New Jersey is considering a bill that would establish the framework of operation and regulation for wagering at casinos and racetracks on the results of certain professional, collegiate sports, or athletic events. The Garden State has long been at the forefront of advocating for state autonomy and discretion regarding sports wagering. State legislators introduced Assembly Bill No. 3911 on May 7, 2018, in anticipation of the Supreme Court decision (Murphy v. National Collegiate Athletic Assn., No. 16-476 (May 14, 2018) ending the prohibition against states enacting legislation permitting gambling on sporting events previously contained in the Professional and Amateur Sports Protection Act of 1992 (PASPA).
New Jersey’s bill supplements and amends sections of existing New Jersey casino and gaming law.
Most significantly for the NCAA and its member institutions, however, is the legislation’s general prohibition on wagering on collegiate events that occur within the state of New Jersey or involve any New Jersey college team.
Specifically, the limitations placed on wagering on New Jersey collegiate contests or any contests involving New Jersey schools are contained in the “prohibited sports event” definition. The prohibited sports event is defined as “any single collegiate sport or athletic event that takes place in New Jersey or a single sport or athletic event in which any New Jersey college team participates regardless of where the event takes place.”
However, a “prohibited sports event” does not “include the other games of a collegiate sport or athletic tournament in which a New Jersey college team participates, nor does it include any games of a collegiate tournament that occurs outside New Jersey even though some of the individual games or events are held in New Jersey.”
Therefore, the mere participation of a New Jersey school in the NCAA or NIT tournament will not prevent gamblers from betting on tournament contests held in New Jersey involving non-New Jersey schools. Gamblers will be prevented only from placing wagers on tournament games or events involving any New Jersey-based schools.
For example, if a New Jersey school, such as St. Peter’s, Monmouth, Princeton, Rutgers, or Seton Hall, participates in the NCAA or NIT tournament, any wagers on those schools would be prohibited. However, wagers would be permitted on other tournament games involving non-New Jersey schools, even if those games take place in New Jersey. So, a regular season game involving Duke-North Carolina in the Prudential Center in Newark would always be considered a “prohibited sports event” and not subject to wagering. However, a Duke-North Carolina NCAA tournament game taking place in the same Prudential Center location would be available for wagering in New Jersey.
Practically speaking, except for tournament games, New Jersey gamblers will only be able to place wagers on regular season collegiate sporting events occurring in states other than New Jersey that do not involve New Jersey-based schools.
Regulation of sports wagering is to be overseen by the New Jersey Division of Gaming Enforcement, which will be responsible for taxation and for ensuring the integrity of sports gambling. Gross sports betting revenue will be taxed at 8 percent and online sports betting revenue will be taxed at 12.5 percent. The proposed legislation currently provides that casinos and racetracks operating a sports pool will be charged an annual “integrity fee” equal to the lesser of $7.5 million or 2.5 percent of gross revenue attributable to wagers placed on sporting events.
Under the bill, a casino or racetrack may establish a sports wagering lounge independently at the casino or racetrack, as a partnership between a casino and a racetrack, or it may authorize a casino service industry enterprise to operate a sports pool on its behalf. Wagers may be placed on any sporting event in-person in a sports wagering lounge located at a casino or racetrack, or online. Persons placing wagers must be at least 21 years of age. In order to operate a sports wagering pool, a casino or racetrack must obtain a permit from the Division of Gaming Enforcement. Permits will cost a minimum of $500,000 and will remain valid for one year. The legislation strictly prohibits gambling on all high school sports, but permits wagering on international sports events in which a majority of participants are at least 18 years of age (e.g., many Olympic sports).
It remains to be seen whether other states will follow New Jersey’s lead in creating broad based restrictions on gambling on collegiate events that occur within state borders.
Jackson Lewis will continue to monitor the progress of this New Jersey bill as well as other proposed state and federal gambling legislation. If you have any questions, please contact an attorney in the Jackson Lewis Collegiate and Professional Sports Practice Group.