High court case pits states against leagues

OCEANPORT, N.J. — With its spacious bar and banks of TVs tuned to allsports stations, the lounge at New Jersey's Monmouth Park Racetrack is a sports gamblers' paradise-inwaiting. All that's standing in its way: a 25-year-old federal law that bars betting on sports in most states.

An hour before Thursday night's Washington-Dallas NFL game, only about half a dozen people sat at the bar, most of them workers at the horse-racing track or nearby residents. But a case the Supreme Court will take up Monday could change that, packing the bar and making wagering on sports widely available nationwide.

The high court is weighing whether a federal law that prevents states from authorizing sports betting is constitutional. New Jersey is leading the challenge against that law, with all four major U.S. professional sports leagues and the federal government on the other side.

If the Supreme Court strikes down the law, giving sports betting the go-ahead, dozens of states could quickly make it legal. Monmouth Park is gambling on a win for New Jersey and has already spent $1 million on its sports lounge, ready to turn it into a sports betting parlor in short order. British bookmaking company William Hill would run the operation.

“I don't think it's unfair to say if there is a broad ruling, you could be witnessing a reshaping of the global gambling industry around that ruling,” said Chris Grove, managing director of Eilers & Krejcik Gaming, a California-based research firm that believes 32 states would probably offer sports betting within five years if the Supreme Court makes that possible.

Daniel Wallach, a legal expert in sports and gambling, says the case could “transform how sporting events are consumed and watched in this country.”

Monday's case pits New Jersey and other states against the four big sports leagues and the federal government. The stakes are high. The American Gaming Association estimates that Americans illegally wager about $150 billion on sports each year. In court, the NBA, NFL, NHL and Major League Baseball have fought New Jersey, arguing that expanding gambling would hurt the integrity of their games, though leaders of all but the NFL have shown varying degrees of openness to legalized sports gambling. More than a dozen states are supporting New Jersey.

Shawn Fluharty, a West Virginia lawmaker who has sponsored sports gambling legislation, says he believes his state would be one of the first to offer sports betting if the Supreme Court permits it. The Democrat says sports gambling is “a way to raise new revenue without raising taxes.”

New Jersey has spent years and millions of dollars in legal fees trying to legalize sports betting at its casinos and racetracks. In 2012, with voters' support, state lawmakers passed a law authorizing sports betting there. The state's action was a direct challenge to a federal law, the Professional and Amateur Sports Protection Act.

The 1992 law bars stateauthorized sports gambling with exceptions for Nevada, Montana, Oregon and Delaware, states that had some form of sports wagering before the law took effect. Nevada is the only state where a person can bet on a single game, though the law doesn't cover wagering between friends. In passing the law, Congress gave New Jersey a yearlong window to authorize sports betting at its casinos but the state didn't act in time.

Two decades later, when New Jersey decided to legalize sports betting, the four major professional sports leagues and the NCAA sued. New Jersey argued that Congress exceeded its authority when it prohibited states from authorizing sports betting, but it lost in court.