.

We agree that these are not easy choices. And it is perhaps true (although there is no textual or other support for the idea) that Congress may have suspected that most states would choose to keep an actual prohibition on sports gambling on the books, rather than permit that activity to go on unregulated. But the fact that Congress gave the states a hard or tempting choice does not mean that they were given no choice at all, or that the choices are otherwise unconstitutional. See United States v. Martinez-Salazar, 528 U.S. 304, 315 (2000) (“A hard choice is not the same as no choice.”); see also F.E.R.C., 456 U.S. at 766 (upholding a choice between expending state resources to consider federal standards or abandoning field to federal regulation).

What does this mean?  The court is saying that New Jersey does not run afoul of PASPA if they ban sports betting or they totally deregulate sports betting.  So, in theory, New Jersey could simply allow sports betting with no regulation or oversight whatsoever and the US Government, sports leagues and NCAA couldn't do a thing about it.  That logic is insane and was properly called out in the dissenting opinion.

The opening of the dissent is well written and sums up what I believe the essence of New Jersey's appeal to the US Supreme Court will be:

I agree with my colleagues that the Leagues have standing to challenge New Jersey’s Sports Wagering Law, N.J. Stat. Ann. § 5:12A-2, and that the Professional and Amateur Sports Protection Act (“PASPA”), 28 U.S.C. § 3702, does not violate the principle of “equal sovereignty.” I therefore join parts III and IV.C of the majority’s decision in full. I also agree that, ordinarily, Congress has the authority to regulate gambling pursuant to the Commerce Clause, and thus I join part IV.A of the majority opinion as well. Yet, PASPA is no ordinary federal statute that directly regulates interstate commerce or activities substantially affecting such commerce. Instead, PASPA prohibits states from authorizing sports gambling and thereby directs how states must treat such activity. Indeed, according to my colleagues, PASPA essentially gives the states the choice of allowing totally unregulated betting on sporting events or prohibiting all such gambling. Because this congressional directive violates the principles of federalism as articulated by the Supreme Court in United States v. New York, 505 U.S. 142 (1992), and Printz v. United States, 521 U.S. 898 (1997), I respectfully dissent from that part of the majority’s opinion that upholds PASPA as a constitutional exercise of congressional authority.

This case isn't over and it is my view that the Supreme Court will take it up.  How it turns out is a matter of debate, but my view is that New Jersey should prevail.  It should be noted that a recent statistic indicated that 60% of the rulings from the Third Circuit Court of Appeals are reversed by the Supreme Court.  I think yesterday's ruling overall wasn't too bad at all for New Jersey and those wanting expanded legal sports betting in the USA.

New Jersey Governor Optimistic In Sports Betting Legal Case

Cardplayer.com is reporting that New Jersey Governor Christie is just as confident as ever about his state's prospects in ultimately being allowed to offer bona fide sports wagering.  “I think New Jersey is going to be victorious ultimately,” Christie said Monday on the “Boomer and Carton in the Morning” show in New York, according to The Washington Times. "There is no reason why Las Vegas, the state of Nevada, should have a monopoly on sports gambling.”

The case is still winding its way through the courts and will likely end up at the US Supreme Court before finally being settled.  Given that, even if successful, don't expect sports betting in New Jersey for a couple of years.

New Jersey Casinos Not Yet Offering Fantasy Sports Contests

Although New Jersey published regulations authorizing pay-to-play fantasy sports contests back in March, not one Atlantic City casino has of yet moved forward with an offering.  The reasons for this are discussed in the story, which can be found here.  The were two primary reasons discussed detailing why no fantasy games are yet offered.  One is that the casinos didn't see a successful path forward competing with larger, national entities such as ESPN.  The other is that this is summer and allegedly sports betting only revolves around the NCAA basketball tournament and the Super Bowl.

I'll quibble with both of these reasons, but first I do need to quibble with the article ever equating the concept of fantasy sports contests and betting.  Playing fantasy sports games is not betting.  Fantasy sports games are a game of skill and by legal definition not gambling, provided the games, gameplay and prize structures fit within the statutory safe harbors.  It is just journalistic laziness to refer to such contests as betting.

With regard to the reason that the casinos don't see an easy path to compete with a similar game to the ESPNs of the world, valid point.  The key is to find a fantasy sports game that would be attractive to players that the ESPNs of the world can't emulate.  Does such a fantasy sports game of that nature exist?  Yes.  We will discuss that later.  Not having a compelling game to draw patrons that would provide sufficient direct and indirect revenue to offset the cost of offering is a very valid point.  In my view, none of the existing fantasy games that have been considered have the hope of meeting that hurdle.

The reason for that varies on the type of game.  For the league-based season-long contests, the contests are just too long and the casinos rightly have figured out that they may be able to draw customers a few times during the year, but not on a weekly basis for an extended period.  For the short-term contests, the prize structures are such that the gross margins of these games are just too thin to satisfy the profit needs of the game operator and the casino.

Regarding the reason that the casinos aren't offering the games because this is summertime and there's no interest in sports contests for money is a crock.  Fantasy baseball is going on now and it is indeed quite popular and indeed people are playing for money.

So what kind of fantasy sports contest would have a hope of being viable for Atlantic City casinos?  Again, it would have to be something that would be attractive to fantasy sports players and perhaps even sports bettors (even though sports betting is not yet legal in New Jersey).  By attractive, that means a game that has a good prize to entry fee ratio (odds if we were talking about betting).  Also, attractive means that the margin of the games would be sufficient to satisfy the needs of the game operator and the casino with regard to profit.  No sense offering a game that costs more to offer than revenue generated, right?  The final nuance of attractive would be a fantasy game that offered some level of exclusivity, something the current large fantasy sports operators can't match.

Is there such a fantasy sport game available that can do this?  Yes.  YouGaming's pari-mutuel fantasy sports game is such a game.  Here's why:

First, the pari-mutuel fantasy sports game concept is protected by no less than 3 US Patents.  That takes care of the exclusivity element.

Second, the games can have gross margins that will satisfy the profit needs of the casinos and game operator.  For typical "daily" fantasy sports games, gross margins may vary from 5% to 10%.  Given the costs of operation, it will be practically impossible to have profitable games.  The pari-mutuel fantasy sports games can easily have gross margins in the 20% to 30% range, and can be offered in the "daily" format.  Now if you compare that to the theoretical margin on a straight sports bet, which is 4.54%, this advantage is substantial.

Third, the pari-mutuel fantasy sports games can also offer games with high gross margins while offering superior prize to entry fee ratios (odds if we were talking betting), allowing the game operator and casino to meet their profit objectives.

So given a game where one out of every five entries can win a prize, where the top prize is 100 times the entry fee, the gross margin of such a game is greater than 20%, and having a level of exclusivity for the casino(s) that offer it, one can see that this kind of game would have a level of attractiveness to Atlantic City properties.

Also, this kind of game would be attractive to offer in an online format to the casino(s)' customers.  Unlike some of the free play casino games used as a marketing tool, this game format can be offered online in a pay-to-play format, generating revenue and awarding cash prizes.  This offering of course done in a branded format.  The casino will be able to extend its brick and mortar presence with a revenue-generating game.

There is another potential advantage to such a game, but it will have to wait until New Jersey is officially allowed to offer sports wagering.  Such a game can also be offered in a wagering game format, which current fantasy sports games will have great difficulty doing, and even if they did, would not result in a superior wagering game to conventional sports betting.

Other States File Legal Briefs in Support of New Jersey Sports Betting

The briefs regarding the appeal of the recent New Jersey sports betting court ruling are continuing to flow in.  NorthJersey.com reports that the attorney generals in four states, Virginia, West Virginia, Georgia and Kansas, filed amicus briefs in support of New Jersey's efforts to offer sports betting within the state.  The briefs were specific to mention that they did not take a position regarding the sports betting laws under dispute but attacked the US Government position and District Court opinion on sovereignty grounds.

This is an interesting argument.  It appears that this was studied beforehand and coordinated.  Obviously, these states think they have a very good argument on this point and don't want to cloud the issue with details specific to sports betting.

Their point was that by having Congress pick and choose what states can do what, it tramples on the sovereignty of the states.  More than that, the briefs attack the premise of the District Court judge that upheld the sports betting ban (which allow some states to offer sports betting but not others) due to the fact that Congress merely prohibited the states from performing an affirmative action in allowing sports betting.  The four states view this legal position as an error as this court ruling will allow Congress to infringe on state sovereignty by using the tactic of preventing states from performing actions like licensing and permitting as a means of control - an indirect method of federal control over state activity.

The blog puts forward a simple example regarding fishing licenses.  I am sure when the case is heard by the Court of Appeals, there will be better examples ready by the states.  Again, what I find interesting is that the states are very much avoiding the issue of sports betting.  They must feel the issue of federal vs. state sovereignty is quite strong and that the federal side will have difficulty countering.  The Court of Appeals will now more likely take this case under even more consideration as it is not now just a single state (New Jersey) wanting sports betting.  The court will need to decide a larger constitutional issue and if this argument is sufficient, the sports betting ban will have to fall as a natural consequence.

My view is that when this case is ultimately decided by the Supreme Court (the loser here will no doubt appeal), there will be constraints on Congress' actions that will ultimately allow each state to decide for themselves if they desire sports betting.  Nevada's sports betting monopoly days are likely coming to an end.

Atlantic City Casinos To Add Fantasy Sports Games For Money

Sticking a finger in the eye of the sports leagues that have won the first legal decision to prevent the State of New Jersey to offer sports betting, New Jersey is allowing casinos to offer daily fantasy sports games as an alternative.  According to the New York Times article, the state’s Division of Gaming Enforcement published regulations establishing standards for casinos to offer fantasy sports tournaments for money.  Even though players will pay money to play and can win cash, New Jersey won't regulate these games as gambling, dovetailing with federal law that distinguishes between fantasy sports and sports gambling.

From a gaming industry perspective, these games are not envisioned to be money makers for the casinos on their own.  They will be used as marketing tools to help attract players that will hopefully stay and play other games, eat at the restaurants, etc.  From New Jersey's perspective, this may open another front in the battle over sports betting, showing the court that what the sports leagues are doing with fantasy sports really isn't all that different than sports betting.  Don't be surprised if the casinos expand the offering to include college sports in addition to professional sports, hoping the NCAA tries to legally stop the activity.  That may be the legal trap being set by New Jersey.

The Times article does quote how this could be good for casinos as people will feel comfortable online with a trusted entity.  The person who said that from a online gambling advocacy group obviously doesn't know anything about fantasy sports.  Over 30 million Americans play fantasy sports now, predominantly online, with large players such as CBS and Yahoo.  They aren't going to switch to some Atlantic casino website because a state government says it is OK.  The federal government back in 2006 said it is OK.

Don't read too much into this development as a great positive for fantasy sports.  Think of this development as another chess move in the battle for sports betting in New Jersey.  If New Jersey wins, that is the big development as that will allow any state to offer sports betting if it desires.

New Jersey Sports Betting Loses in District Court

Although not totally unexpected, a Federal judge ruled against the State of New Jersey with regard to its challenge to the constitutionality of the Professional and Amateur Sports Protection Act (PASPA).  So, with this ruling, New Jersey can not proceed with implementing sports betting.  As it stands, sports betting is still allowed in just four states:  Nevada, Delaware, Oregon and Montana.

Don't expect New Jersey to quit - an appeal to the US Court of Appeals for the Third Circuit is almost a given.  Whoever loses there will almost certainly appeal to the US Supreme Court.  This is a multi-round fight, but the first round goes to the NCAA and sports leagues.

Read more about this issue here.

New Jersey Sports Betting Lawsuit Update

In the last couple of weeks there have been a couple of events regarding the lawsuit challenging New Jersey's efforts to initiate sports betting.  Several sports organizations (read leagues) filed suit invoking the federal Professional and Amateur Sports Protection Act (PASPA) to keep New Jersey out of the sports betting business.  PASPA, passed in 1993, bans sports betting in all but 4 "grandfathered" states - Nevada, Oregon, Delaware and Montana.

The first event was the ruling by the judge to deny the motion by the leagues to push back the court timetable of the case by 30 days.  The New Jersey interests opposed this motion and the judge sided with New Jersey.  The article on that event can be found here.

The second event was the State of New Jersey filing a brief directly challenging the constitutionality of PASPA.  This is the event that I think will eventually spell the doom of PASPA, and allow any state if it wishes to allow sports betting.  The article on this story can be found here.

The key argument from the brief quoted in the article is very strong and I don't think the sports leagues or the US Government can refute:

“PASPA does not seek to curtail sports wagering by directly prohibiting such activity in some or all states,” New Jersey’s lawyers wrote in the brief. “Instead, it mandates that certain states not ‘authorize by law or compact’ sports wagering and thereby requires those same states to maintain and enforce their pre-existing bans on sports wagering. The Tenth Amendment, under established precedent, does not permit the federal government to ‘commandeer’ state legislative and enforcement functions in such a manner.”

Its one thing for the federal government to exercise its authority to regulate interstate commerce.  What it can't do is mandate restrictions on the sovereign authority of a state with regard to its ability to craft state law.

The other argument here is that under the Constitution, the federal government does not have plenary police power like the states have.  In other words, states have full ability to regulate health, welfare, safety and morality of its citizens - the federal government does not.  The federal system is based on a central government of limited enumerated powers.  The regulation of gambling within a state has always been the purview of the states.  That is why some states allow lotteries or horse racing and some don't.

The next big event will the depositions of several sports league commissioners, initially scheduled for mid-December.  The outcome of those depositions will be of great interest to how this case proceeds.

New Jersey Moving Ahead with Sports Betting

The Associated Press is reporting that New Jersey plans to begin issuing licenses for sports betting as early as January of next year, even though the lawsuit attempting to block this expansion of betting is still in process.  New Jersey continues to be aggressive, putting more pressure on the legal process to concede that historically the conduct of gambling within a state's borders has historically been up to the states due to the states' plenary police power, not given to the federal government under the Constitution.

New Jersey, if it prevails, will have shown its methodical attack on the legality of PASPA was well crafted and executed, both on a legal and political basis.  It is my view that New Jersey will ultimately prevail and each state will decide for themselves if they desire to have sports betting within their borders.

Sports betting is desired by the voters of New Jersey, as shown in this year's poll.  Also, Californians are also in favor of sports betting, with a bill to authorize getting just a step away from making it to the governor's desk for signature.  I expect that bill to be revived next spring.  You can read the blog posts on these polls here and here.

For online operators, don't expect any opportunities in the short-term as this betting will be done at physical locations, not online.  Only online pari-mutuel horse race betting will be the only authorized online sports-related gambling in the USA for quite some time.

New Jersey's Split Personality With Regard To Legalizing New Gambling

New Jersey.com reports an AP story regarding the results of a recent poll that shows conflicting desire for various new legalized gambling options within the state.  What it shows is that residents desire to add sports betting to the gambling options of the state, but that they like their gambling at brick and mortar facilities.  The recent poll showed that 58% opposed the establishment of online gambling, with just 31% supporting (the remainder undecided).  This poll occurred after a positive vote desiring sports betting and having the associated sports betting bill signed into law by Gov. Christie.  So more gambling is OK, but not just "any" gambling.

With regard to sports betting, the almost opposite result showed in the poll.  The recent results showed that 60% wanted legal sports betting with just 26% opposed and 14% undecided.  Sports betting (but not online - at physical locations) is what New Jersey residents want.  Since sports betting is happening in large measure anyway, but illegally and not regulated and taxed, legalization helps bring this already existing gambling into the open and also will help generate tax revenue for the state.  A true win-win.

New Jersey Governor Signs Sports Betting Bill

New Jersey Governor Chris Christie signed the recently passed sports betting bill into law. This does not mean that sports betting (the legal kind - I'm sure the Sopranos are still open for business) will be available at Atlantic City casinos and New Jersey racetracks anytime soon. It does mean that there is now a true controversy to allow a lawsuit challenging the constitutionality of the Professional and Amateur Sports Protection Act (PASPA) to proceed.

A similar lawsuit was filed by State Senator Ray Lesniak a couple of years back, but that was thrown out on procedural issues, namely sports betting wasn't currently allowed by law and the suit needed to be filed by the state. A November referendum, which passed by an almost 2-1 margin, the recent bill, and the governor's signature eliminate the procedural issues. The next step is for the Attorney General to file the revived challenge in federal court.

In my opinion, the federal government is going to have a very difficult time justifying a law which says that some states can engage in a particular economic activity, while others can't. And in addition, that prohibited activity has been historically within the rights of the states to control. Furthermore, this activity can be directly tied to how a state can raise revenue. All these factors are hugely in favor of the right of any state to decide how to control gambling within its borders and how to raise state tax revenues. Of course, highlighting the fact that the current prohibition basically ensures a monopoly for big Nevada casinos may have some impact on a federal judge who sits on the bench in New Jersey.

The CBS News article can be found here. Other posts regarding New Jersey sports betting can be found here, here and here.

New Jersey Legislature Passes Sports Betting Bill

As expected, the New Jersey legislature passed a bill allowing betting on professional and college sports at casinos and racetracks. This was going to happen after the voters approved a non-binding vote wanting sports betting back in November by almost a 2-to-1 margin. The measure passed on the last day of the legislative session by wide margins, 73-0 in the Assembly and 35-2 in the Senate.

The next step in the process is for Governor Christie to sign the legislation, which is a given as he has made public statements in support of the bill. The hard work will then begin which is to revive the federal lawsuit challenging the constitutionality of the Professional and Amateur Sports Protection Act (PASPA). That suit could go either way, but on the surface, a law that allows 4 states to have sports betting but prohibiting the other 46 states doesn't seem logical.

If New Jersey can have sports betting, it will be a huge advantage for their state, at least until neighboring states do the same. There is a potential political maneuver that could extend New Jersey's advantage for a long time. That maneuver would be the federal government adds New Jersey to the allowed list of states, but keeps the law in place. Nevada may be in favor of this as it recognizes the writing on the wall, but limits the infringement on its de facto sports betting monopoly in the U.S.

The Press of Atlantic City article can be found here.

Atlantic City Gambling Revenue Takes Hit

Test Test Test

Bloomberg reports that Atlantic City gambling revenue fell 12% in September 2010 from September 2009 levels. Gambling revenue was $2.8 billion in the first 3 quarters of 2010, which was almost 9% less than the same period in 2009.

The economy is definitely a factor, but the impact of competition must be looked at as the primary factor for reduced gaming revenue. Surrounding states such as Delaware, New York and Pennsylvania have increased their gambling offerings for their local populations. No need to travel to Atlantic City if the gambler can play close to home.

Atlantic City needs to prevail in New Jersey's efforts to allow sports betting to provide the competitive differentiator to bring back this destination. Otherwise, the long term trend for Atlantic City may not look promising.

See previous posts on New Jersey sports betting here, here and here. The posts discuss New Jersey's efforts and surveys with regard to establishing sports betting and overturning PASPA.

New Jersey Still Looking at Sports Betting

The AP reports that New Jersey wants voters to decide this fall if sports and internet betting should be legalized in the state. Several Democratic legislators are pushing for a ballot initiative for the November ballot. In addition, they have called for a gambling summit that would assemble legislators, gambling industry figures and policy advisers.

The story quotes State Senator Steve Lesniak, " 'There are billions of dollars of gambling money that we're leaving on the table," said Lesniak, who represents a district in northern New Jersey, near where the Meadowlands racetrack wants to offer slot machines to attract new gamblers. That's something Atlantic City has vowed never to let happen.' "

Senator Lesniak has already sued the federal government over the Professional and Amateur Sports Protection Act (PASPA), which effectively bans sports betting in all but four states: Nevada, Oregon, Montana and Delaware. He is challenging PASPA based on constitutional grounds.

In recent years, other states have expanded their gambling offerings, pulling market share from Atlantic City. Senator Lesniak is quoted, " 'Atlantic City is dying,' Lesniak said. 'The Meadowlands is dying. Our racetracks are dying. We have time to get this right and craft a constitutional amendment that will maximize revenues for the state and for our tourist destinations.' " I think he is correct. If New Jersey doesn't do something, Atlantic City gaming will become a shell of what it once was.

Other posts on this topic can be viewed here and here.