New Jersey lawmakers are racing to enact sports gambling legalization after the U.S. Supreme Court struck down a federal ban.
The ruling gives them hope of new revenue for the cash-strapped state government and debt-ridden Atlantic City.
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The legislation would create an 8% gross revenue tax on in-person wagering and a 12.5% levy on online sports bets with the proceeds earmarked for senior citizens and the disabled. An additional tax of 1.25% on gambling revenue received by racetracks would be distributed to the host municipalities and counties.
“We want to act quickly to capitalize on the Court’s decision so that we can get sports gaming in place and operating in New Jersey,” said Senate President Steve Sweeney, D-Gloucester, who introduced the measure along with Senators Jeff Van Drew, D- Millville, and Vin Gopal, D-Long Branch. “We have a competitive advantage with a long history of casino gaming including a regulatory infrastructure that has been operating for decades.”
Monmouth Park Racetrack in Oceanport is positioned to be the first New Jersey track to take advantage of legalization; the large British betting outfit William Hill has already built a $1 million sports-betting lounge in anticipation of the state obtaining a legal victory. Betting will begin
A recent study from Oxford Economics estimated that New Jersey would generate more than $173 million of added annual tax revenue and 3,633 jobs from legalized sports betting.
"States and local governments that wish to legalize sports gambling will see minor benefits from the incremental tax revenues, although it will take time to implement,” Moody’s Investors Service analyst Emily Raimes said in a statement. “Cities like Atlantic City that have long desired sports gambling will see a positive impact depending on how states regulate it."
New Jersey has faced weakened credit conditions in recent years driven largely by unfunded pension liabilities with 11 bond rating downgrades between 2011 and 2016, driving rating to .A3 from Moody’s Investors Service, A-minus from S&P Global Ratings, and A from both Fitch Ratings and Kroll Bond Rating Agency.
“I am thrilled to see the Supreme Court finally side with New Jersey and strike down the arbitrary ban on sports betting imposed by Congress decades ago,” New Jersey Gov. Phil Murphy said in a statement. “I look forward to working with the Legislature to enact a law authorizing and regulating sports betting in the very near future."
Atlantic City also stands to benefit financially. The Jersey Shore gambling hub nearly defaulted on its debt in 2016 and has been under state control for the past year and a half. The city currently has junk bond ratings of CCC-plus from S&P Global Ratings and Caa3 from Moody’s.
“Sports betting could generate millions in revenue for Atlantic City and diversify our gaming market,” Atlantic City Mayor Frank Gilliam said in a statement. “I hope that New Jersey is an early adopter of legalized sports betting so we can capitalize on another revenue stream.”
New Jersey’s Casino Control Commission and the Division of Gaming Enforcement would be charged with regulating the new sports betting operations under the proposed bill. Those placing wagers would need to be at least 21-years old and betting would prohibited on any collegiate athletic events taking place in the state and on any sports competitions involving any New Jersey college teams.
New Jersey
Senator Van Drew said that sports betting legalization would be especially be a boost for Atlantic City because the casinos will attract tourists for major championship events. Atlantic City experienced five casino closures between 2014 and 2016, but is scheduled
“The business that it would bring to Atlantic City during any of these big sports events would be enormous,” said Van Drew in a statement. “If sports’ betting was legal during this year’s Super Bowl, we would have seen hordes of people coming to Atlantic City to celebrate and watch the Eagles win.”
