Sports betting is the hot new business in New Jersey, and many proponents, insiders and onlookers agree that business is booming, However, the state’s industry hit one of its first stumbling blocks: A ban on wagering on New Jersey collegiate sports.
Earlier this week, the Division of Gaming Enforcement, the agency which regulates sports betting and gambling in the state, levied a $10,000 fine against online sportsbook PokerStars for accepting illegal wagers last year.
PokerStars accepted 216 wagers totaling just over $2,700 for the Nov. 19 game between the Rutgers University men’s basketball team against Eastern Michigan University. The company also took an illegal bet on a Dec. 31 college basketball match up between Monmouth University and the University of Pennsylvania.
Smaller fines were levied last year against Caesars Entertainment Corp., Golden Nugget Atlantic City and Resorts Casino Hotel, all for accepting wagers on collegiate sports involving Rutgers teams.
Current law bars any sportsbook doing business in the state from accepting wagers at its New Jersey sites on university games involving a New Jersey college sports team, as well as any collegiate sports games taking place in the state.
“I did not want to preclude betting on New Jersey college games or college games played in New Jersey, but I got pushback from some of my colleagues on that issue so I compromised,” former state Sen. Ray Lesniak said in a statement to NJBIZ. “I didn’t want it to jeopardize the bigger issue of amending the New Jersey Constitution to permit sports betting.”
As a senator, Lesniak played a key role in crafting much of the legislation legalizing sports betting in the state, as well as the landmark May 2018 U.S. Supreme Court decision striking down the sports-wagering ban on all but a few states.
The agreement to ban most forms of collegiate sports betting in New Jersey was part of the deal Lesniak and other lawmakers struck allowing a constitutional amendment to go before voters as a ballot question in 2011.
Voters approved the ballot by a “two to one,” very slim margin, said DGE Director David Rebuck.
“The ban… is in the constitution as part of the constitutional referendum that was passed in 2011 that allowed us to challenge the feds,” Rebuck said.
And so the clean-up bill, which is typical with any landmark legislation would be complicated, according to Rebuck. The state Legislature would have to approve putting any constitutional amendment before voters as a ballot referendum, where it could still be voted down.
“I think over time as the state gets a better sense of the safeguards that are built into sports-wagering and we have a little experience under our belt and people have a better understanding of how we do things, maybe it’s something that the Legislature will want to take up again,” Rebuck added.
New Jersey formally rolled out sports betting in mid-June. Gov. Phil Murphy, to celebrate, placed the state’s first legal bet while at the Monmouth Park Racetrack – a losing bet nonetheless – on Germany for the World Cup.
In the following 10 months, patrons bet over $2 billion at New Jersey’s sportsbooks—most of it via online and mobile apps. Granted, patrons have still bet hundreds of millions of dollars at the state’s brick and mortar racetracks and casinos.
Murphy, at the New Betting on Sports America Conference in Secaucus late Wednesday morning, touted this massive industry and the benefits for New Jersey in the years to come, including the tens of thousands of job opportunities and the ensuing ancillary economy.
“Nationwide, we are in the early days of what is estimated to become a multi-billion-dollar market – and that’s just the revenue that sports betting operators will earn from hundreds of billions of dollars in bets,” Murphy said.
“My vision is for New Jersey to continue to lead the way, and to be both the intellectual and technical capital of online sports wagering in the United States – the place where new technologies are built and proven, and the place that other states emulate in creating a regulatory structure that enables the marketplace to thrive,” Murphy added.
But the governor had little to say on the collegiate sports-wagering ban.
“First time it’s been raised,” Murphy said when asked. “Honestly, I haven’t given it any thought. Something I’d be willing to look at, but have not given it any consideration.”
“We generally don’t comment on regulatory matters like these, but we had a manual gating error from our international games into New Jersey. We cooperated with the DGE as we always do, have learned from the problem, and are confident it won’t reoccur,” reads a Monday statement from Matt Primeaux, senior vice president for Strategy & Operations, USA at The Stars Group, parent company of PokerStars.
“We’re glad to have had a successful NCAA basketball season with our players enjoying our home of the underdog campaigns that saw us put out the best odds in the market for all underdogs,” he added.