Sports Betting in New Jersey Attracting Organized Crime

The current efforts to legalize sport betting in New Jersey are coming under criticism from a number of different groups who are worried that lack of regulation will be too attractive for organized crime to ignore.

The legislation, backed by Gov. Chris Christie’s administration and state lawmakers, will exploit a loophole in the New Jersey Casino Control Act. The act was written in the late 1970s to keep organized crime out of the newly established casinos in Atlantic City by monitoring and regulating the gambling operations.

“The whole premise was that people in New Jersey approved gambling because they had confidence the regulatory process would be in charge,” said Steven Perskie, former lawmaker and co-writer of the law. “Casinos would not have a complete free hand.”

The Professional and Amateur Sports Protection Act of 1992 bans sport betting in all but four states. Lawmakers are arguing that the ban prohibits the state of New Jersey from sanctioning the betting. In response, the state argues that sports betting would be legal if not regulated. The state filed legal papers in federal court to make it legal for private casinos and racetracks to allow betting as long as they are not regulated or licensed by the state.

The effect would be that sports betting establishments, unlike the casinos they would be in, would not need a license to operate. Operators would not need background checks via reviews of sports sites, and they would not be monitored by the state.

Opposed to the current plan, Edwin Stier, former state and federal prosecutor, said to, “If it’s unregulated, that means there is no one policing it and I can tell you Organized crime is attracted to gambling as a business. If it’s unregulated, they’ll find a way to exploit it. There seems to be a contradiction between the way we’ve approved controlling casino gambling and the way we’re talking about operating sports bookmaking.”

Federal judge Michael Shipp temporarily halted the legalized sports betting from starting on November 9. He will hear arguments beginning on November 20 about extending the ban. The NFL, NBA, MLB, NHL and NCAA have all sued the state arguing that legalizing sports betting violates the 1992 federal law.

Currently, the injunction against sports betting will expire on November 21, the leagues are seeking a preliminary injunction to keep the law from going into effect while the case is being heard. The state of New Jersey is expected to appeal the injunction if Judge Shipp grants it.

Shipp increased the bond that the leagues and the NCAA had to post, to $3.4 million, to cover the loss of revenues that Monmouth Park suffered while under the restraining order.