Former New Jersey State Sen. Raymond Lesniak thought he had done enough for New Jersey and its casino industry.
With Congress and the Department of Justice poised to threaten the lasting legacy of his 40 years serving in the New Jersey Legislature, the man who did more than anyone to bring legal and regulated online gambling and sports betting to the state says he might have to come out of retirement and “put my legal hat back on.”
“These developments are of great concern to the State of New Jersey,” Lesniak said.
“Any time Congress gets involved in something that we’ve fought so strongly for so long to achieve for the state of New Jersey, it’s going to cause us great concern. In terms of the DOJ opinion, I’m not quite sure what it means and what its effect will be. We’ll have to wait and see. But the less the federal government interferes with our gaming and sports betting, the better it is for us. I wish they would just stay out of our business.”
The beginning of NJ online gambling
The NJ online gambling industry will eclipse $1 billion in lifetime revenue this month. Since launching in November 2013, revenues have continued to grow, reaching record-breaking numbers the past two months.
After years of decline and the closure of five of its 12 casinos, Atlantic City is experiencing a revival with the reopening of two casinos this year following the success of online gambling and sports betting.
Back in 2011, the DOJ Office of Legal Counsel issued an opinion on the scope of the Wire Act, determining that it applied only to sports betting and not other types of online gambling.
This sparked New Jersey, Nevada, Delaware, and Pennsylvania to authorize at least some forms of online gambling, and many other states to consider the possibility.
Wire Act changes will have some effect
However, a reversal of this opinion by the current DOJ would not stop the existing online gambling industry in New Jersey.
Last year when the PA legislature had concerns about the potential of a new opinion issued under the Trump Administration, Thomas A. Decker of the Coalition for a Safe and Regulated Internet, wrote a letter to the Pennsylvania General Assembly stating:
“An abrogation of the 2011 OLC Opinion would have no effect on the existing legal framework guiding the interpretation of the proper scope of the Wire Act” and that “an opinion distributed by the OLC does not bind federal courts or receive more than the type of legal deference that might be afforded a law journal article or position paper.”
If the DOJ tried to enforce the opinion, Lesniak said it would find itself in court and he would be leading the charge.
“What will the DOJ do about the opinion?” Lesniak said. “They will have to litigate, and maybe we will have to litigate. I might find myself back in court soon seeking a declaratory judgment. I thought I was retired.”
However, Lesniak does fear that an OLC ruling, no matter how unenforceable, will have a negative impact on the momentum in the NJ online casino industry.
“Just the opinion in and of itself will have a chilling effect on operations and any of our efforts to expand the compact with other states and countries,” Lesniak said.
Congress poses ‘one more obstacle’ for sports betting
Sports betting has been an immediate success story in New Jersey.
Since starting in June, a month after the US Supreme Court decision that declared the Professional and Amateur Sports Protection Act (PASPA) unconstitutional, the NJ sports betting industry has reached nearly $1 billion in handle.
The bill being introduced by Sens. Orrin Hatch and Chuck Schumer would not stop any state from offering sports betting, but the federal oversight it creates could impact the already established sports betting industry in the Garden State.
Lesniak isn’t too worried about the potential of Congress getting a law passed in these final two weeks of the session before Hatch retires. Congress doesn’t tend to move that fast, and New Jersey has its own advocates in the US Senate.
“I believe that our Congressional delegation with Sens. [Bob] Menendez and [Cory] Booker would be able to stop any incursions on our sports betting operations,” Lesniak said. “We’ve faced many obstacles. I thought we beat them all. I guess this is just one more we have to overcome.”
An unsung hero of a thriving online gambling industry
Although his name was nowhere on the final Supreme Court case of Murphy v. NCAA that upended PASPA and allowed the spread of legal and regulated sports betting in the US, Lesniak was at the forefront of an 11-year fight to bring sports betting to New Jersey.
He filed the original constitutional challenge of PASPA in 2010, put a sports betting referendum on the ballot in 2011 to show that New Jersey voters supported the issue, and got a bill passed in the legislature authorizing sports betting.
He then repealed state laws barring sports betting to potentially allow Atlantic City casinos and state racetracks to open sportsbooks without state regulation, leading to the lawsuit that eventually overturned PASPA.
Lesniak is coming out with a book, “Beating the Odds,” to be released during Super Bowl week on how legal sports betting came to be in America.
He also fought through one veto and one conditional veto from then-Gov. Chris Christie to get the NJ online gambling bill he sponsored made law.
“We don’t need this aggravation,” Lesniak said. “Our casino industry was on the verge of a knockout and now it’s coming back to life. We don’t need any restrictions on their ability to generate revenues. Cutting that off will do great damage to our state and our casinos. Everybody ought to be aware that New Jersey is not a pushover in anything.”