Legal sports betting in New Jersey has been attempted four times, with the most recent attempt coming in 2018. Despite this, the nation’s sixth-largest state still doesn’t have a regulated marketplace for wagering on sporting events.
The latest proposal, which we’ll discuss in detail, was submitted last September by state Senator Bob Graham and would have allowed for sports bets up to 7 percent of the odds on a game. This proposal would have also legalized fantasy sports and weekly sports mail-order clubs. But it would have also required all sportsbooks to be licensed by the state.
The other three attempts at legal sports betting in New Jersey were made in the early 20th century. The second of these attempts, which was submitted in 1913, would have only allowed for pari-mutuel wagering at horse races. But this proposal failed to pass and was effectively nullified by the Professional Basketball League of America, which arrived in New Jersey in 1915.
The third attempt at legal sports betting was made in 1932, with the aim of allowing bets on professional baseball games. A year later, the state legislature passed a law that essentially legalized sports betting, but with a catch: only college and amateur games were allowed to be bet on. The law also stated that all sportsbooks had to be registered with the state.
This system, which was in place until 1964, when the federal Wagering on Sports Act was passed, worked reasonably well for a time. But it didn’t take long for unscrupulous operators to realize that they could exploit the system by placing illegal wagers or offering illegal services to New Jerseyans. The situation eventually reached a breaking point in 1974 when the New Jersey State Police reported a 450% increase in illegal gambling-related arrests.
In response to this, the New Jersey Legislature passed a law, signed by then-Governor Cahill, effectively banning illegal wagering in 1975. While this law initially affected mostly illegal sportsbooks, it also applied to online and mobile gambling, as well. The law made it illegal for foreign-based businesses to operate in the state, effectively shutting out offshore gambling operators like SportsBetting.com, which is based in Curacao.
The ban remained in place until 2013, when New Jersey became the first state in America to legalize online sports betting. The law, which became effective on October 30th, 2013, allowed for state-licensed online sportsbooks to exist and gave existing offshore sportsbooks the option of becoming New Jersey-licensed. It also gave existing domestic sportsbooks the option, upon applying for a New Jersey gaming license, to have that license considered for offshore licensure.
Why Did New Jersey Try to Legalize Sports Betting?
New Jersey, like most states, makes a lot of money from sports betting. In fact, some estimates put the amount of revenue between New Jersey and Los Angeles, the two biggest states in terms of economic impact, at nearly $14 billion annually.
This isn’t just from gambling. The New Jersey Sports Wagering Center, a government entity, estimates that there are 4.3 million active sports bettors in New Jersey alone, generating $65.7 million annually in wagering revenue.
So it’s not surprising that the state would want to explore the potential for legal sports betting. What is surprising is that New Jersey, despite being the most populous state in the country, still doesn’t have a regulated sports betting market. In other words, you as a New Jersey resident still need to go to another state to place a bet on a sporting event.
This is in spite of the fact that the legalization of sports betting has become commonplace throughout the country. Twenty-three states and the District of Columbia now allow for legal sports betting, while another 16 states allow for some form of fantasy sports. Only two states (West Virginia and Louisiana) actually outlaw all forms of legal sports betting.
One of the major factors behind New Jersey’s slow walk toward legal sports betting is the prohibitively expensive process of obtaining a license from the state. To place a bet in another state, you must:
- Get a physical address
- Pay a fee
- Maintain at least one of its branches there (most states require physical locations in multiple states)
- Have the proper license and register with the state
- Maintain proper documentation
- Comply with state and federal tax laws
If you’re located in New Jersey but want to place a bet in another state, you need to go through all of these steps. But if you’re in another state and want to place a bet in New Jersey, there’s no need to go through the process. This complexity, as well as the fact that it can be outright difficult to obtain a license in some cases, has contributed to the relatively small size of the New Jersey sports betting market, as compared to other states with similar licensing structures. In addition, the state constitution bars New Jersey from entering into a contract with a foreign business. This rule, put in place after the World War II, prevents the state from entering into agreements with offshore gambling operators, which is what most sports betting operators are. This has effectively shut out foreign companies from operating on New Jersey soil, although the state does allow for licensed overseas operators who set up shop in other states. This makes it more difficult for New Jersey residents to place bets on sporting events, because even if they want to, they can’t without breaking the law.
The situation is similar for fantasy sports. If you want to engage in fantasy sports in New Jersey you need to get a federal law, known as the Hatch Act, passed which would allow for the formation of fantasy leagues in the state. To date, this hasn’t happened. In other words, you can’t form a fantasy basketball team in New Jersey, you can only participate in existing leagues in other states where fantasy sports are officially allowed.
Given the number of states that now allow for legal sports betting and fantasy sports in New Jersey, it’s clear that the legislative and administrative processes there need to change. In particular, the state should consider reducing the number of hoops that New Jersey residents have to jump through in order to engage in legally sanctioned sports wagering. This could potentially bring in a lot of new revenue and make a significant dent in the state’s coffers. At the very least, it could bring in a larger share of the revenue that currently is generated from sports betting.
What Is The Current Proposal For Legalizing Sports Betting In New Jersey?
Last September, state Senator Bob Graham, who is currently New Jersey’s senior senator and the chair of the Governmental Operations Committee, submitted a bill that would have effectively legalized sports betting in the state. The bill, dubbed the Responsible Gaming Amendment, would have allowed for adults in New Jersey to make wagers on sporting events. According to Graham’s office, the goal of the proposal is to bring in more revenue for the state and allow for greater consumer choice.
The bill would have allowed for adults in New Jersey to make sports wagers at casinos, racetracks and off-track betting facilities. You would have also been able to make wagers online at any website that is regulated by the states where it is operating. The proposal also would have allowed for weekly fantasy sports contests and offered refunds on winning tickets. Finally, it would have also permitted certain pari-mutuel wagering at horse racing tracks, although it didn’t specify how that would work exactly.
What Are The Differences Between This Proposal And The Other Attempts At Legalizing Sports Betting In New Jersey?
The Responsible Gaming Amendment is the most recent attempt at legalizing sports betting in New Jersey. The prior three attempts were made in the early 20th century and didn’t achieve the same level of support. What is different this time is that Graham has the backing of a number of influential individuals and organizations, including the American Gaming Association, the National Football League, the National Basketball Association and the Major League Baseball Players Association. These groups, along with Graham, believe that legalizing sports betting will help to generate more revenue and create more choice for consumers.
What isn’t different is that Graham still needs to get the bill passed by the state legislature. Since 2013, when online sports betting was legalized in New Jersey, the state has tried and failed to pass a law that would effectively legitimize this type of activity. For this reason, the Responsible Gaming Amendment, like its predecessors, is at risk of never becoming a law.