The Mouthpiece


By Martin Owens
Contributing Editor


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    Martin Owens

    Persistence: New Jersey Tackles I-gaming and Sports Bets, Too

    Try try again...

    "If need be , fall down seven times. But stand up again, the eighth time."
    Japanese Proverb


    Philadelphia, PA (Sports Network) - People are fond, these days, of repeating Albert Einstein's definition of insanity: expecting different results from repeated identical procedures. Nobody would quote Einstein, of course, if he wasn't certified as a genius. But few people remember his commentary in that direction: "It's not that I'm so smart, I just stay with the problem longer."

    And in the realm of gambling law, New Jersey seems to be an experiment in Einsteinian persistence. Over the years, there have been a number of attempts to legalize Internet gaming in the Garden State. None has worked so far. There were many reasons, many obstacles: land-based casino opposition; the need to guard public morals (advertised as an endangered species in Jersey); and the fact that in good times, the extra revenue was not needed.

    But time and chance happeneth to them all. The economy went south with a vengeance, so that even some Atlantic City casinos went bankrupt, and the rest (the phrase "death spiral" has been used) started looking for new ways to bring people in, even if it was over the Internet. State governments, looking at deficits across the board, are now downplaying moral indignation in favor of creative revenue generation. And while supporting wicked gambling may create problems for a politician, supporting new taxes is liable to cost him his job these days.

    Which is why there is increasing support from all the Jersey gaming stakeholders- casinos, tracks and lottery - to legalize Internet gambling. The alternative is to do what they're already doing - fighting each other tooth and nail for a dwindling gambling market. It ain't pretty, and more to the point, it isn't working. Legalizing Internet gambling is the only thing that even resembles a winning play - it will increase revenue to the state and to the gaming venues, too.

    This means the initiative to allow Internet gaming in New Jersey has a good chance to pass. After all, even the UIGEA acknowledges that state governments have a specific right to legalize and license Internet gambling inside their borders (acknowledges but does not grant: that right is specified under Article Ten of the Bill of Rights).

    Sports Gambling too?

    New Jersey's Internet gaming initiative, however, is running as an entry with what will be a truly revolutionary development in American gambling law if it comes off: a proposal to legalize sports betting within the state.

    Supposedly, only four US states are allowed any kind of gambling that involves sporting events. Bookmakers can operate legally in Nevada, and other, more limited forms of gaming, mostly centered on the state lottery, are allowed in Montana, Delaware, and Oregon. These four were "grandfathered" when the Professional and Amateur Sports Protection Act (PASPA) became law in 1992.

    Like many American gambling laws, PASPA is based on faulty assumptions (evil gambling is corrupting the pure heart of sports - you know, victims like poor Barry Bonds), and it allows Congress to impose unconstitutional limits on the powers of state governments. Even worse, it raises the NCAA, NBA, NFL, MLB etc., to the same legal status as state governments themselves, by allowing them to sue states that attempt to license sports betting. This statute manages to violate both the 10th and 11th Amendments of the Bill of Rights in one smooth motion. Anyone who thinks our lawmakers are habitually incompetent would do well to study this law. When they want to go after our rights and liberties, they're dead shots, quick on the draw.

    But in the way that it grants exemptions, PASPA is truly preposterous. To take this law at face value, you would have to believe that betting on the Super Bowl in the virtuous and upstanding city of Las Vegas is a wholesome and worthy pursuit. Whereas that same wager, placed in such hives of scum and villainy as Secaucus, Salt Lake City or Seattle, is a piece of low crime, a scurrilous and underhanded threat to our way of life. Montana's citizens can be trusted with a handicap sheet and five dollars of their own money, but not those of Minnesota; Oregon's, but not Ohio's; the residents of Dover, Delaware, but not of Dallas, Texas. If the residents of 46 states need to be so closely supervised in their mere amusements, one cannot help but ask: is it wise to let them vote?

    And like Popeye the Sailor, New Jersey State Senator Lesniak has had all he can stand, he can't stand no more. He has thrown down the gauntlet to PASPA and the interfering Feds: The second part of that state constitutional initiative allows the State of New Jersey to offer sports betting, PASPA be damned.

    Nor is this the forlorn hope, the Voice in the Wilderness which it may seem at first. This is not the first time state governments have stood up to Federal overreaching. Fourteen states have legalized the possession and use of marijuana to their residents for medicinal purposes, notwithstanding the fact that the weed is Class I (under Federal law, that means it has no legitimate medical use; by comparison, Uncle Sam believes that Class II vitamins such as cocaine, morphine, opium, and methamphetamine have healing properties and may be dispensed under supervision).

    Showdown... or not?

    The point is, Washington has shied away from a direct confrontation on this subject of wacky terbaccy ; it is too politically sensitive, notwithstanding the open violation of Federal laws and guidelines. But weed is officially held to be a "gateway drug": accept this and you open the door to cocaine, heroin, LSD and probably Art Nouveau and race mixing into the bargain. What dark "gateways" are opened by poker, craps, blackjack? The circumstantial evidence here would seem to be even more compelling- get someone used to playing on a slot machine, and you can sell him a mortgage he can never afford- what the hell, the odds are about the same. Compared to a Wall street credit-default swap, a nine-horse parley is a model of transparency and clarity (and with the horse betting scheme, you get your results the same day: there are people still waiting for the other shoe to drop, in the high Himalayas of finance they were enticed to invest in).

    The tradition of popular feeling against gambling runs old and deep in American society- almost as deep as its popularity. Like any other prejudice, the anti-gambling impulse defies progress, facts, the loosening of 18th century social strictures, and old-fashioned common sense. Nevertheless, it will not do to underestimate the power of the opposition. A round denunciation of the evils of gambling is the lowest common denominator of public virtue in the USA. No matter how crooked, incompetent, perverted, arrogant, or just plain 30-degrees-off-the-vertical your public servant may happen to be, fulminating against Wicked Gambling is a guaranteed vote-getter in many a state or congressional district, particularly in the conservative South and West. Yes, there is an increasing population of Hispanic voters there; the point is, they don't vote; many of them can't. The mean old ladies, on the other hand, can and do. Repeatedly.

    But it seems that the forces of reaction, for one reason or another, are outnumbered, or at least muted, in New Jersey . So let us suppose that the citizens of the Garden State vote to allow bets on gambling events within their own state borders. What price?

    Will the Feds file an injunction? Will they , as with Acapulco Gold and Maui Wowee, politely look the other way, apart from a few token raids? (Here's an additional wrinkle : while the Feds can raid on their own authority under the drug laws, in the matter of gambling they are confined by state laws. In plain English, if there's no violation of underlying state laws, federal anti-gambling laws cannot be invoked!)

    But here I back off and desist. Voters, like juries, are legally entitled to do damn near anything. And often do.

    This is going to be interesting. Stay tuned.

    Mr. Owens is a California attorney specializing in the law of Internet and interactive gaming since 1998. Co-author of INTERNET GAMING LAW with Professor Nelson Rose,( Mary Ann Liebert Publishers , 2nd ed 2009) ; Associate Editor , Gaming Law Review & Economics; Contributing Editor, TSN. Com Comments and inquiries welcome at to mowens@trade-attorney.com.

    Copyright 2010


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