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Atlantic City Racing Association v. Attorney General

March 28, 1983

ATLANTIC CITY RACING ASSOCIATION, A NEW JERSEY CORPORATION, PLAINTIFF,
v.
THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY; THE NEW JERSEY SPORTS & EXPOSITION AUTHORITY; AND THE NEW JERSEY RACING COMMISSION, DEFENDANTS



Gruccio, A.j.s.c.

Gruccio

[189 NJSuper Page 552] This case is before the court on cross-motions for summary judgment. Plaintiff instituted this action under N.J.S.A. 2A:16-50 et seq. seeking a judgment declaring that an arrangement proposed by plaintiff, under which horse races conducted by New Jersey Sports & Exposition Authority at its state-licensed racetrack, the Meadowlands, would be simulcast live via television operations to plaintiff's licensed race course, Atlantic City Race Course (ACRC), for the purposes of allowing plaintiff's patrons at ACRC to place parimutuel system wagers upon those races and to incorporate those wagers into a central parimutuel pool at the "sending track," would be permissible under N.J. Const. (1947) Art. IV, § VII, par. 2. Alternatively, plaintiff seeks an order approving a plan whereby, under the existing statutory framework, defendant New Jersey Sports & Exposition Authority would lease plaintiff's facilities and simulcast Meadowlands races to ACRC, allowing plaintiff's patrons to place wagers on those races. This latter proposal has been referred to as the "extended Meadowlands" concept. Named as defendants in this matter are the Attorney General of New Jersey, the New Jersey Sports & Exposition Authority (SA) and the New Jersey Racing Commission. Defendant SA has filed a crossclaim against the other defendants and joins in plaintiff's application for declaratory relief. Defendant Racing Commission is bound by law to follow the legal advice of the Attorney General. N.J.S.A. 52:17A-4. The Attorney General's present position, consistent with letter opinions dated July 15, 1982 and August 4, 1982, is that the simulcasting proposals submitted by plaintiff are prohibited under both his interpretation of N.J.

Const. (1947), Art. IV, § VII, par. 2 and statutes promulgated thereunder.

A

Initially, it appears without question that existing statutes promulgated by the Legislature to put into effect the parimutuel system of wagering on horse races as authorized by the 1939 constitutional amendment clearly bar the proposals contemplated by plaintiff. N.J.S.A. 5:5-62*fn1 and 5:5-63,*fn2 when

read both separately and jointly, unequivocally restrict parimutuel wagering on races to that track where the particular race is held. Given the clarity of these provisions, plaintiff's alternative "extended Meadowlands" concept cannot be sanctioned by this court under present law, as to do so would allow plaintiff to do indirectly what it clearly cannot do directly. While plaintiff and defendant SA do not expressly seek a ruling declaring N.J.S.A. 5:5-62 and N.J.S.A. 5:5-63 invalid, each party does offer arguments as to why any bar to plaintiff's proposal, be it statutory or constitutional, should be set aside to permit the proposal. The court will briefly address the validity of N.J.S.A. 5:5-62 and N.J.S.A. 5:5-63 in light of the indirect attacks on those provisions.

Plaintiff, citing the spread of competition from racetracks both within and without the state and severe adverse economic conditions which have resulted in plaintiff's track being operated at losses of millions of dollars since 1975, asserts that the approval of its simulcast proposal is vital to ACRC's continued existence. Plaintiff states that the closing of ACRC would have a substantial negative impact on such beneficial public purposes as the promotion of the State's racing industry and in-state breeding programs, and employment at the track and the surrounding area. On the other hand, plaintiff continues, the approval of its proposed plan and consequent revitalization of ACRC would benefit the State by promoting tourism in southern New Jersey and by increasing state revenues. The bleak economic picture painted by plaintiff is not insignificant. However, such economic hardship is clearly insufficient grounds for setting aside presumptively valid legislation, which was enacted pursuant to a specific constitutional grant of authority and which restricts parimutuel wagering to the track where the race is run. It is for the Legislature, the branch of government

closest to the people, to correct any economic hardship in a specific area where the Legislature deems such action appropriate. This is especially so in the present case in light of the clear and longstanding policy of New Jersey courts to accord great deference to the gambling statutes of this State. See State v. Puryear, 52 N.J. 81 (1968).

In a separate challenge to the validity of N.J.S.A. 5:5-62 and N.J.S.A. 5:5-63, defendant SA submits that the exercise of any statutory or regulatory authority by the State in purporting to prohibit plaintiff's proposed simulcasting arrangement is pre-empted by federal legislation regulating interstate communications (via the Communications Act of 1934, 47 U.S.C.A. § 151 et seq.) and the Federal Interstate Horseracing Act of 1978 (15 U.S.C.A. § 3001 et seq.).

The court has fully considered the pre-emption argument and finds it to be without merit for the following reasons. It is established law that the pre-emption doctrine will not be invoked unless the federal law is explicitly or implicitly intended to prohibit state regulation in the field, or it appears that an actual conflict exists between the operation of federal and state laws. See, e.g., Ray v. Atlantic Richfield Co., 435 U.S. 151, 157-158, 98 S. Ct. 988, 994-995, 55 L. Ed. 2d 179 (1978); McGlynn v. N.J. Public Broadcast. Auth., 88 N.J. 112, 137 (1981). In the present case, neither such an ouster of state authority nor a conflict is apparent. There can be no question that Congress, by the enactment of the above-cited federal laws or any other laws, did not intend to preclude state regulation of the manner and method by which gambling on horse races may be permitted within a state. Clearly this area is a matter of local interest subject to the police and regulatory powers of the states under the Tenth Amendment of the U.S. Constitution. Indeed, the Interstate Horseracing Act itself provides:

The States should have the primary responsibility for determining what forms of gambling may legally take place within their ...


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