NJ Law Makes It Illegal For College Athletes To Partner With Gambling Companies

Written By Derek Helling on September 15, 2020 - Last Updated on October 23, 2020
nj college athletes law

It hasn’t taken effect yet, but if/when it does, a New Jersey college athletes law would make it a violation for such athletes in the Garden State to partner with gambling companies. It’s the latest chapter in the ongoing struggle for commercial and labor rights in college athletics.

NJ joins four other states that already have pending laws on this matter. It’s the first to explicitly include this kind of prohibition, however.

The details on the New Jersey college athletes law

The main purpose of the law is to afford college athletes in the Garden State protection from NCAA bylaws that restrict their ability to profit off the use of their names, images and likenesses (NILs) and maintain their eligibility to compete in sports. It also tries to afford them the freedom to hire professional representation.

Current NCAA bylaws penalize athletes and the member institutions they play for if the athletes hire agents and/or receive compensation for such usage. Right now, the tenets of the law will take effect on the fifth academic year following enactment.

The law essentially makes it illegal for NJ colleges and universities to belong to any organization that restricts such rights for athletes. It also has some restrictions for athletes, including on gambling and sports betting.

New Jersey law and college sports

First, athletes have to disclose the details of such deals to the institutions they work for. The law also restricts what kinds of companies athletes can partner with. Most of the excluded companies are of the “sin” variety, such as adult entertainment studios and alcohol manufacturers.

When this law takes effect, New Jersey athletes won’t be able to sign endorsement deals with casinos. By the same token, they will be in violation of state law if they agree to let a sportsbook use their NILs for promotional purposes in exchange for money.

This goes in line with an already well-known NJ sports betting rule. There is no betting allowed on NJ college sports, nor is there betting allowed on any collegiate event held within state lines, regardless of the teams involved.

College athletes in NJ will be the only people who face such restrictions, however. Employees of NJ colleges such as Rutgers will not face such restrictions codified into state law.

While NJ law on this matter is settled for now, the question becomes whether it will ever actually take effect. Preemption at the federal level is a possibility.

Why the state may never actually enforce this law

NCAA-member institutions such as Rutgers have been pressing Congress for a national standard on this subject.

As a matter of fact, a Senate committee held a hearing on this exact matter on Tuesday, mere hours after Murphy signed the law. In that hearing, members were hesitant to get involved in “crafting or enforcing rules around compensation.”

It’s uncertain when or even if that will become reality. The timing of such a move is a crucial matter in terms of the possible effect on the NJ law.

If Congress passes a law that differs from NJ’s in any way between now and the start of the fifth academic year, the language in that federal law could supersede any part or all of this law. To negate this specific tenet of the NJ law, the federal law would have to explicitly authorize athletes’ endorsement of gambling companies.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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