New Jersey Lawmakers Send Sports Betting Bill to Governor Murphy

New Jersey residents are one step closer to having access to legal sports betting. Garden State lawmakers unanimously passed a sports betting regulation bill yesterday and have sent it over to the Governor’s Office for Phil Murphy’s signature.

Governor Murphy is expected to sign the bill because he has been supportive of New Jersey’s sports betting efforts. However, he has not yet stated explicitly whether he will sign this particular bill.

Phil Murphy spokesman Dan Bryan said this regarding the passage of the bill:

“Governor Murphy looks forward to closely reviewing the sports betting legislation that was recently passed by the Legislature. The Governor has long been supportive of New Jersey’s right to allow sports betting and he wants to ensure that the proposed regulatory scheme is fair and reasonable.”

This bill represents the final major legal hurdle for sports betting in New Jersey. The state was able to repeal its own sports betting prohibition after winning its Supreme Court case last month. Yesterday, the Assembly and Senate each voted on the bill and both passed it without a single dissenting vote for a final score of 73-0 in the Assembly and 37-0 in the Senate.

When news of New Jersey’s Supreme Court victory broke on May 14th, Monmouth Park officials stated they would like to begin accepting sports wagers as soon as Memorial Day. However, state lawmakers warned Monmouth Park to hold off until the state could pass another bill containing regulations to oversee the industry. Currently, sports betting is legal but unregulated in New Jersey.

Senate President Steve Sweeney put a halt on Monmouth Park’s Memorial Day plans after asking the track to wait until New Jersey implements sports betting regulations. He warned the track that the bill may include language stating any entity that began taking sports bets before regulations were adopted would not be eligible to take sports wagers after the regulation is passed.

Interestingly, the “poison pill” language was stripped from the bill just before passing. Even so, Monmouth Park president Dennis Drazin said he would wait for the governor’s signature on the new bill before going live with sports betting. Monmouth Park had been hoping to go live by 5 PM Friday night with its brand-new, $2.5 million sportsbook, but things moved too slowly to make that happen.

Some lawmakers have expressed frustration with Murphy’s seeming reticence to sign the bill quickly. The Governor has said he “won’t be rushed” into signing the bill and will review it the same as all legislation that hits his desk.

Here’s how Senator Declan O’Scanlon put it:

“We knew it was coming. We know we’re ready to go. This is a really big weekend, and this is the height of the season. So, every day a delay costs millions of dollars. Aside from the needless revenue and job damage that it does, it sends a bad message about the motivation here.”

Dennis Drazin has been patient throughout this process, even though he’s clearly chomping at the bit to get his cash-strapped racetrack taking sports bets. Here’s what Drazin said recently regarding the delays:

“I’m trying to get open as soon as I can. But at the end of the day, I have a responsibility to Monmouth Park and the state and the local community. If I do something that causes Monmouth Park to get delayed in opening, then that doesn’t help anybody, so I have to respect the process.”

A Look Inside the Bill

The current New Jersey sports betting bill (A-4111) will allow sports betting to take place at Atlantic City Casinos, racetracks and online. Customers must be at least 21 or older to participate.

Additionally, the bill calls for the New Jersey Division of Gaming Enforcement to issue sports betting licenses to casinos and for the New Jersey Racing Commission to issue licenses to racetracks. However, all licenses will be renewed through the Division of Gaming every five years.

An 8.5% tax will be assessed on bets placed at licensed casinos and racing facilities plus an extra 1.25% fee earmarked to market Atlantic City. Online wagers are to be taxed at 13%. Physical betting locations will be allowed to get started immediately while online betting will be able to commence thirty days later.

Additional regulations beyond those are to be issued by the Division of Gaming Enforcement in consultation with the Casino Control Commission. Specifically, A-4111 calls for regulations related to the amount of cash reserves that must be held by operators, how wagers on “a series of sports events” are managed, maximum bet sizes, types of records that must be kept, accounting methods, responsible gambling and more.

The MLB, NBA and PGA opposed the New Jersey bill over its lack of an integrity fee. The leagues have been pushing the idea of a 1% fee applied to the total sum of wagers accepted and payable to the leagues. The idea of an integrity fee has received pushback from lawmakers in multiple states, including New Jersey. The bill sitting on the governor’s desk right now does not include an integrity fee.

Considering the pro sports leagues fought New Jersey every step of the way, it is not surprising the state opted not to give them what would essentially mount to a 20% tax on sports betting operators’ revenue. Overall, the legislation that is awaiting Governor Murphy’s signature today looks like a win for players and operators alike.