New Jersey and Sports Betting – Perfect Together

Mar 14

AdministratorAtlantic City News, Atlantic City, NJ , , No Comments

[caption id="attachment_43" align="alignleft" width="300" caption="Atlantic City Racebook"]NJ Legalized Sports Betting[/caption]

New Jersey and Sports Betting – Perfect Together?

Strap in, kids.  The Mole has been off the air for a while and I have an Atlantic City opus in store here.  (By the way, did the people who came up with the tourism slogan “New Jersey and You, Perfect Together” ever pause to realize that the slogan is essentially an invitation to write your own joke about New Jersey?  Last time I looked, there were a shortage of New Jersey jokes out there.) Before I get started, let me just say that the political end of the discussion on sports betting is not what I am advocating, talking about, or anything else.  Whether you or I are for or against whatever line of thought that is out there is personal business.  Politics, of course, has to get brought up in the natural direction of this discussion.  For the record, the legislative drive to bring sports betting to New Jersey has bipartisan support; for stereotypical political reasons you might think it is solely a Democratic initiative.  The legislation was introduced by then-Rep. Jeff Van Drew, a Democrat, but Republican support was soon to follow.  That’s as overtly political as I’m going to get.  The inner workings and resulting partisanship of New Jersey state politics and (in this case) the very long and complicated discussion of the Federal and State legal interactions that are necessary for legalization of sports betting is another topic for an entirely different place on the Internet.  My concern, as it has been since the first Mole post, is tourism.  You don’t have to believe that there is a connection between legalized betting and tourism, but I assure you that one does exist.  Having got all that out in the open, let’s get started: The recent push to legalize sports betting (again, see below) is the direct result of the Borgata poker room illegal sports betting ring, dubbed “Operation High Roller”, which was publicized after an 18-month investigation when 18 people were arrested on November 14th, 2007.  Of the 18 people arrested, six were Borgata employees and four had ties to the Philadelphia mob and its jailed head, Joseph “Skinny Joey” Merlino.  The idea of legalizing sports betting in New Jersey crops up every few years, and that news cycle gets accelerated whenever New Jersey is mentioned in any form of an illegal gambling news piece.  The back-story is easy: in 1992, Congress passed The Professional and Amateur Sports Protection Act, which essentially made sports betting illegal nationwide save for Delaware, Montana, Nevada, and Oregon.  The language of the law contained a provision for a one year window for states that had regulated casinos for at least 10 years to pass a matching state law that would allow sports betting.  Said window was put into the law specifically for New Jersey, as Congress realized that Las Vegas had embraced betting in the casinos, and maybe New Jersey would be motivated to do the same?  The window closed on New Year’s Day of 1994.  The exchange of information went something like this: Congress: “Hey, New Jersey.  We carved a nice fat loophole into this law specifically for you.  Aren’t we nice?  What say you take advantage of our generosity?” New Jersey: “…blah blah blah, yadda yadda yadda, 1993 Governor’s race, Bill Bradley used to play pro basketball and he has a ton of unions contributing to his campaigns and those unions may or may not have organized crime ties, and they want to keep their undocumented cash flow, so that somehow may have something to do with our inaction but we’re not really sure, and partisan bickering… <sound of emergency room heart monitor connected to dead person> Congress: “Alrighty then, next item.” Now, with the window having been permanently closed as of 1994, the push to get sports action into the casinos not only faces political infighting and those genuinely opposed to such a thing happening, but also the tiny little problem of a Federal ban that the state had the chance to do something about and didn’t.  For reasons that are passing of my personal understanding, the taboo on sports betting in a regulated and normalized setting is so awful that New Jersey would rather let the New York Mafia, the Philadelphia Mafia, and Caribbean offshore websites handle the needs of individuals interested in betting.  With their bets, New Jersey is saying “Fuhgeddaboudit” to millions in tax revenue and further millions in ancillary revenue.  There will be more on this later, because as with anything else, it’s all about money.  And so we have a new exchange of information that should shape up something like this: New Jersey: “Hi, Congress.  We’re all about the sports betting thing now.  Did you see the stuff going on at Borgata?” Congress: (checks watch, stifles chuckle): “New Jersey, you’re about 14 years behind the play.  No go on that, sorry.  That 1994 loophole was akin to a free pass from the teacher, and you proceeded to mumble something about the dog eating your homework.” New Jersey: “We’re planning on getting a state law passed and then going to court about that pesky 1994 bit.” Congress: “You’re going to go to court in an attempt to overturn one specific section of a perfectly Constitutional piece of Federal law?” New Jersey: “That’s the plan, yes.” Congress: “Should a party be thrown for one guest if the guest was 14 years off on the date of the event?  This is not unlike that philosophical line about a tree falling in the woods.” New Jersey: “That’s a tad bit of a mischaracterization, don’t you think?” Congress: “Nope. Not really.  Good luck with that overturning the ban thing.” End result: the next time New Jersey needs something from Congress, or more specifically when someone at the state level needs the flexing of some Congressional muscle to get something done, the legislator in question is pretty likely to hear the following: “Thank you for calling the United States Congress.  To continue in English, press 1.  If you are New Jersey and you need a favor, nobody’s home.”  The above scenario is very well what may occur, unless New Jersey has a serious shift in its thinking.  One thing that I can’t get out of my head (warning: overt politics) is that New Jersey is historically pretty liberal.  Even if the southern half of the state isn’t, we down here in NJ’s Dirty South simply do not have the sheer population numbers to overcome North Jersey and its left-wing bent.  Knowing that we are as a state a pretty deep shade of political blue, you would think that the words “additional tax revenue” attached to almost anything would make our political machines in this state take a good look at whatever would generate that revenue, especially given the frequent and justified ramblings about property tax and underfunded schools, roads, etc. here.  The current occupant of the State House hasn’t been the greatest friend to the casino industry or to the tourism industry in general, but let’s think about this: all that “ancillary revenue” I said I would talk about above.  Here it is.  Let’s say sports betting in New Jersey gets the legal OK, with the usual caveats.  Chief among those caveats is that betting on in-state teams is still verboten.  So, no bets allowed on the Giants, Jets, Nets, Devils, Rutgers, etc.  Even with that roadblock in place, the illegal element is quashed but not entirely gone, because a market for their services still exists.  If that concern really does exist in the higher levels of government, and if higher levels of government happen to read The Mole, you’re welcome.  I just addressed that little problem for you.  Now, the hypothetical law would also confine legal betting to the Atlantic City casinos.  This, like buying a Hyundai, is what we call a “big duh”.  Of course sports betting belongs in the casinos; that way the state gets the oversight that it would naturally demand.  (Government oversight in New Jersey is somewhat like the sun in Las Vegas: you just can’t seem to escape it, no matter how hard you try.) There is a preciously small element of the population out there that all casinos absolutely despise: the people who walk in and walk right out without engaging in gaming.  Very few people can resist the temptation to drop a few dollars into a machine after they’ve had a good dining experience, and Atlantic City is outstanding at providing good dining experiences.  The reason I bring this up is that the prototypical sports bettor does not fit into this category.  People are going to come in, park (more revenue), place their bets (revenue), eat (revenue), drink (revenue) and possibly shop or gamble away all or part of their winnings (yet more revenue).  Add to this that New Jersey is not well-known as a friend to gaming technology.  Las Vegas recently set up a way to bet from your PDA.  The odds of that having that happen here are slim and none, and Slim just left town.  In addition, more traffic flow into the city inherently means more cars, and that equals more parking tickets.  The city and the state benefit from that alone.  Plus, people seem to be forgetting that any win on sports betting within a casino can likely be treated as gambling income and is subject to tax, just the same as if you would have hit on a slot machine.  The unrealized revenue is likely a figure in the hundreds of millions when all possible streams are considered.  As a side note, most (if not all) Boards of Directors and/or Officers of large companies have language they must abide by that guarantees that they, by virtue of holding their positions, must do their fiduciary duty to their company.  In plain English, they must do whatever will legally and reasonably make their company the largest sum of money.  Betting on sports, if executed correctly and without undue (read: Mafia) influence, is a perfectly reasonable activity.  The legal part is what’s tough.  But what is really easy is to ask why politicians in this state (of both political parties, if you think about it) aren’t doing their fiduciary duty to the financial health of the state by doing what it takes to get to this revenue that they seem to not care about.  Let’s put aside the tax idea entirely for a minute.  Out of all of this hypothetical revenue and foot traffic that would be realized from the legalization of sports betting, one overarching concept needs to be thought of more than anything: a majority of the events that garner the most betting action happen at a time of year that is extremely slow in Atlantic City.  The slogan says “Always Turned On”, and while that’s true from the power company’s perspective, even the biggest backers of our fair city will admit that from November to March, it’s rather slow around these parts.  Four of the biggest* illegal sports book events occur in that timeframe.  #1 – Super Bowl – Sure, plenty of people come into town to watch the game at a bar with friends, but picture the foot traffic and overall increase in visitors if people who wanted to bet on the game had to come into the casinos to place their bets.  Super Bowl weekend is an otherwise bright spot during some pretty slow times for the casinos.  Add to this that coming in a close second at #1A would be the AFC & NFC title games.  Those two weekends are far from big-ticket weekends in terms of casino numbers and hotel occupancies.  #2 – BCS Title Game – If something gets more action placed on it than pro football, college football has to be it.  An added bonus to the BCS (assuming this year’s spot in the schedule were to continue) would be its generation of traffic on a weekend not known for being busy – the weekend after New Year’s. #3 – March Madness – The lion’s share of the action is of course on the Final Four, but the entire 64-team tourney generates millions in bets over a period of three weeks in which Atlantic City is just starting to wake up for the season.  The weather is just starting to get nice again as the Men’s Finals dates for this year (April 5th and 7th) come around.  March Madness is big to the point that it could become Atlantic City’s new shoulder season: rather than the two weeks post-Miss America that the city used to enjoy, how about three weeks before the really good weather driven in part by sports betting and the occasional convention? #4 – World Series – This is the one event that takes place outside of my specified timeframe, but mid to late October isn’t exactly humming around here either.  There’s still some convention business and there’s still the occasional nice day to get out on the golf course, but since the demise of Miss America, the season really does trail off drastically after Labor Day.  * - Bookmakers don’t exactly publish statistics, and both the Nevada Gaming Control Board and the Las Vegas Convention and Visitors Authority were unable to help me when I called looking for detailed information.  I also Googled extensively.  Both organizations (NGCB and LVCVA) do not keep detailed betting statistics on any event other than the Super Bowl.  Nobody can say that the Mole doesn’t try, but I’ll freely admit that my top four events are a well-educated guess. So, in short, New Jersey needs sports betting, even if certain disinterested parties like the state government don’t seem to agree.  Granted, the legal hurdles are high, and the political hurdles are potentially even higher.  But, the legalization of sports betting will do a good bit to ensure that Atlantic City becomes the “regional destination” that we keep hearing about.  Politics aside, the triad of sports betting, more airline service into Atlantic City International, and the express rail line from New York are more than likely the three largest impediments to Atlantic City becoming a truly regional destination in which a majority of the traffic are not of the day-tripping automotive variety. March 2010 - Breaking News! N.J. Senate committee approves sports betting constitutional amendment vote! Read the Artice here!