According to a recently published Associated Press article, New Jersey State Sen. Raymond Lesniak (D-Union) has filed a lawsuit against the federal government, specifically the U.S. Justice Department, seeking to overturn a U.S. ban on sports betting.
The suit hopes to overturn the 1992 Professional and Amateur Sports Protection Act, which has the support of professional and scholastic sports leagues that argue the integrity of athletic competition would be compromised without it. Lesniak’s contention is that sports gambling already exists and always has, that the federal law deprives N.J. of a potential $100 million in lost annual tax revenues, and that its casinos, racetracks and Internet operators are deprived of a potential $500 million in gross income. A 1999 study estimated that $380 billion is illegally wagered annually on sports betting throughout the country.
Lesniak’s suit was filed in a U.S. District Court in New Jersey, on behalf of the Interactive Media Entertainment & Gaming Association, the New Jersey Thoroughbred Horsemen’s Association, the Thoroughbred Breeders Association of New Jersey, and the Standardbred Breeder & Owners Association of New Jersey.

Gaming analyst Joseph Weinert, a senior vice president with casino consulting firm Spectrum Gaming Group, implied in a statement that Lesniak’s revenue forecast is greatly overestimated. For New Jersey to generate $100 million in cash from state taxes, sports betting revenue across the state would have to top $1.2 billion, which Weinert said is highly unlikely.
In a related Reuters’ article, N.J. Gov. Jon Corzine told reporters that the initiative to legalize sports betting was “worth pursuing” and would boost Atlantic City if it happened. However, the governor also said he expected a court challenge to the federal law would take years to resolve, and said it would be better for all involved if Congress revisited the issue.
Three times in the past five years, the N.J. Assembly passed legislation authorizing a referendum to gauge the public’s appetite for sports betting. Each time, the N.J. Senate declined to take up the cause. State Senate President Richard Codey (D-Essex) has opposed changing New Jersey’s law as long as the federal ban is in place.
Currently there are two states in the U.S. — Nevada and Montana — that allow sports betting, and two others — Oregon and Delaware —that have the option to legalize it based on having signed up to meet a deadline (or a “grandfather clause”) prior to the 1992 law. If sports betting is enacted in Delaware — as is being strongly considered — it would be yet another blow to Atlantic City’s casinos, which are in the third year of a severe slowdown in generated revenue. Last month, the city’s 11 casinos realized a 19.2 percent decline in revenue over the same period last year, which is the biggest drop since wagering came to the resort in 1978.

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