Tag Archives: new jersey casinos

Christopher Soriano Speaking at Seton Hall Law School’s Gambling Law Symposium

Duane Morris’ Christopher Soriano will be presenting at a gambling law symposium hosted by the Seton Hall Law School’s Continuing Legal Education at Seton Hall University on March 1, 2018 at 3:30 p.m.

The symposium will discuss New Jersey’s gambling laws while focusing on the following topics:

  • The New Jersey Constitution, Statutes, Rules, and Regulations Governing Gambling
  • The Definition of Gambling Under New Jersey Law: The Chance Versus Skill Debate Involving Fantasy Platforms and Poker
  • The Impact Of Technological Advances Upon Laws Governing The Placement of Wagers On Horse races
  • Overview Of Supreme Court’s Sports Betting Case and
  • On-Line Casino and Other Forms of Gambling Under Federal and New Jersey Law

For more information and to register, please visit the event website.

New Jersey Senate and Assembly Reach Compromise on North Jersey Casino Expansion

Under a compromise reached by the New Jersey Senate and Assembly leadership the proposed state Constitutional amendment will be put to a vote in both bodies which would allow two additional casinos in the northern part of the state.   Under the compromise current  Atlantic City casino license holders would have and inside track and have six months to submit proposals to build the new casinos, and their plans must call for investing at least $1 billion in each facility.

If that criteria isn’t met, those without Atlantic City licenses can bid to build the new North Jersey casinos.  They would also be required to invest at least $1 billion for each facility

It appears the proposed amendments will not be voted on in this current legislative session which ends on Tuesday, January 12, 2016 and 12:00 noon, but rather in the new session which begins thereafter.  As such both the Assembly and Senate will be required to pass the amended proposal with 3/5th majorities for the proposed amendment to be on the November, 2016 ballot.

 

New Jersey Assembly Offers its Version of North Jersey Casino Expansion

Just days following a proposed amendment to the New Jersey State Constitution proposed in the State Senate and as detailed here , the New Jersey Assembly offered its own proposed Amendment to the Constitution which would also authorize up to two additional casinos in North Jersey.

Both Amendments propose no more the two casinos, each located in different counties and outside a 75 mile radius of Atlantic City.  The 75 mile radius restriction eliminates Monmouth Park Racetrack as a possible site for casino expansion.

The primary differences are as follows;

    • Applicant eligibility:  The Assembly version of the proposed amendment allows one of the two licenses to be awarded to an applicant with no current ownership or ties to an existing Atlantic City casino.  The Senate version of the amendment limits eligibility to (1) a currently licensed Atlantic City casino operating as of December 11, 2015; or (2) any person licensed as a principal owner (yet undefined) of a holder of a New Jersey casino license that was operating a casino which was conducting gambling on December 11, 2015 if that principal owner also holds a valid license to own and operate a casino in another jurisdiction with licensing standards similar to those in New Jersey.  The Assembly version only applies the Senate version’s proposed eligibility requirements to the “initial license.”  The current Atlantic City casino tie-in eligibility requirement presumably does not apply to the second license awarded.
    • Tax Allocation to Atlantic City.  The Assembly version of the proposed Constitutional Amendment allocates 35% of state tax revenuers from the two new casinos for purposes if the recovery, stabilization or improvement of Atlantic  City.  The Senate version  allocate 49% of such tax revenue for the recovery, stabilization or improvement of Atlantic  City.

The Senate and Assembly must agree on an identical version of the proposed Amendment which would have to be approved with 3/5 votes by both houses of the NJ Legislature or majority votes, twice over two years.  The votes have to be completed at least 90 days before going on the ballot of a state-wide referendum to amend the NJ State Constitution.

New Jersey Legislature Takes First Step To Authorize North Jersey Casinos

A Proposed Amendment to the New Jersey State Constitution will authorize two additional casinos in the State. The details of the Proposed Amendment are as follows:

  • No more than 2 casinos, each one to be located in different counties in State
  • New casinos must be located  outside a 75 mile radius from Atlantic City.
  • Eligibility for the license is limited to:
    • (1) a currently licensed Atlantic City casino operating as of December 11, 2015; or
    • or (2 ) any person licensed as a principal owner (yet undefined) of a holder of a New Jersey casino license that was operating a casino which was conducting gambling on December 11, 2015 if that principal owner also holds a valid license to own and operate a casino in another jurisdiction with licensing standards similar to those in New Jersey
  • Tax rate to be determined in subsequent legislation. 49% of such tax revenue for 15 years is dedicated for recovery , stabilization or improvement of Atlantic City.  2% of tax revenue dedicated to thoroughbred and standardbred  horsemen.
  • The Resolution has to be approved with 3/5 votes by both houses of the NJ Legislature or majority votes twice over two years. The votes have to be completed at least 90 days before going on the ballot of a state-wide referendum to amend the NJ State Constitution.

A copy of the proposed amendment can be read here: SCR 185.

Third Circuit Continues NJ Sports Betting Prohibition

In a much anticipated, closely watched decision, today the US Court of Appeals for the Third Circuit held that New Jersey’s 2014 efforts to implement sports betting at casinos and racetracks violates federal law.  The 2-1 majority decision was authored by Judge Marjorie O. Rendell joined by Judge Maryann Trump Barry; Judge Julio Fuentes dissented.

How did we get here?   The federal Professional and Amateur Sports Protection Act (PASPA), enacted in 1991, prohibits states from authorizing sports betting.  In 2012, New Jersey challenged the constitutionality of PASPA, but the Third Circuit held that the statute was constitutional.   The Supreme Court declined to hear the case.  Sports betting is a crime in New Jersey.  Seizing on language in the Third Circuit’s opinion, however, New Jersey enacted a statute in 2014 that simply stated that any state law that would prohibit sports betting at a casino or racetrack was repealed – i.e., that activity was no longer a crime.  It did not explicitly say that casinos or racetracks could offer sports betting.

The sports leagues, however, took the position that this limited repeal amounted to an “authorization” by another name.  And, “authorizations” are prohibited by federal law.  This dispute – what does it mean “to authorize” – is at the base of the decision that was issued this morning.

The court held:  “We conclude that the 2014 Law violates PASPA because it authorizes by law sports gambling.”  The court cited three reasons for its holding.  First, the court stated that absent the 2014 law, sports gambling prohibitions would apply to casinos and racetracks; therefore, repealing those prohibitions must amount to an authorization.  “The 2014 law provides the authorization for conduct that is otherwise clearly and completely legally prohibited.”

Second, the court stated that the selectiveness of the repeal – limited to racetracks and casinos – “constitutes specific permission and empowerment.”  The court distinguished its holding in the 2013 decision that saved the constitutionality of PASPA.  The court notes that “had the 2014 Law repealed all prohibitions on sports gambling, we would hard pressed…to find an ‘authorizing by law’ in violation of PASPA.”  In other words, the Court has essentially held that the only repeal that would pass  muster under PASPA is a complete repeal – i.e., allowing anyone in the state to offer sports betting.

Third, the court held that because Congress gave New Jersey one year to opt out of PASPA initially, Congress must have concluded at the time that sports betting in New Jersey casinos would violate PASPA.  “If sports gambling in New Jersey’s casinos does not violate PASPA, then PASPA’s one year exception for New Jersey would have been superfluous.”

Judge Fuentes – who wrote the Court’s 2013 opinion finding PASPA to be constitutional – dissented.  He notes that “the 2014 Law renders previous prohibitions on sports betting non-existent” and then criticizes the majority for taking issue with the “selective” nature of the repeal.  “As I see it, the issue is whether a partial repeal amounts to authorization.  Because this logic rests on the same false equivalence we rejected in Christie I, I respectfully dissent.”

Judge Fuentes notes that to repeal a statute is to make it as though the statute never existed.  “A partially repealed statute is treated as if only the remaining part exists…after the repeal, it is as if New Jersey never prohibited sports gambling in casinos, gambling houses, and sports racetracks.”    How, therefore, Judge Fuentes asks, can a repeal be an authorization?

Judge Fuentes says that there is no explicit grant of permission under the statute for anyone to engage in sports betting.  Second, Judge Fuentes argues that there is a logical flaw in the argument:  if withdrawing some prohibitions amounts to an authorization, then withdrawing all prohibitions must also amount to an authorization, which means that New Jersey has no choice at all, which means that PASPA is unconstitutional.  This is particularly striking reasoning from the author of the 2013 decision holding PASPA to be constitutional.

It remains to be seen whether New Jersey will seek review in the Supreme Court, or whether some other legislative solution – either on the state or federal level – may be forthcoming.  For now, though, New Jersey will still not be able to offer sports betting in its casinos and racetracks.

Series Of Bills Introduced Regarding AC’s Future

New Jersey’s political and business leaders have been engaged in vigorous discussion lately about the future of New Jersey’s gaming industry and Atlantic City in particular.  Yesterday, New Jersey Senate President Stephen Sweeney introduced several bills as part of these ongoing efforts to address the transitions in Atlantic City and New Jersey’s gaming industry.  I’ve summarized each of them below.

S2572 – Major Changes to Casino Property Taxes

Atlantic City’s casinos pay the lion’s share of property taxes, and those property taxes are calculated based on the assessed value of the property.  Over the last several years, many casinos have successfully appealed the assessed value of their properties, based on the downturn in Atlantic City’s gaming market.  As a result, the amount of tax dollars paid to the City of Atlantic City (which then must distribute a share to the School District and Atlantic County) has declined.

S2572 would dramatically change the property tax structure for Atlantic City casinos.  First, the bill provides that every casino property in Atlantic City is exempt from traditional property taxes.  Instead, the casinos will be organized into the Casino Operator’s PILOT Council (PILOT standing for Payment In Lieu Of Taxes).  The members of the Council will agree to make a PILOT payment to the City of $120 million in 2015, and adjusted for inflation thereafter.  However, if annual gross gaming revenue is between $2.6 billion and $3 billion, the PILOT increases to $130 million; $150 million if revenue is between $3 billion and $3.4 billion; and $165 million if revenue is between $3.4 billion and $3.8 billion.  If revenue falls below $2.2 billion, the amount will be proportionally decreased.

Each casino’s share of the payment is to be calculated by a formula that takes into account, in equal parts, (a) the amount of land in acres owned by the casino; (b) the number of hotel rooms and (c) the property’s gross gaming revenue.  For 2015 and 2016 only the casinos will be obligated to pay an additional $30 million per year.  If new casinos open or existing casinos close, the formula will be adjusted to reflect that.

S2573 – Mandatory Health Benefits for Casino Employees

S2573 is a short bill requiring that a casino licensee submit proof to the Division of Gaming Enforcement that “all agreements it has entered into with each majority representative of its employees for collective bargaining purposes provide for suitable health care benefits and suitable retirement benefits for all full-time employees covered by such agreements.”

A casino that fails to do so would be subject to license revocation.

S2574 – Aid to Schools

S2574 would create a new form of state aid called Commercial Value Stabilization Aid.  This aid would be made available to the Atlantic City school district.  If the Commissioner of Education determines based on a needs assessment that the aid is warranted, then the Commissioner can authorize state aid to defer the school portion of the municipal tax levy.  This aid would only be available until such time as assessed values in Atlantic City return to the levels they were at in 2008.

S2575 – Reallocation of Investment Alternative Tax

In addition to an 8% gross revenue tax, Atlantic City casinos pay 1.25% of gross gaming revenue to the Casino Reinvestment Development Authority (CRDA).  Until 2011, the funds collected by CRDA were used to invest in various projects around the state.  Since that time, the funds are to be used exclusively to fund projects in Atlantic City.  This bill would reallocate all CRDA funds paid by casinos to the City of Atlantic City for the next 15 years and would require that the City use those funds exclusively to pay down its municipal debt.

S2576 – Elimination of the Atlantic City Alliance

The Atlantic City Alliance is a non-profit corporation funded by the casinos to serve as a public-private partnership to market Atlantic City.  This bill would essentially eliminate the Atlantic City Alliance.

It remains to be seen whether any of these bills will pass and what other ideas may become part of the discussion.  Each bill would have to pass both the Assembly and the Senate by the end of the 2015 legislative year, and be signed by Governor Christie, in order to become law.

 

BREAKING: NJ Attorney General Issues Sports Betting Opinion; Seeks Modification of Injunction

In what could open the door once again to sports betting in New Jersey, today NJ Acting Attorney General John J. Hoffman issued Formal Opinion 1-2014 regarding sports betting. At the same time, the State has sought relief from the United States District Court relating to the injunction issued against the State barring it from regulating sports betting.

New Jersey’s legislation that authorized sports betting was enjoined by the federal courts because the courts concluded that the Professional and Amateur Sports Protection Act (“PASPA”) was constitutional and prohibited New Jersey from regulating sports betting. As the Attorney General’s opinion points out, however, the state’s law authorizing the regulation of sports betting also stated that a casino or racetrack may offer sports betting. Continue reading BREAKING: NJ Attorney General Issues Sports Betting Opinion; Seeks Modification of Injunction

Ten States Consider Internet Gambling Legislation

Internet gambling is currently legal and operating in three, U.S. States – Nevada, New Jersey and Delaware. Additional states, perhaps realizing that the likelihood of federal legislation on the topic anytime soon is remote, considered their own internet gambling legislation this past year. Proposals for new, or expanded internet gambling have, or will likely be considered by California, Colorado, Hawaii, Iowa, Louisiana, Massachusetts, Mississippi, New Jersey and Pennsylvania.

Continue reading Ten States Consider Internet Gambling Legislation

Will The Voting Rights Act Decision Affect NJ Sports Betting? Maybe, According to a Last Minute Flurry of Activity

Ordinarily, by the night before an oral argument in an appellate court, all of the written material that the judges will consider has long since been submitted. But, since late this afternoon, there has been a flurry of what are known as Rule 28(j) letters submitted to the United States Court of Appeals for the Third Circuit in connection with tomorrow’s oral arguments in NCAA v. Christie, dealing with the constitutionality of PASPA and whether New Jersey will be able to offer sports betting in casinos and at racetracks. The name of the letter comes from Federal Rule of Appellate Procedure 28(j), which provides that if new authorities come to a party’s attention before an appeal is decided but after a brief has been filed, the party may notify the Court of that authority in a letter not to exceed 350 words.

Continue reading Will The Voting Rights Act Decision Affect NJ Sports Betting? Maybe, According to a Last Minute Flurry of Activity

Do Professional Leagues Have Standing To Challenge Sports Betting In NJ?

Today, oral argument took place in US District Court in Trenton, before Judge Michael Shipp in the NCAA v. Christie sports betting litigation. The only issue before the court was whether the NCAA and four major professional sports leagues (“Leagues”) have standing to challenge the state’s enactment of sports wagering. The court decided to consider standing before turning to the merits. The state has argued that the Leagues lack standing under Article III of the US Constitution to challenge New Jersey’s efforts to legalize sports betting.

The court began by noting that the burden to establish standing was on the Leagues, and asked the Leagues to address the impact of Officer of the Commissioner v. Markell (the Delaware sports betting lawsuit) on standing; the necessary level of injury in order to establish standing; whether the Professional and Amateur Sports Protection Act (“PASPA”) could, in and of itself, convey standing; and whether the undisputed facts before the court could convey standing.

Continue reading Do Professional Leagues Have Standing To Challenge Sports Betting In NJ?