TRENTON, N.J. -- From March Madness brackets to Super Bowl
pools to illicit back room wagers, people bet on professional
sports games every day. But they can do it legally only in four
states, and only two states currently offer state-sanctioned sports
With Atlantic City casinos in a financial free fall and New
Jersey's budget in shambles, a state lawmaker filed a federal
lawsuit Monday against the Justice Department that seeks to
overturn a U.S. ban on sports betting. The casinos and their
political allies say letting people bet legally on sporting events
would let all 50 states in on a lucrative revenue source.
State Sen. Raymond Lesniak, D-Elizabeth, said sports betting
already exists, and will continue to whether states tax it or not.
"As Captain Renault said to Rick, 'I'm shocked -- shocked -- to
find that gambling is going on in here!'" he said, quoting from the
"Gambling is going on here, sports gambling," Lesniak said.
"Rather than supporting thousands of jobs, economic activity and
tourism, the federal ban supports offshore operators and organized
Estimates of illegal sports betting in the United States vary
widely, but range as high as $380 billion a year, according to the
National Gaming Impact Study Commission.
A consultant hired by one of the lawsuit's plaintiffs, the
Interactive Media Entertainment & Gaming Association, estimated
that sports betting could become a $10 billion-a-year industry in
New Jersey by 2011 if it were permitted in casinos, at racetracks,
online and by telephone. That could generate nearly $100 million a
year in tax revenues for the state, according to the group's CEO,
Lesniak's lawsuit, filed in U.S. District Court in Newark, seeks
to overturn the Professional and Amateur Sports Protection Act. The
1992 law restricts sports betting to the four states that met a
deadline to sign up for it: Nevada, where Las Vegas sports books
determine the odds for sporting events across the country;
Delaware; Montana; and Oregon.
The law carved out a special exemption for New Jersey, giving it
a chance to decide if it wanted legal sports betting. The state
failed to enact a law that would have done so, and the exemption
The lawsuit argues that the U.S. law is unconstitutional because
it treats four states differently than the 46 others.
It names U.S. Attorney General Eric Holder and Ralph Marra Jr.,
New Jersey's acting U.S. attorney, as defendants. A U.S. Justice
Department spokesman said the government will review the lawsuit
but declined further comment.
Professional and scholastic sports leagues vehemently oppose
legalized sports gambling, arguing that the integrity of the games
must be free of suspicion. They cite a long history of
gambling-induced scandal, from the 1919 Black Sox, who threw the
World Series at the behest of gamblers, to numerous college
Joe Browne, the National Football League's executive vice
president, said the league supports the ban and would be keeping
tabs on the lawsuit.
"We do not believe it is in our best interests to have outside
parties -- whether casinos or local governments -- using our games,
players and coaches as betting vehicles," Browne said.
Nevada allows numerous types of sports betting.
Montana allows what's going on illicitly in most other states
this month: NCAA basketball tournament pools at bars that register
with the state lottery. The state also allows betting on fantasy
Oregon ended its sports lottery, which brought in about $2.5
million a year in tax revenues, in 2007. The National Basketball
Association had sued the state over the lottery and the NCAA had
vowed not to hold any postseason games there as long as sports
betting was allowed.
Delaware is considering taking advantage of its exemption and
could have a sports betting lottery in place in time for the fall
football season. It would involve combination, or parlay, bets to
make it more difficult to win.
States across the country are turning to gambling as a new or
expanded source of money amid the economic meltdown. Proposals to
allow or expand slots or casinos are being considered in at least
14 states, tempting legislators and governors at a time when many
must decide between cutting services and raising taxes.
Atlantic City's casinos have endured months of declining
revenues. Joe Corbo, president of the Casino Association of New
Jersey, said the casinos would benefit from a modest new revenue
stream of about $50 million or so, plus secondary economic activity
at gambling tables, restaurants, spas and hotels.