Last week, outside the U.S. Supreme Court in Washington, D.C., Republican Gov. Chris Christie and Democratic state Sen. Raymond Lesniak — a man Christie once called a “lunatic” — shared a hug. The lovefest came after the court heard oral arguments in New Jersey’s quest to have the 1992 Professional and Amateur Sports Protection Act overturned and sports betting in the state legalized.
Such is the hysteria surrounding this issue.
Legal sports betting once seemed like the longest of long shots for New Jersey. But, now … now, there’s hope. And unfortunately, the hope is fueling lots of unreasonable expectations.
Our advice: deep breath, everyone.
Observers came away from the hearing last week convinced that the justices seemed to side with New Jersey — this despite the well-known danger of trying to read where the court is going on the basis of questions the justices ask during oral arguments. An actual decision is not expected for months.
Politicians (and businesspeople) can’t resist trumpeting good news. But, trust us, sports betting is not going to “save” Atlantic City. It’s not going to fix the state’s dismal finances. It’s not going to put the economy into the end zone.
Certainly, legal sports betting is a plus. And it’s encouraging that the issue now centers around federalism and states’ rights, and not misguided moral qualms about betting on sports events, which is currently estimated to be a $150 million-a-year illegal industry. Even the major sports leagues that are New Jersey’s opponents in court are more concerned at this point with getting a uniform regulatory framework than maintaining an outright ban.
But, even if New Jersey wins, it is unlikely to have a monopoly on legal sports betting. New Jersey could be the first new state to get sports books up and running, but other states will quickly follow. The Associated Press estimates that 32 states could be offering legal sports betting in five years.
And the projected numbers are all over the place. Legal sports betting nationwide will be a $1.4 billion market, a $7 billion market or a $16 billion market, according to various experts. New Jersey alone could be a $502 million market — or an $8 billion market with 3,633 new jobs!
One estimate says the state could glean additional $173 million in tax revenue — which, even if true, isn’t a particularly big number.
Atlantic City casinos once estimated that legal sports betting could bring in an additional $200 million a year in gaming revenue and some additional nongaming revenue from events tied to major sporting events like the Super Bowl or the Final Four. Sports betting will be a plus for A.C., but not the “lifeblood” Lesniak describes.
The state’s three racetracks could be the biggest winners. They are closer to death than the Atlantic City casinos, and sports betting could keep them alive.
As we said, this is all good. But legal sports betting — if allowed by the court — is unlikely to be the game-changer being predicted right now. And having unreasonable expectations does no one any good.