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Atlantic City Racing Association v. Attorney General

Decided: March 27, 1985.

ATLANTIC CITY RACING ASSOCIATION, PLAINTIFF-RESPONDENT,
v.
THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY AND THE NEW JERSEY RACING COMMISSION, DEFENDANTS-APPELLANTS, AND THE NEW JERSEY SPORTS & EXPOSITION AUTHORITY, DEFENDANT-RESPONDENT



On appeal from the Superior Court, Appellate Division, whose opinion is reported at N.J. Super. (1983).

For reversal -- Justices Clifford, Handler, O'Hern, Garibaldi and Sullivan (temporarily assigned) and Judges Matthew and Fritz (temporarily assigned). For affirmance -- None. The opinion of the court was delivered by Matthews, P.J.A.D. (temporarily assigned).

Matthews

We are requested in this appeal to interpret Art. IV, § VII, par. 2 of the New Jersey Constitution of 1947, which incorporates Art. IV, § VII, par. 2, as amended June 20, 1939 of the Constitution of 1844. Specifically, we are asked whether intertrack pari-mutuel betting on simulcast horse racing authorized by the Intertrack Wagering Act, N.J.S.A. 5:5-100 to 109, violates the constitutional provision because prior approval was not sought and obtained from the general electorate.

Plaintiff instituted this action under N.J.S.A. 2A:16-50 to 62, seeking a judgment declaring that an arrangement proposed by it would be permissible under the N.J. Const. of 1947, Art. IV, § VII, par. 2. Under the proposed arrangement, horse races conducted by New Jersey Sports & Exposition Authority at the Meadowlands would be simulcast live by television to plaintiff's track, Atlantic City Race Course, permitting plaintiff's patrons at Atlantic City to place pari-mutuel system wagers on horses running in those races and to incorporate their wagers into a central pari-mutuel pool at the Meadowlands track. Winning patrons at the receiving track would be paid the same amount that they would have received had they actually placed their wagers at the Meadowlands. N.J.S.A. 5:5-106. Alternatively, plaintiff sought 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 Atlantic City, permitting 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 the cause were the Attorney General, the New Jersey Sports & Exposition Authority (Sports Authority), and the New Jersey Racing Commission. Pursuant to N.J.S.A. 52:17A-4, the Racing Commission must follow the legal advice of the Attorney General, whose interpretation of N.J. Const. (1947), Art. IV, § VII, par. 2 is such that the simulcasting proposal submitted by plaintiff is prohibited. In a cross-claim filed against the other defendants, defendant Sports Authority joined in plaintiff's application for declaratory relief and sought a further ruling that federal law preempted any State prohibition of the simulcasting arrangements proposed by plaintiff.

All parties moved for summary judgment as to all claims. The trial court, in a formal opinion reported at 189 N.J. Super. 549 (Law.Div.1983), denied the validity under current law of the "extended Meadowlands" proposal because he found that N.J.S.A. 5:5-62 and 5:5-63, read both separately and jointly, unequivocally restrict pari-mutuel wagering on races to the track where a race is held. The court also rejected defendant Sports Authority's argument that the State's authority to regulate horse racing under N.J.S.A. 5:5-62 and 5:5-63 is preempted by federal legislation.

The trial court granted plaintiff's and defendant Sports Authority's motions for summary judgment holding that the simulcasting proposal contemplating the placing of wagers at licensed racetracks on races run in New Jersey's authorized racetracks is not constitutionally prohibited. He concluded, however, that since N.J.S.A. 5:5-62 and 5:5-63 limit such betting to the particular track where the race is being held, plaintiff's proposal is prohibited under existing statutes. Consequently, plaintiff's proposal would be "acceptable if and only

if it received legislative and regulatory sanction from the appropriate bodies authorized to put into effect the permitted forms of horse race wagering in New Jersey." 189 N.J. Super. at 560.

The Attorney General and the Racing Commission appealed from that portion of the trial court's decision that granted summary judgment as to the reach of N.J. Const. of 1947, Art. IV, § VII, par. 2. The Appellate Division affirmed, essentially for the reasons expressed by the trial court, in a per curiam opinion, one judge dissenting. 198 N.J. Super. 247 (1983). Defendants appeal to us as a matter of right. N.J. Const., Art. VI, § 5, par. 1(b); R. 2:2-1.

Subsequent to the decision of the trial court, the Legislature passed, and the Governor signed into law, the Intertrack Wagering Act, L. 1983, c. 340, codified as N.J.S.A. 5:5-100 to 109. This law apparently sought to fulfill the legislative sanction called for by the trial court by providing for the simulcasting of and intertrack wagering on horse races conducted within the State. Although the act took immediate effect, it expired on January 1, 1985 unless it received approval of the electorate in the general election to be held in November 1984. During September 1984, the Legislature passed and the Governor signed into law L. 1984, c. 155, which repealed the requirement in L. 1983, c. 340 § 14 that the continuation of intertrack wagering be submitted to a public vote. In the statement annexed to the bill (S. 1545) the sponsor stated that the Appellate Division decision rendered unnecessary the need for a public referendum. The enactment further amended section 15 of L. 1983, c. 340 so as to authorize simulcasting and intertrack wagering on a permanent basis.

I.

The evolution of legalized gambling in New Jersey has been grudging. Because of widespread abuses in various gambling activities and the attendant social and economic ills engendered,

gambling has historically been viewed as an undesirable activity. Caribe Hilton Hotel, Inc. v. Toland, 63 N.J. 301, 304 (1973). Although the Constitution of 1776 had no provision on gambling, the framers of the Constitution of 1844 enacted an express prohibition against lotteries as well as the buying and selling of lottery tickets in the State:

No lottery shall be authorized by this state; and no ticket in any lottery not authorized by a law of this state shall be bought or sold within the state. [ N.J. Const. (1844), Art. IV, § VII, par. 2.]

In 1897, because of widespread concern over existent gambling operations, see Wight v. N.J. Racing Commission, 128 N.J.L. 517, 521 (Sup.Ct.1942), anti-gambling forces successfully sought an amendment of the State Constitution to bar all gambling in the State. Dombrowski v. State, 111 N.J.L. 546, 547 (Sup.Ct.1933). That amendment provided:

No lottery shall be authorized by the legislature or otherwise in this state, and no ticket in any lottery shall be bought or sold within this state, nor shall pool-selling, book-making or gambling of any kind be authorized or allowed within this state, nor shall any gambling device, practice or game of chance now prohibited by law be legalized, or the remedy, penalty or punishment now provided therefore be in any way diminished. [ N.J. Const. (1944) Art. IV, § VII, par. 2.]

In a special election conducted in 1939, the people, prompted principally by the financial havoc wrought by the Depression, modified the broad anti-gambling ban in a partial retreat from the total prohibition of the 1897 amendment. New Jersey Sports & Exposition Authority v. McCrane, 119 N.J. Super. 457, 510 (Law Div.1971), aff'd as mod., 61 N.J. 1, app. dism. sub nom. Borough of East Rutherford v. New Jersey Sports & Exposition Authority, 409 U.S. 943, 93 S. Ct. 270, 34 L. Ed. 2d 215 (1972), aff'd on appeal after remand, 62 N.J. 248, cert. den., 414 U.S. 989, 94 S. Ct. 291, 38 L. Ed. 2d 228 (1973). Intending to create a source of revenue, the people approved an amendment that legalized pari-mutuel wagering*fn1 on horse races:

It shall be lawful to hold, carry on, and operate in this State race meetings whereat the trotting, running or steeplechase racing of horses only may be conducted between the hours of sunrise and sunset on week days only and in duly legalized race tracks, at which the pari-mutuel system of betting shall be permitted. No lottery, roulette, or game of chance of any form shall be authorized by the Legislature in this State, and no ticket in any lottery shall be bought or sold within this State, or offered for sale; nor shall pool-selling, book-making, or gambling of any kind be authorized or allowed within this State, except pari-mutuel betting on the results of the racing of horses only, from which the State shall derive a reasonable revenue for the support of government; nor shall any gambling device, practice, or game of chance, or pari-mutuel betting thereon now ...


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