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LESNIAK DISCUSSES LEGALIZED ONLINE GAMBLING

SENATOR RAYMOND LESNIAK TALKS LEGALIZED ONLINE GAMBLING IN NEW JERSEY

By Jenny Woo
November 23, 2010
Gambling911.com

Just prior to Monday’s announcement that a resolution had passed the Senate Economic Growth Committee calling for a referendum that would allow residents to vote on legalized sports betting in the state next November, Gambling911.com’s own Jenny Woo sat down with the bill’s sponsor, State Senator Raymond Lesniak. The state is also looking to legalize online poker for its nearly 9 million residents. Sports betting would also ultimately be available via the Web.

Currently, a federal law prohibits sports betting in all but a handful of US states.

JENNY: Where do we stand in regards to the sports betting lawsuit? What are the important upcoming dates?

LESNIAK: The Justice Department has filed a motion to dismiss our complaint. We are going to be filing a motion for summary judgment. The court will then lay out a schedule for the bar arguments on those motions, which I expect to be heard sometime in October.

JENNY: What did you make of Governor Chris Christie's decision not to jump on board and support the suit?

LESNIAK: Well first of all, I was terribly disappointed primarily because he asked me for two extensions to consent to the court to give him two separate extensions to make that decision, which delayed the case for six months. If he wasn’t going to join, he should have just told me he wasn’t going to join. We would have had a decision right now; maybe we could have had sports betting in New Jersey by football season. But that aside, I covered my bet so to speak (Haha). Covering my bet I figured was better by getting the Senate President in the Senate to pass a resolution to join as a plaintiff, which was accepted by the court. So the New Jersey Senate is a plaintiff in the case, which is critical if the Governor is not going to be because one of the strongest arguments is a state’s rights claim that the federal government is not authorized to force state’s to deny it’s citizens an activity that the state wants them to enjoy. To raise the state’s rights claim you need a state plaintiff – a governor or a body of the legislature. We’ve covered – I believe a firm ground with the Senate being in. So from a substantive standpoint I think we will be able to raise the Tenth Amendment.

JENNY: Do you think Governor Christie’s decision had anything to do with the NFL decision to have the Super Bowl in New Jersey in 2014?

LESNIAK: I think that had an influence on him because we had a constitutional amendment – even if we are at war – when we are successful we have to amend our constitution to allow sports betting and we’ll move in after the Senate. Again, he asked us to delay voting on that specifically because it was before the decision was made with regard to the Super Bowl. So I think that had a profound influence on the Governor’s decision and I think it just showed bad judgment on his part.

Number one, the benefits for the Super Bowl – even though the game is being played in New Jersey – eighty percent of the benefits are going to New York City. The NFL decision was focused on New York City and the owners of the “New York” Giants and the “New York” Jets. They happen to play in New Jersey. We welcome them here. We are going to get some benefit but that was not the focus of the decision to have the Super Bowl at the Meadowlands (New Meadowlands Stadium).

Number two, Denver is going to be playing San Francisco shortly at Wembley Stadium in London and the people who will be going to that game will be able to bet on that game right across the street from the stadium. So who’s the NFL trying to kid? It didn’t bother them that they will be betting on their games at Wembley Stadium. So why would it bother them that we were pursing legalization of sports betting while they had the game in New Jersey? If that was the reason and it certainly seems like that had an effect – it showed poor judgment on his part.

JENNY: What is your opinion on Christie's attempts to take over Atlantic City?

LESNIAK: Well I think it’s a day late and a dollar short. I don’t have any problem with the government getting involved in administering the casino district because it’s not what it needs to be to attract tourism. But Atlantic City needs a huge infusion of investment powers that can only come from expanding gaming opportunities throughout the state of New Jersey. New Jersey is losing billions of dollars in revenues to Pennsylvania, New York, and Delaware where they now have casinos, racinos and slot machines circling Atlantic City and yet the Governor is sticking his head in the sand and saying that Atlantic City is the only place where we can have gambling in the state. I think that short changes Atlantic City because we can have our casinos in Atlantic City running a casino in the Meadowlands and reinvest it in Atlantic City. Atlantic City has to become an entertainment tourist destination. It can’t just rely on gaming because there’s too much competition surrounding it. While I think the concept of the state authority basically administering the public safety requirements and infrastructure requirements of the casino district it needs hundreds of millions of dollars of investment and that’s nowhere to be found in the recommendations that the Governor is supporting.

JENNY: Do you foresee pressure from the NFL similar to what took place in neighboring Delaware?

LESNIAK: I don’t know what pressure they can possibly bring. There again, they’re not going to back out New Jersey for the Super Bowl. They would have to answer to New York and Wellington Mara and Woody Johnson. Are they still alive? I’m sorry. (Haha) Excuse my ignorance. They’re going to have to answer to them. The only leverage that the NFL can exercise is in the mind of the Governor and in my opinion it’s nonexistent.

JENNY: Jumping over to H.R. 2267, Barney Frank’s bill. How will legalized online gambling on the state level coincide with legalized online gambling at the federal level should Barney Frank's bill pass in the Senate and the House?

LESNIAK: We want to go ahead regardless of what they do in Congress or actually in spite of what they do in Congress because Barney Frank’s bill would limit states opportunity to tax to six percent and my bill for New Jersey had the twenty percent “vig” on it if you will for the state. So it really would limit New Jersey and other states ability to get revenues from Internet gaming. We’re ready to go it alone and I think we’re going to. I actually don’t think the federal bill will ever pass but if it does I’m sure we’ll opt out and we’ll be up and operational before that ever does as well.

JENNY: When you say that you don’t think the federal bill will pass. What is your reasoning behind that?

LESNIAK: First of all, there’s a lot of opposition to expand gaming at the federal level. There’s also a lot of opposition to the federal government being involved in gaming. For those reasons and all the anti-gambling opposition as well, I don’t see it passing. Even if it does, New Jersey is going to opt out because we’ll do a lot better job of it by running it on our own.

JENNY: The federal legislation states that businesses currently catering to US citizens will not be able to obtain licenses. Will a similar structure be set up in the state of New Jersey? I am sure you are aware that online gambling sites continue to take business from New Jersey citizens.

LESNIAK: Oh you bet they do! We already have a very good Casino Control Commission licensing system already in place that’s worked very well in licensing casinos in Atlantic City. I would expect that the same standards of integrity would be applied for folks applying for an Internet Gaming License in New Jersey.

JENNY: The US Attorney's Office and other law enforcement agencies have aggressively gone after payment processors in the past two years for dealing with companies they say are operating illegally. How does New Jersey overcome this obstacle? For instance, if XYZ sportsbook gets licensed in New Jersey, won't payment processors fear doing business with XYZ sportsbook out of fear they too will be prosecuted?

LESNIAK: No, because the Justice Department doesn’t have any authority over Internet Gaming that is exclusively intrastate. The very sophisticated software available is to ensure that only New Jersey residents will be able to gamble and that the signal that the Internet site be located in New Jersey as well and that precludes any federal authority from intervening.

JENNY: Let's just throw a name out there. Say New Jersey licenses Sportingbet, a United Kingdom publicly traded company. How would NJ overcome the possibility that other states might have issued arrest warrants for principles of Sportingbet (thus preventing them from entering U.S. soil). You might recall Peter Dicks,

LESNIAK: I’m not sure that they would be able to get a license in New Jersey. Again, they would have to go through the rigorous licensing procedures that we already have in place for casinos executives. I’m not going to prejudge any specific case but the licensing procedure is well established. You would have to meet some vigorous standards of integrity and any applicant that doesn’t meet them won’t get a license.

JENNY: Well once these businesses can legally set up in New Jersey would it be your advice to only land and depart from Newark Airport? How does one overcome the very real possibility that other states consider your "licensees" criminals?

LESNIAK: Again, I’m not going to give people legal advice. (Haha) My advice is that if you can’t meet the standards of integrity that have been well established under New Jersey Casino Control Commission Regulations then don’t even apply for a license.

JENNY: Thank you so much Senator. I appreciate it.

LESNIAK: Thank you.

Submitted by Jenny Woo on Tue, 11/23/2010 - 17:01

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