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In re Petition of Casino Licensees for Approval of A New Game

Decided: December 9, 1993.

IN THE MATTER OF THE PETITION OF CASINO LICENSEES FOR APPROVAL OF A NEW GAME, RULEMAKING AND AUTHORIZATION OF A TEST


On appeal from a determination of the New Jersey Casino Control Commission.

King, Havey and Arnold M. Stein. The opinion of the Court was delivered by Arnold M. Stein, J.A.D.

Stein

We accelerated this appeal, filed on November 18, 1993, permitted the professional major leagues to intervene and promptly heard oral argument.

We affirm the determination of the New Jersey Casino Control Commission that it has no constitutional or statutory authority to authorize sports betting in New Jersey's gambling casinos.

Appellants are the operators of all twelve licensed gambling casinos in Atlantic City. Intervenors are the leagues conducting major league professional sports in this country: the National Football League, the National Basketball Association, the National Hockey League and the Commissioner of Baseball. Earlier this year, the Legislature chose not to vote on a joint resolution to place a referendum on the ballot permitting a proposed constitutional amendment authorizing casino betting on sports events. The Leagues were among those who vigorously opposed submission of this proposed constitutional amendment to the voters.

Thereafter, on November 15, 1993, the Casinos filed a petition with the Commission seeking a determination that the 1976 state

constitutional provision authorizing casino gambling and the regulatory legislation enacted pursuant to it authorized sports betting operated by casinos as a "gambling game" permissibly conducted in those establishments. N.J. Const. art. IV, § 7, para. 2D. Attached to this petition was a comprehensive set of proposed regulations, modeled after those adopted in the state of Nevada where sports betting is legal. Sports betting, called "sports wagering" in the proposed regulations, is permitted on all sports events, professional and amateur, with the exception of sports contests in which there is participation by an educational institutional or non-professional organization principally located in New Jersey; high school sports events; the outcome of a public election held inside or outside of New Jersey; and any horse race not governed by the Simulcasting Racing Act, N.J.S.A. 5:5-110 to -126.

The Casinos required a speedy decision by the Commission. Under the Professional and Amateur Sports Protection Act, 28 U.S.C.A. § 3701 to 3704, governmentally-authorized betting on athletic events generally expired on January 1, 1993. However, the effective date of the prohibition is extended for New Jersey casinos to one year after the effective date of the Act, or January 1, 1994. 28 U.S.C.A. § 3704(a)(3)(A).

The Commission rejected the interpretation advanced by petitioners. So do we.

The constitutional amendment authorizing casino gambling provides:

It shall be lawful for the Legislature to authorize by law the establishment and operation, under regulation and control by the State, of gambling houses or casinos within the boundaries, as heretofore established, of the city of Atlantic City, county of Atlantic, and to license and tax such operations and equipment used in connection therewith . . . . The type and number of such casinos or gambling houses and of the gambling games which may be conducted in such establishment shall be determined by or pursuant to the terms of the law authorizing the establishment and operation thereof.

[ N.J. Const. art. IV, § 7, para. 2D (emphasis added).]

The expression of legislative intent surrounding adoption of this constitutional amendment is so strong that we would be remiss if we were to decide that this constitutional amendment authorizes

not only traditional in-house gambling games inside casinos but also permits sports betting therein. State v. Churchdale Leasing, Inc., 115 N.J. 83, 101, 557 A.2d 277 (1989) (examination of legislative history is relevant to determine legislative intent).

Gambling has been legalized in New Jersey very cautiously, one step at a time. The constitution of 1844 originally provided "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. of 1844 art. IV, § 7, para. 2. That paragraph was amended on September 28, 1897, to a more restrictive provision, specifically prohibiting lotteries and all other forms of gambling:

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 therefor be in any way diminished.

[ Id., as amended, September 28, 1897, proclamation October 26, 1897.]

No form of legalized betting was permitted in New Jersey until 1939, when the constitution was amended to permit pari-mutuel betting on ...


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