NJ sports betting law and regulations
NJ sports betting became legal with a signature from Gov. Phil Murphy on June 11, 2018. Emergency regulations were published that same Wednesday, and the first sportsbook opened at 10:30 a.m. that Thursday.
Here’s the basic legal and regulatory framework for NJ sports betting:
- Allows sports betting to be conducted at NJ casinos and racetracks
- Authorizes both land-based (currently live) and mobile/internet wagering (starting July 11)
- Approves wagering on all professional sports and most collegiate events
- Sets the structure for licensing fees
- Casino license: ≥ $200,000
- Internet gaming permit: ≥ $400,000 (renewal: ≥ 250,000; Responsible Gaming Fee: $250,000)
- Sports wagering license: $100,000 (renewal: ≥ $100,000)
- Casino Control Fund retainer: $250,000
- Taxes revenue at separate rates for casinos and racetracks, and for in-person and online wagering
- Casinos: 8.5 percent for in-person; 13 percent for online
- Tracks: 8.5 percent for in-person; 14.25 percent for online
History of NJ Sports Betting
How did legal sports betting in New Jersey come to be?
It was a decade of court battles that culminated in the May 14, 2018, US Supreme Court ruling that declared the Professional and Amateur Sports Protection Act (PASPA) unconstitutional. Here is a condensed timeline of NJ sports betting history:
2020: COVID-19 pandemic stalls sports betting; pro sports put on hold
In March 2020, New Jersey shut its doors and went into full lockdown as the coronavirus pandemic began taking its toll. It wasn’t long before all the pro sports leagues shuttered their seasons or postponed their games. The end result is that New Jersey sports betting almost shut its doors, too. With MLB, NHL and NBA on hold, bets declined nearly 90% in April.
Atlantic City casinos were not spared and shut their doors officially on March 16.
2019-20: New Jersey becomes the new hub for sports betting
After less than a year of service, New Jersey passed Nevada to become the top state for sports betting in the country. The Garden State accomplished the feat by surpassing the Silver State for both handle and revenue in May 2019, eleven months after sports betting began on the East Coast.
New Jersey managed to accrue $318.9 million in bets during the month, which beat Nevada’s $317.3 million. However, the new hub for sports betting racked up $15.5 million in revenue, which smashed Nevada’s take by nearly $4 million.
The two states have stayed neck and neck with each other since then. New Jersey has had several months where its handle has swelled above $400 million.
In fact, by the end of 2019, New Jersey sports bettors had placed nearly $6 billion in wagers in New Jersey sportsbooks since sports betting began in June 2018. The sportsbooks realized just under $400 million in revenue from that activity in the same period.
Perhaps the most amazing aspect of New Jersey’s rapid ascent and maturation has been the percentage of wagers made online. Since its debut in August 2018, online betting has come to represent the vast majority of the market.
According to recent figures, online sports betting revenue at New Jersey’s top performers have even begun exceeding the revenue from entire Atlantic City casinos. So, it’s hard to imagine declaring New Jersey sports betting anything but a wild success.
2017-2018: SCOTUS rules; NJ launches sports betting
In January 2017, the US Supreme Court asks acting Solicitor General Jeffrey Wall to file a brief in the NJ sports betting case. Wall weighs in on the state’s bid for appeal in May, advising the court to take a pass.
SCOTUS follows that advice about 80 percent of the time, but it does not do so in this instance. In June, the court agrees to hear one hour of oral arguments from the two sides.
On Dec. 4, the stakeholders head to Washington, D.C. to offer testimony before the highest court in the land. Most experts and pundits in attendance suggest that the proceedings go very favorably for the state.
On May 14, 2018, Justice Samuel Alito releases the majority opinion in the updated Murphy vs. NCAA. New Jersey wins 6-3, and a broad repeal of PASPA paves the way for state-based regulation. Finally — finally — the issue meets its ultimate legal outcome at the federal level.
The state puts the final pieces in place quickly thereafter. Lawmakers in both chambers unanimously pass a new bill on June 7, and Gov. Phil Murphy signs it into law on June 11. Two days later, the DGE publishes a set of emergency regulations to get the industry off the ground.
NJ sports betting goes live on Thursday, June 14 just after 10:30 a.m. The governor places the first two bets at Monmouth Park — $20 each on Germany (7/2) and the New Jersey Devils (40/1) futures.
2014-2016: Christie vs. NCAA II
After striking out in its first attempt to legalize sports betting, New Jersey switches stances for a second at-bat in 2014.
Gov. Chris Christie issues an order that lifts the state’s own ban on sports betting in September. Repealing a prohibition, he argues, is different than passing a new law (and would not violate PASPA). On Oct. 17, the governor signs a bill that makes his position official.
The bill is an updated version of the Sports Wagering Act from Sen. Ray Lesniak. It moves to allow the state’s casinos and racetracks to offer sports betting, but without any regulatory oversight from the state. NJ sports betting even gets a launch date. Monmouth Park plans to open the first NJ sportsbook on October 26.
The NFL, NBA, MLB, NHL and NCAA file for an injunction, however, asserting that sports betting outside of Nevada would cause irreparable harm to their brands and businesses. “The leagues” argue that the legal distinction Christie is trying to make is invalid. Courts had already ruled, on several occasions, that NJ could not allow sports betting.
The US District Court grants a temporary injunction on Oct. 24 — just two days before launch. A week later, Judge Michael Shipp turns his temporary order into a permanent injunction, granting final summary judgment in favor of the leagues. His ruling once again affirms that PASPA is constitutional and supersedes state law.
New Jersey appeals (again) in March 2015 and the parties present arguments before the Third Circuit Court of Appeals in Philadelphia once more. The state contends that its new law is in line with the previous rulings in the first round of litigation. Another ruling, however, sides with the leagues by the same 2-1 vote.
The state appeals (yet again), this time asking an en banc panel to rehear the case. In a rare move, the court agrees to do so in February 2016. The end result is the same, though, as nine of the 12 judges side with the leagues. Again.
Having exhausted all other legal avenues, NJ appeals to the US Supreme Court for a second time. To the surprise of many, SCOTUS agrees to hear the case.
2012-2014: Christie vs. NCAA I
The situation escalates as the calendar rolls over to 2012.
On Jan. 9, the NJ legislature passes the Sports Wagering Act, penned by Sen. Ray Lesniak. Gov. Chris Christie signs the bill into law eight days later, and sports betting is officially on the books in NJ.
Not so fast, say the sports leagues.
The National Collegiate Athletic Association (NCAA), Major League Baseball (MLB), National Football League (NFL), National Basketball Association (NBA), and National Hockey League (NHL) file suit against Christie and other state officials in an attempt to block the establishment of NJ sports betting.
Their complaint, filed in US District Court, argues that NJ-regulated sports betting would violate federal law — namely, PASPA. The state, on the other hand, contends that PASPA is unconstitutional under core principles of anti-commandeering.
In February 2013, Judge Michael Shipp upholds PASPA, ruling in favor of the leagues and striking down the Sports Wagering Act. It’s the first of many, many losses for the state.
Christie appeals to the Third Circuit in September with the same result. Two of three appellate judges vote to uphold the lower ruling. The state then tries with the US Supreme Court, which declines to even hear the case.
Something interesting emerges within the proceedings, however. The state takes the position that, while it can not regulate sports betting, it can remove its own prohibitions — essentially decriminalizing the activity altogether.
That understanding sets the stage for a second, more ferocious battle between the state and the sports leagues.
2009-2011: Setting the stage for NJ sports betting
Beginning in 2009, longtime Sen. Ray Lesniak formulates a plan to sue the federal government and challenge the constitutionality of PASPA.
Lesniak argues that the billions of dollars in illegal, offshore wagers should be retained and taxed by the state. In fact, the former senator claims, legal sports betting could contribute more than $100 million in annual tax revenue.
The first step is to address the state’s own prohibitions.
In 2011, lawmakers propose a constitutional amendment allowing sports betting at NJ casinos and racetracks, both in-person and over the internet. Voters approve the amendment by a 64 percent margin — 648,769 to 367,283 — clearing the first legislative hurdle with ease. (Spoiler: There will be many more hurdles to come.)
Less than two weeks after the vote, Lesniak introduces the Sports Wagering Act to legalize the activity in black and white. Senate committees approve the bill in December.
1992: US Congress passes PASPA
The US Congress passes the Professional and Amateur Sports Protection Act (PASPA), making sports betting illegal at the federal level.
Nevada sports betting is grandfathered in, and a few other states have narrow exemptions for things such as football squares and parlay cards. The remaining states are given one year to apply for their own relief, but none do — including New Jersey.