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Don't believe the legalized sports-betting hype

BY JOSH MCMAHON
NEWJERSEYNEWSROOM.COM

sportsbet_optNew Jersey loves gambling. That's a given. Lotteries – we were among the first in the nation; horse racing – we've been placing bets on win, place and show for decades; casinos – we broke Nevada's exclusivity on slot machines and table games more than 30 years ago.

In all those cases, voters were told gambling revenue would ease the pressure for more taxes. (Yeah, right!)

Now there's a push for sports betting and according to the latest poll, people are clamoring for it.

Once again, backers are dangling the possibility of millions – up to $100 million a year – in new revenue. The implied argument: Making sports wagering legit is a way to control taxes.

Don't bet on it.

Supporters of the latest effort – especially state Sen. Ray Lesniak, a Union County Democrat and the prime mover – need to stop inflating the amount of cash the state could collect from the sports book. They need to deal with some real figures.

Betting on the Giants, Jets, Nets, Knicks, Yankees, Mets and others  will bring in extra bucks  - no doubt about that. But the amount will be nowhere near enough to have a significant impact on the state budget and certainly nowhere near what would be needed to forestall a tax increase.

There's no question that the public loves the idea. The latest Fairleigh Dickinson University PublicMind poll shows overwhelming support. Those asked about allowing sports betting at Atlantic City's casinos loved the notion – 63 to 32 percent. In every subgroup - men, women, liberals and conservatives – opinion was the same.

In New Jersey, the philosophical debate about state-sponsored gambling has long been settled. Voters approved the lottery in 1969 as a way of mitigating the need for higher taxes. Then in 1976 voters took a chance on casino gambling in Atlantic City, again as a way of easing the pressure for even higher taxes. So the ethical propriety of the state profiting from gambling isn't an issue. Rather, it's whether voters are being handed rose-colored glasses by backers of sports betting.

For starters, it will be years before a guy can walk into an Atlantic City casino and place a bet that the Giants will beat the spread on Sunday's game with the Eagles. It's going to take years of successful court cases. This is where Lesniak comes in.

To his credit, Lesniak isn't asking the state to fund the legal challenge to a 1992 federal law that prohibits sports betting in New Jersey. He's doing it himself. And no doubt his intention is to give the state another revenue source.

But here's a real simple question: If taking bets on games would be such a money maker, why aren't the casinos in court?

Here's the real simple answer: Revenue from sports betting is miniscule.

Last year Nevada casinos won $136.4 million from betting on games. That seems like a lot until you look at the overall total the casinos won - $11.6 billion. You can do the math but it's something like 1 percent of the casinos' win.

Backers of sports betting supposedly estimated that it could become a $10 billion-a- year industry in New Jersey by 2011 if bets could be put down not just in casinos but racetracks, online and by phone.  Maybe that's true but the poll found voters want sports  betting confined to Atlantic City and racetracks,  so that limits the take.

But it's also hard to figure out how Trenton could take $100 million in tax revenue a year from sports betting when you consider that only $136 million was wagered last year in Nevada. Overall, New Jerseys casinos win less than those in Nevada and there's no reason to think that the sports betting would be any different.

Beyond that, New Jersey's gambling tax is 8 percent, so even at $10 billion a year the state wouldn't get close to $100 million in revenue.

All this revenue talk is speculative, at this point. Whether New Jersey has sports betting depends on the outcome of Lesniak's court fight. He's challenging a 1992 federal law that limits sports betting to four states – Nevada, Delaware, Montana and Oregon. Seventeen years ago states were offered the option of permitting sports betting. New Jersey politicians decided to take a pass.

Even if Lesniak is successful, any court ruling would probably apply to all other 46 states. Does anybody seriously think that some of the others won't get in on the action? What that will do is dilute the revenue pool.

My argument is not against sports betting. The major leagues cry that betting would ruin the games. Get real.

Newspapers already run the betting lines. Why? The answer is obvious?

At least legalized sports betting would give the state a piece of the take.

As the pubic debate continues, backers ought to level with the public about what's actually involved. Sure the state could use the extra cash but don't pretend that allowing bets on the Yankees/Red Sox game would significantly affect taxes.

Voters aren't going to buy that line again. They will see such claims for what they really are – another case of politicians behaving badly.

 
Comments (1)
1 Tuesday, 28 April 2009 10:40
law of the AC
Tourism, man.

Increased tourism will lead to more in AC revenue, which will lead to more state tax revenue. It's not JUST the actual sports betting that the Senator is banking on to increase state revenues.

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