New Jersey Opting in On Integrity Fees

May 4, 2018
New Jersey Governor Phil Murphy

New Jersey, the crusading state in the fight for legal sports betting, now seems to have caved into the demands of the sports leagues, at least, to a certain degree. It has been revealed that NJ lawmakers may have originally conceived the idea of integrity fees, however, the leagues are the ones responsible for pushing it out to other states in hopes of getting a piece of legal sports betting. New Jersey is currently fighting in court over the right to authorize sports betting and this new bill puts regulations in place for a new market.

This new NJ sports betting bill tips the NJ Division of Gaming Enforcement as the primary source of regulation for sports gambling. Any Atlantic City casino or racetrack will be allowed to offer betting (also mobile betting) but under certain conditions. Any establishment looking to offer betting must construct a brick-and-mortar sportsbook environment.

No casino establishment can operate on solely mobile wagering. Businesses may petition to launch an online service during the construction period, but this would have to first be approved. The business must also use the same name for the website as the physical sportsbook. The New Jersey Racing Commission would be responsible for approving sportsbook operations. It is also possible for casinos and racetracks to jointly operate a sportsbook, pending approval.

The bill creates a Sports Betting Integrity fund, from which integrity fees may be paid out to the major sports leagues like the NFL, NBA, NHL, MLB, and NCAA. However, the language in this bill is different than others in that the leagues may not receive any of this money. 2.5% of all gross betting revenue is to be put into this fund from the various locations offering sports betting. Sports leagues may seek reimbursement for incurred expenses pertaining to ensuring integrity within the league, but they would need to file a claim with the Attorney General.

In the event a claim is approved, the money would be paid out from the Sports Betting Integrity Fund. NJ regulatory offices can also pull from this fund to ensure their own integrity, meaning the state would have first dibs on the money as opposed to the sports leagues. No word has broken yet on the sports leagues’ reaction to this clause.

All betting on college events taking place in New Jersey is banned as well as college events involving a New Jersey school. Despite this ban, NJ lawmakers are optimistic that legal sports betting will revitalize their casino economy. Assemblyman Eric Houghtaling, Assemblywoman Joann Downey and Assembly Appropriations Chair John Burzichelli, the 3 co-sponsors for this bill, see this as a way of boosting attendance at brick-and-mortar venues and potentially bringing more jobs to the NJ market. All this depends on whether SCOTUS rules in favor of New Jersey and repeals PASPA, but if they do, the Garden State is ready to pull the trigger on sports betting.