New Jersey Governor Fight With the DOJ on Sports Betting Suit

23 July 2009

The U.S. Department of Justice, (in it’s infinite wisdom?), appears to be declaring war on the State of New Jersey. The DOJ has asked a U.S. District Court to block New Jersey Governor Jon Corzine from joining, and thereby lending his considerable influence to, a legal challenge seeking to lift a ban on sports betting from New Jersey and 45 other states. The DOJ claims that the Governor does not have the authority constitutionally to intervene. They also claim that the Attorney General for the State of New Jersey is the proper office to enter the proceedings.

The ruckus is over a federal lawsuit by New Jersey state senator Ray Lesniak (D) and the Interactive Media Entertainment & Gaming Association (iMEGA) and the State of New Jersey’s horse racing associations. Governor Jon Corzine has filed a motion to support Senator Lesniak’s lawsuit, which is trying to overturn the Professional and Amateur Sports Protection Act (PASPA). This act prevents any state, except Nevada, Montana, Oregon and Delaware from having state licensed and regulated sports betting.This obviously gives these four states a huge monopoly on sports betting. The State of New Jersey stands to raise $100 million in tax revenue if sports betting is allowed at it’s casinos and on-line to it’s residents. That’s a lot of reasons for the governor of New Jersey, or any state, to want to join in this lawsuit.

Joe Brennan Jr, Chairman of iMEGA states: “The Governor is the duly elected chief executive of his state, and New Jersey obviously has an interest in overturning a law which confers a huge competitive advantage to the only four states that the law (PASPA) protects for sports betting”. He further added:” The DOJ is trying to have everyone dismissed from this challenge. The DOJ cannot deny, though, that this law grants special status on this issue to only four states, and the other 46 states are deprived the opportunity to decide the issue for themselves”.

The brief by the DOJ states: “The constitutional claims that the Governor seeks to advance do not belong to him; they belong, instead, to the State of New Jersey, which has not properly sought to intervene or assert an interest in this case”.The brief also denies that the Governor has any interest in this lawsuit and does not have any interest that may be impaired by this litigation. They further claim that any interests he may have are adequately protected by the plaintive, and therefore his motion to intervene should be denied.

PASPA, signed into law in 1992 by President George H. W. Bush, gave the state legislatures one year to enact laws to legalize sports betting. According to PASPA, those that did not, assented to not legalizing sports betting in their states. State or federal governments have never been known to be able to work efficiently and effectively in short time constraints. To impose a one year deadline on states to pass legislation as important as legislation to legalize sports betting is unrealistic.

The heart of iMEGA’s suit is the 10th Amendment, which bars the federal government from imposing unwanted laws on states. It contends that this law prevents the State of New Jersey from the tax revenue generated from sports betting.

PASPA, as it’s written”, according to iMEGA Chairman Joe Brennan, “is a violation of federalism and infringes on states rights to raise revenue. It created a special class for a small number of states and deprived other states from being able to be a part of it”.

Governor Jon Corzine states: “The federal government’s prohibition on sports betting for some but not all states is fundamentally unfair. There should be uniformity in the application of federal law. If one state is allowed to legalize betting on sports events, all states should be allowed the same opportunity”.

Article I, Section 8 of The United States Constitution states that: “all Duties, Imposts and Excises shall be uniform throughout the United States”. While this is not aimed specifically at gambling laws, it seems to imply that all laws should be uniform with all states.

Article IV, Section 2 states: “The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States”. If all citizens are to be afforded the same rights and privileges, no matter what state they reside in, why are the citizens of 4 separate states afforded special grace and circumstances?

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