The director of the New Jersey Division of Gaming Enforcement (NJDGE), David Rebuck, created quite a stir last month at the ICE Totally Gaming 2018 exhibition in London, where he announced that the NJDGE was encouraging prospective gaming operators to begin applying for sports betting licenses ahead of the pending Supreme Court ruling in Murphy v. National Collegiate Athletic Association.
Rebuck’s comments were slightly misconstrued by some media outlets, which interpreted them to mean that sports betting licenses were being made available to anyone who sought one. The reality is that the NJDGE currently offers three types of gaming-related licenses — Casino Service Industry Enterprises (CSIE), Ancillary Casino Service Industries, and Vendor Registration — but no specific sports betting license because, of course, sports betting is not yet permitted in the state.
What Rebuck aimed to convey was that in the event New Jersey prevails and is granted the green light to activate its sports betting bill, companies interested in entering the bookmaking space in the state would be wise to begin the application process sooner than later. That way, they can ensure they’re at the front of the line when sports betting licenses are made available.
Which companies have begun the sports betting application process?
While no official announcements have been made in regards to the application process, a reading of the tea leaves would indicate that Borgata and parent company MGM Resorts International will be among the first wave of operators to gain a sports betting license, as MGM announced in November plans to build a $7 million sportsbook at the Borgata in Atlantic City.
As for non-brick-and-mortar operators, a pair of online leaders in the gambling space, SBTech (a sports betting solutions provider) and GAN (a software provider that powers New Jersey’s existing online gambling platforms) announced in January that they had reached agreement on a strategic partnership. It thus stands to reason that they have initiated the sports betting application process with an eye toward cornering the online market.
When will online sports betting be available in New Jersey?
The topic of online sports betting represents a bit of a gray area for a few reasons. The first is because New Jersey’s Sports Wagering Act, which was signed by then-Gov. Chris Christie on Oct. 17, 2014, did not address an online component, as the genesis of the legislation predated online gambling in the state. Which is to say it will be up to the New Jersey state legislature to decide how online sports betting is implemented and rolled out once the Supreme Court issues its ruling.
That leads into the second reason, which is that the nature of the ruling itself will dictate precisely how New Jersey is permitted to proceed. If PASPA is struck down, the language in the Supreme Court’s majority opinion will become paramount. It could, for instance, declare a predetermined moratorium on all state-run sports betting and instruct Congress to develop a new federal framework in a post-PASPA landscape. In that scenario, New Jersey would figure to be subject to the moratorium like any other state.
On the other hand, in the event of a narrow ruling that upholds the constitutionality of PASPA but doesn’t deem New Jersey in violation of the federal statute, the matter of online sports betting would then be transferred to the purview of state lawmakers. And because the way the law is currently written requires prospective bookmakers to partner with casinos or racetracks in order to offer sports betting, online operators such as the SBTech-GAN duo — or a DFS company like DraftKings or FanDuel — will likely have to either seek a partner or successfully lobby lawmakers in Trenton for some type of online carveout.
What all this means is that not only will the scope of the Supreme Court decision carry significant implications, but also that it’s unrealistic comprehensive online sports betting will be included in the first phase of New Jersey’s rollout.