New Jersey is heading to federal court in October in a bid to allow its struggling casinos and racetracks to offer betting on sports events. States have broad powers to sanction and regulate most kinds of gambling, but a federal law passed in 1992 blocks them from making book on sports events.
That is, the law blocks most states. The Professional and Amateur Sports Protection Act provided exemptions for states that already had laws permitting sports betting. Nevada is the only state that has such wagering now.
New Jersey voters overwhelmingly approved a referendum question in 2011 to legalize sports betting, but professional leagues and the NCAA challenged that in court. New Jersey has so far failed in court, but it’s taking another stab at a favorable ruling. Many legal experts expect the state to be shot down again.
The question, though, 22 years after the law was passed, is whether a federal pre-emption of state authority over sports betting still makes sense. State-controlled gambling has expanded since then in many forms. Casino gambling is offered in 23 states, and 44 states participate in some form of government-sponsored lottery.
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New Jersey wants to adopt sports betting because business is off at its casinos and racetracks. As many as five of the 12 casinos in Atlantic City may close this year.
As much as $380 billion a year may be bet on sports illegally, through bookies, offshore gaming websites or other avenues, according to a report from the National Gambling Impact Study Commission. All of that wagering is unregulated and untaxed.
Sports associations, particularly the NCAA and the NFL, fear that legalization would create more incentive to fix games by bribing athletes or referees. But remember, this is already a multibillion-dollar industry. Legalization, with the regulation that states bring to gambling, would not create a new risk of the fix.
It’s time to change a federal law that permits an activity in Nevada but prohibits it in New Jersey and most other states, that effectively shelters a thriving illegal industry from regulation. That doesn’t mean states would rush to spread gambling. It just means the states, and their citizens, would have the choice.