Having missed the boat in 1992, when New Jersey failed to pass legislation allowing sports betting within the one year deadline set by the Professional and Amateur Sports Protection Act (PASPA), the state has now initiated a federal lawsuit aimed at lifting the sports betting ban that applies to all states except Nevada, Delaware, Montana and Oregon. Last Friday the New Jersey Governor, Jon Corzine, said he would support the legal battle started by Sen Ray Lesniak in March.

The lawsuit claims that the PASPA ban discriminates against New Jersey and the other 45 states and is fundamentally unfair. Last month neighbouring Delaware took up its option to allow sports betting, posing an additional threat to New Jersey’s beleaguered casino market. Corzine considers that both the casino and horse racing industries in his state will be adversely affected, and has stated that New Jersey cannot afford to sit back and allow an unfair advantage to prevail, particularly during a global economic crisis.

It is precisely the global economic crisis and spiralling budget deficits that have led Delaware to change its mind about sports betting. Pennsylvania, which at present is still seeing increasing returns on its slots revenue, is nevertheless considering the addition of table games at its venues, prompted by Delaware’s decision to offer table games soon. The Atlantic City casinos, after a 30-year regional monopoly, are already suffering from the loss of gamblers to Pennsylvania’s slots facilities.

The New Jersey Casino Control Commission reported a 16.2% drop in first quarter revenue from the first quarter of 2008. Non-gambling revenue in Atlantic City accounts for 20% of total casino revenue, unlike Nevada where it is around 60%. Casino and condominium projects in the city have stalled although construction on the US$2 billion Revel Entertainment development continues. If the PASPA ban can be overturned, New Jersey would seek to licence sports betting at the casinos, racetracks and OTB establishments, as well as by telephone and online. (E-06.08.09)

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