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NJ anxious to cash in on legal sports betting

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Dennis Drazin, CEO of Darby Development LLC, which operates Monmouth Park Racetrack.
Dennis Drazin, CEO of Darby Development LLC, which operates Monmouth Park Racetrack. - ()

It didn’t take long for Dennis Drazin to set a date for sports wagering to go live at Monmouth Park Racetrack.

Less than a full day after the U.S. Supreme Court ruled in favor of a bid by the state of New Jersey to legalize sports betting, the CEO of Darby Development LLC, the company that operates the track, proclaimed May 28 the day Monmouth Park would begin taking wagers on sporting events.

You can understand Drazin’s enthusiasm to get going: He had been preparing for years for legalized sports betting to become a reality. Monmouth Park was among the entities that petitioned the nation’s top court to make the ruling it did May 14.  

Drazin’s company and its partner William Hill, the U.K. bookmaking giant, built out the William Hill Sports Bar at Monmouth Park with $500,000 of the racetrack’s money, he said.

“We also renovated the grandstand for an additional $1 million,” Drazin said. “We have more television screens, odds boards and more windows for ticket writers as opposed to betting tellers.”

William Hill also is contractually obligated to spend $5 million to build out a Las Vegas-style sports bar on the footprint of the Lady’s Secret Café by the racetrack’s clubhouse, he said.

In his haste to announce the May 28 date, Drazin said he believed Monmouth Park was “not subject to an injunction and until there is new legislation, we believe we are free to open up in a privately regulated environment.”

He did, however, offer this caveat: “If the governor and/or the Legislature ask us to slow down, we will defer to their wishes.”

That he did. As it turned out, it was the Legislature that forced Drazin to pull on the reins of his plans for at least a little while until the appropriate regulations were in place and legislation makes it through to Gov. Phil Murphy’s desk, likely sometime in June.

Some estimates say New Jersey could net as much as $10 billion a year in revenue from sports betting. In anticipation of the Supreme Court’s ruling, six legislators in New Jersey’s General Assembly drafted a bill to legalize sports betting and set the Division of Gaming Enforcement as the state’s regulator of the newly legalized industry.

Assembly Bill 3911 was directed to the Assembly Gaming, Tourism and the Arts Committee. Assembly Speaker Craig Coughlin, D-19th District, indicated he was in touch with Murphy and Senate President Steve Sweeney, D-3rd District, about how to initiate and regulate sports gaming.

Meanwhile, a trio of state senators has advanced a proposal for an 8 percent gross revenue tax on in-person wagering, along with a 12.5 percent levy on sports bets. The funds generated would go toward programs for senior citizens and the disabled, while an additional 1.25 percent tax on racetrack gaming revenue would be handed out to the host municipalities and counties.

Murphy expressed his support for legalized sports wagering and was awaiting the legislation.

“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,” Murphy said in a statement. “New Jersey has long been the lead advocate in fighting this inherently unequal law, and today’s ruling will finally allow for authorized facilities in New Jersey to take the same bets that are legal in other states in our country.”

Upon hearing news of the ruling, Murphy’s predecessor Chris Christie, who for years fought to expand gambling at Monmouth Park, tweeted: “A great day for the rights of states and their people to make their own decisions. New Jersey citizens wanted sports gambling and the federal Gov’t had no right to tell them no. The Supreme Court agrees with us today. I am proud to have fought for the rights of the people of NJ.”

Illegal betting has been widespread across the U.S. since the passage of legislation called the Professional and Amateur Sports Protection Act of 1992, which was designed with the intent of preserving the integrity of sporting events. PASPA, also known as the “Bradley Act,” is named for its author, former New Jersey senator and New York Knicks star Bill Bradley.

“It’s a landmark decision,” said Ronald Riccio, general counsel with Morristown-based McElroy, Deutsch, Mulvaney & Carpenter who argued on behalf of Monmouth Park Racetrack before the Supreme Court. “[This was] the age-old debate between the power of the federal government and the autonomy of states. Now it’s up for each state to decide for themselves.”

In a press conference May 14, Drazin talked about how the track “has been the leader throughout in fighting this fight.”

“We were the only ones willing to do it in the beginning,” he said. “The other casinos had regulatory concerns based on business they had in other states. Even when everybody was telling me it’s time to give up, you can’t win, you’re fighting the Goliaths of the world: [the] National Football League, Major League Baseball, National Hockey League. We kept persevering. Our legal team, which was headed by Ron Riccio, continued to persevere. I kept encouraging everybody to hang in there.

“… At the end of the day this is terrific for New Jersey. We think that of the $400 billion illegal wagering market in this country, we think probably $10 billion will come in in New Jersey. That revenue will help not only racetracks and casinos, but I’m sure the Legislature will put the taxes to good use. ... New Jersey needs tax dollars. Although people don’t like to hear about raising taxes, sometimes you have no choice. I support the governor and Legislature in doing whatever is best for New Jersey.”

Added Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Tourism and Hospitality at Stockton University: “It’s very exciting news for Atlantic City. We will have yet another source of revenue for the gaming industry in the area. … Slowly but surely and in terms of revenue, Atlantic City can look forward to ongoing growth.”

One of its casinos, Golden Nugget Atlantic City, said May 16 it had inked a deal with gaming and online entertainment company Churchill Downs Inc. to begin offering sports betting options as soon as the first quarter of 2019.

Howard Burns and Steve Viuker contributed to this report.

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