Casino News

Ongoing Battle for Sports Betting in US Cost New Jersey $8.6 Million

The State of New Jersey is leading the battle for legalizing sports betting, a court case that could give every other state in the country the opportunity to allow betting on sports. As the U.S. Supreme Court is expected to issue a verdict in the Christie vs. NCAA case in the following month, it becomes clear that the legal battle may cost more than everyone thought. According to recently published invoices, the legal fees connected to the appeal have surpassed $8.6 million, a cost that was paid by New Jersey.

Former Gov. Chris Christie led the efforts for giving New Jersey the freedom to pass its own legislation regarding betting on sports. The five-year legal battle will soon come to its end, as the Supreme Court is expected to issue its ruling by June. If the Supreme Court decides to overturn the Professional and Amateur Sports Protection Act (PASPA), New Jersey’s efforts may really pay off. In a recent publication, The Observer cited figures from invoices and other official documents, according to which two law firms have charged Christie approximately $8.66 million from 2012 to 2017 to represent him in the appeal.

According to documents The Observer obtained from the state Division of Law, private law firm Gibson Dunn & Crutcher has billed the former governor over $7 million from October 2012 until November 2017. This does not include costs for December’s oral argument before the high court. The invoices show that the law firm was paid by the Division of Gaming Enforcement and the Racing Commission. Funds come from the fees paid by the gambling industry – racetracks, casinos, and more. Another law firm, called Gibbons P.C., was paid $1.5 million from December 2012 to February 2018. It represented the New Jersey Legislature, invoices from the Senate Majority Office reveal. In addition, it received $77,000 from the New Jersey Sports and Exposition Authority within several months in 2014 – 2015.

In January, Governor Phil Murphy took office and continued Christie’s legal battle, saying he supports the legalization of sports betting. He is also represented by Gibson Dunn & Crutcher, but should not keep paying the firm for a very long time, as the ruling is expected in the following weeks. While it is New Jersey that is asking the Supreme Court to overturn the federal ban on sports betting currently effective almost everywhere, many other states support legalization as they see it as potentially profitable.

Why New Jersey’s Appeal Is So Important for Everyone

There have been strong indications in the past few months that the Supreme Court would rule in favour of New Jersey. According to estimates, Americans spend around $150 billion in illegal sports bets every year. If this market becomes regulated, then everyone – from state coffers to major sports leagues, would reap the benefits. Simply put, they would receive millions or even billions of dollars in the form of taxes, licensing fees, advertising-related costs, and many, many more.

Currently, sports betting is illegal in the United States, except in Nevada, Oregon, Delaware, and Montana. But Nevada is the only state to allow all forms of sports wagers, while the three others have more limited options. In its appeal, New Jersey is challenging the PASPA on the grounds that the Act is in conflict with the Commerce Clause and the Tenth Amendment of the Constitution. It is challenging the right of the U.S. federal government to control state lawmaking.

If the Supreme Court decides that states can enact their own laws regarding sports betting, at least a dozen of states is expected to introduce legislation almost immediately. In fact, around 20 states already have proposed bills designed to control and regulate the market, once the federal ban on betting is lifted. Most experts, however, admit that if that happens, online gambling would soon follow. Indeed, legalizing sports wagering in the U.S. (even if it is only in some states) can open the door to online casinos, bingo, online poker rooms, etc. Many states have already allowed Daily Fantasy Sports (DFS) and while they may seem very different to sports betting and online gambling, experts say they would provide a pathway for legalizing more forms of gambling.