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Garden State Update

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Part I · Part II · Part III
It seems like we can't escape from New Jersey Gov. Chris Christie these days. He's hard to miss...and he's everywhere, isn't he? (For a moment, we even thought we saw him on the Michigan sideline last week at Northwestern...until realizing it was Wolverine HC Brady Hoke instead.) Certainly, Christie has been in the public eye a lot lately, romping as he did to re-election in the Garden State on November 5, and more than ever featured prominently on almost all of the news channels (and occasional late-night talk-show TV clips).

But the "Big Man" has not been on a winning streak lately in federal court, at least as it pertains to his quest to begin legalized, Las Vegas-style sports wagering in his state. Late last week, Christie was rebuffed in his appeal to the Third Circuit after a federal appeals court ruled in September that New Jersey does not have the right (at least not yet) to legalize sports betting.

Last year, in two extensive editorials, we outlined what was in the process of happening in New Jersey. To refresh memories, Christie and various Garden State pols had decided that they wanted in on full-scale sports betting action that could help prop up the sagging economy within the state. Then, in 2011, New Jersey voters approved a referendum to allow sports betting in hopes the state could legitimize what is currently a black market industry, tapping into billions in annual bets to produce a new source of revenue for the state budget, Atlantic City and the horse racing industry. The State Legislature then passed a law legalizing sports betting and Christie signed it in January 2012.

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Christie went so far as to begin the process of issuing sports gaming licenses and proclaimed the state would begin to accept bets at its various casinos and race tracks by last January, but knew he would encounter trouble along the way. Not that Christie wasn't prepared for his legal challenge to the 1992 Professional and Amateur Sports Protection Act, when select states (Nevada, Oregon, Delaware, and Montana) were "grandfathered" by federal law to accept sports wagers, though only in Nevada's case would it include single-game wagering; it was parlay cards only for the other states. (Indian casinos were not included.) Sparing no expense in anticipation of legal troubles, Christie hired a top-notch legal team headed by Ted Olson, the former US Solicitor General, to represent the Garden State's interests.

New Jersey's stance was straightforward: Christie's legal team would maintain that the 1992 Act violates the 10th Amendment (which allows states to regulate when the federal government doesn't) by forcing states to ban sports betting, and that the federal act "commandeers" the state's Legislature.

In court, however, Christie has been losing rounds the way George Chuvalo did in his two fights against Muhammad Ali. The pro sports leagues and the NCAA, later joined by the U.S. Justice Department, won a preliminary round late last year to have the case heard, then took the next round in February, convincing U.S. District Court Judge Michael Shipp that the federal act was in fact constitutional. Shipp would thus ban sports betting from New Jersey.

Then, in September, a federal appeals court in Philadelphia again ruled against Christie and New Jersey, siding with the NCAA, the NFL, NBA, NHL, MLB, and the U.S. Justice Department in a 2-1 ruling. Christie next challenged "en banc" to have a rehearing in front of the entire Third U.S. Circuit Court of Appeals, but was denied again late last week.

Christie thus has one and only one card left to play in this matter...the U.S. Supreme Court, a topic we will tackle next week.

Meanwhile, as New Jersey's attempt to legalize sports wagering is bogged down in federal court, northern neighbor Canada might be getting much closer to legalizing single-game betting. Bill C-290, if passed, would bring Vegas-style sports wagering to the doorstep of some American locales. In particular, existing and very glistening casinos in Windsor, Ontario (just across the Detroit River from Motown) and on the Canadian side of Niagara Falls, not far from Buffalo, would figure to benefit the most.

As opposed to most of the United States, Canada has a much more enlightened mentality about sports wagering. Though, technically, the sort of Nevada-style single-game wagering that Bill C-290 promotes is not currently legal in Canada.

Currently legal throughout the Great North, however, are provincially-run parlay cards that roughly approximate what is currently available in Delaware and Oregon (and, of course, as part of the legalized betting menu in Nevada). Known as Pro-Line in Ontario and Atlantic Canada, Mise-O-Jeu in Quebec, and Sports Action/Oddset in British Columbia, these parlay cards offer a wide gamut of sports gaming options, even expanding into the sort of extensive NFL player "props" normally seen in Las Vegas around Super Bowl time.

Sources tell us that the provinces are all turning a very nice profit within this rather-new industry. And, there is nothing taboo about the sports gaming presence in Canadian society. Which, in that regard, much approximates England, where gaming kiosks are placed on-site at English Premier League soccer stadia, rugby grounds, and cricket ovals; we've seen the parlay kiosks at Canucks games in Vancouver and at other NHL and CFL venues north of the border in the past.

Parlay wagering, however, has somewhat limited appeal, especially since the payouts do not come close to approximating the true odds. The Canadian parlay cards are among the worst such offenders, which is one reason the proponents of C-290 want to see Vegas-style sports wagering legalized as soon as possible to prevent a further drain of money headed to offshore outlets for the more popular single-game betting.

There's another motive at work for the Canadian casinos, those in Windsor and Niagara Falls, in particular, which have found it harder to attract American dollars in recent years. Post 9/11, of course, transition across the border has become more tedious, with passports now required for entry. Moreover, Caesar's Windsor, which used to draw heavily from the Detroit area, now has competition across the river, as Motown itself has opened three glistening gaming establishments, including one run by the familiar MGM Grand group. Those casinos opened as a direct response to Caesar's Windsor (owned by the province of Ontario through its Lottery and Gaming Corporation, and operated by Caesar's), a fancy resort on the riverfront overlooking the Detroit skyline and adjacent to the Canadian end of the Detroit-Windsor Tunnel. And to the Windsor interests, Vegas-style sports wagering (not available in Detroit) is the answer to attracting American money back over the border.

There are also several casinos on the Canadian side of Niagara Falls; one of those, Casino Niagara, already has a "sports book" of sorts on premises, though offering only the Pro-Line version of the parlay cards. Conversion into single-game wagering at these venues would be an easy undertaking. And while the provinces figure to take in less revenue from the casino sports books than they do with their existing parlay cards, they have endorsed C-290 as a job-stimulator, particularly in Windsor and Niagara Falls.

So, where does Bill C-290 stand?

It remains tantalizingly close to becoming law, having passed with all-party support in Ottawa in the House of Commons. But it has met a logjam in the Red Chamber (the Canadian Senate), where it has been languishing for almost 20 months. Proponents have a full-court press on the Senate, armed with support from, among others, the Canadian Chamber of Commerce and Canadian Labour Congress, while also taking a new approach with the Senate and emphasizing that passing the bill doesn't automatically have to usher in single-wager sports betting Canada-wide; rather, it can give individual provinces the power to decide. As we said, it's tantalizingly close to becoming law. Stay tuned.

  
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