April 23, 2019

Interview: Senator Ray Lesniak

Could the Wire Act derail all of New Jersey’s hard work? Senator Ray Lesniak reflects on the journey to this point and what may still be to come

 

New Jersey sports betting champion and former State Senator Ray Lesniak believes a decade from now Americans will barely remember any of the anti-gambling sentiment that existed before PASPA was repealed. 

“Online gambling and sports betting will be accepted throughout America and without giving any thought to the fact that we didn’t have it for so many years”, he says. “It’s going to be part of the country’s fabric in terms of its businesses, just the way it is in the UK”.

Lesniak, who served in the New Jersey State Senate from 1983 to 2018, recalls his childhood, placing bets on horse races for his father at the local grocery store in his neighbourhood. 

“Maybe that’s why I understood the nature of sports betting a lot more than other folks because where we grew up, we had our local bookies”.

However, those early memories were not the ultimate catalyst for Lesniak’s advocacy around legalised gambling. 

What prompted him to file his 2009 lawsuit challenging the Professional and Amateur Sports Protection Act (PASPA) was the arrest of his friend, and former Union City mayor, Rudy Garcia in 2007.

Garcia had been placing wagers around the time of an FBI investigation into illegal gambling operations in New Jersey. Consequently, he found himself falsely accused of charges including racketeering, conspiracy to commit money laundering, and promoting gambling.

Garcia was cleared by a Monmouth County grand jury in 2008 but for Lesniak the injustice had already taken its toll on his friend’s reputation, career and, presumably, peace of mind.

“It was totally wrong”, he says. “He could have gotten on a plane, flown to Las Vegas and bet legally”. In Lesniak’s mind, Nevada was enjoying a privilege that other states were also entitled to.
 
Meanwhile, the sense of injustice was compounded by a downturn in the performance of New Jersey’s casinos and racetracks. Both were facing closures, and with that the threat of significant job losses.

“What most people don’t know is that New Jersey has more acres of horse farms than any state in the nation, so it’s a vital industry”, he explains.

Lesniak’s answer was two-fold: legalise online gambling to provide a much-needed boost to the casinos and prove that PASPA was unconstitutional so that New Jersey could also legalise sports betting.

It was not a smooth ride. Lesniak and New Jersey governor Chris Christie rarely saw eye-to-eye and a legal challenge he prepared was not backed by the governor until a referendum in 2010 revealed public support for the idea. 

It was 2012 before any sports betting laws were passed and a further six years before PASPA was finally repealed in the Supreme Court last May.

“That was 12 years after Rudy’s arrest”, Lesniak remembers. “Twelve years and eight set-backs in court”.

He was on the golf course when he got the call. “Needless to say I didn’t play golf, I just called everybody, I was so happy” he says. The first call was to Garcia: “We won and you did it! You got it started!”

The next hurdle

Of course, it wasn’t long before new challenges started to rise to the surface. The Wire Act being one that lay as a dormant threat all along.

Lesniak sees no value in New Hampshire’s legal action because the judge in that case has already said his ruling will be highly localised, having no affect in other states.

Lesniak wants to see New Jersey file its own suit in the Third Circuit but the state’s attorney general does not agree.

Furthermore, Lesniak believes the Department of Justice’s reinterpretation of the Wire Act was “a gift” to Las Vegas Sands Corporation chairman, and principal donor in the Trump election campaign, Sheldon Adelson.

“Adelson doesn’t care about lotteries, he has the mistaken belief that internet gaming will hurt his brick and mortar casinos, and I say mistaken because it’s been proved in New Jersey - it saved the casinos”, Lesniak argues.

“New Jersey right now has the most to lose, because it has been such a big success in New Jersey, and I believe that would have an impression on the court in the third circuit. But I’ve been outvoted here”, he adds.

His fear is that the longer the Wire Act hangs over the industry, the less momentum the new regime in the states will be able to build. “There’s not going to be any more investment, there’s not going to be any innovation expanding beyond the traditional compacts that we would like to do in New Jersey. We’d like to go international – none of that’s going to happen”.

On the plus side, Lesniak regards New Jersey as a model example for other states to follow and one that should be the blueprint for those looking to legalise sports betting down the line.

He says he’s surprised so few states have taken the opportunity this far and believes that many, such as New York, are failing to calculate the benefits beyond tax revenues, such as the generation of jobs.

“Atlantic City was dying because it was based almost exclusively on day trippers – people would come and go. Sports bettors often will go for a whole week or a whole weekend and they’ll enjoy the shows, they’ll shop, they’ll rent rooms, there’s a lot of ancillary benefits and multipliers of economic revenues, both for the casinos and for the state”.

Ultimately though, Lesniak believes this reticence will fall away and that the expansion of gambling operations across the country is inevitable.

So, what of the leagues – they were keen to impose an integrity fee on betting in the state, is that argument a thing of the past? 

Lesniak has very little sympathy with the league’s position. “I took issue with the leagues’ hypocritical attitude that the federal ban had to stay in place to protect the integrity of the sport”, he says.

“The NFL was playing one game at Wembley Stadium, now four games, where people are betting in the stands on the games. And then they went to Mexico City, where people are betting and then they’re having deals with fantasy sports operators, which as far as I’m concerned is gambling on sports.”

Recalling the National Collegiate Athletic Association cancelling New Jersey tournaments in protest of the state’s stance on sports betting, Lesniak laughs. “I said, if that’s the case, then the only place you’re going to be able to play is Utah!” 
 

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