Gaming industry prepares for legalization ahead of Supreme Court decision

BY Brenda Flanagan, Senior Correspondent |

Gamblers could take their pick — place their bets on sports games inside Atlantic City’s seven current and two pending casinos, or at New Jersey racetracks, or online if the U.S. Supreme Court strikes down the 25-year ban on sports betting outside Nevada.

Some Atlantic City tourists on the boardwalk are optimistic about the effects of legal sports betting.

“Because you went from 12 to seven casinos, and Atlantic City could probably could use the additional revenue and the additional attraction,” said tourist Gene Graney.

“If it generates revenue for the state, it generates jobs, and it’s regulated well, then fine,” said Hamilton resident, Andy Kienzle.

“If in fact it is approved, then I think it is a great amenity for all the casinos in Atlantic City, bringing more guests and hopefully getting them to stay longer, which is really important for all of us,” said Joe Jingoli, a partner in the Hard Rock casino deal.

The Hard Rock Hotel and Casino in Atlantic City, which got its official New Jersey casino license Wednesday, say there’s a space already reserved for a sports betting lounge, its COO told us. Ditto at Ocean Resort Casino Hotel, according to the Press of Atlantic City. It’s a waiting game.

“I think we have to wait for the Supreme Court decision. Obviously, once that occurs then the State of New Jersey needs to determine what direction it want to move, as far as sports betting,” said Hard Rock International Chairman Jim Allen.

For racetracks, sports betting revenues could boost purses and help rescue the struggling industry. The online business could include fantasy sports giant DraftKings, which said it “has naturally had discussions with potential land-based casino partners as required under the state’s online gaming regulations.”

As for New Jersey’s sports betting rules and regulations.

“We still have to wait for the Supreme Court. So not until they speak will we really have a final version of the legislation,” said Assemblyman John Burzichelli. “If the ruling comes in New Jersey’s favor, the Legislature will move rapidly to put in place the necessary framework.”

Burzichelli’s current bill, as drafted, would tax gross revenues from casinos and racetracks at 8 percent, and online revenue at 12.5 percent. One study estimated a 9 percent tax could generate $170 million for the state. The problem? After vigorously fighting any expansion of sports betting beyond Nevada, major league sports now want a cut of the betting bonanza, an “integrity fee” of 1 percent.

“I didn’t realize that they had a concern about their game not having integrity. That suddenly they had to reach in to taxpayers to underwrite their already billion dollar operation. So the answer would be, me speaking as just one legislator, I have no interest in their being paid anything,” said Burzichelli.

The NBA stated, “our games would serve as the foundation for legalized sports betting, providing casinos the
ability to earn revenues off our games while we bear all the risk, and would incur additional expenses for compliance and enforcement.”

The American Gaming Association partially agrees.

“The integrity of the game is of utmost importance, not just to the sports leagues and the athletes competing in them, but also the gaming operators. At the end of the day, we have as much to lose, if not more, if there’s an issue with the integrity of the game that we are taking wagers on as they do,” said Casey Clark, vice president of strategic communications for the American Gaming Association.

Burzichelli’s bill states no bets could be placed on college sports in New Jersey or on away games with Jersey teams.

New Jersey’s spent almost $9 million on legal fees fighting for sports betting. It’s a lot of money, but could pay off big. The Supreme Court’s expected to rule in a few weeks.