Wednesday, March 25, 2009

Iowa casinos eye NJ lawsuit aimed at opening sports betting

Iowa's top gaming industry representative said this morning that his association is closely watching a federal lawsuit in New Jersey aimed at opening up sports betting nationwide.

"Certainly we're aware of it," said Wes Ehrecke, president of the Iowa Gaming Association. "As far as the industry I think this certainly would be of interest to our members."

With New Jersey facing major budget problems and with Atlantic City casinos suffering, a state senator there has filed a suit in U.S. District Court in Newark, N.J. against the Justice Department that seeks to overturn a ban on sports betting.

Only four states are allowed to have government-sanctioned sports betting: Nevada, Oregon, Delaware and Montana.

"Obviously in those states it can be done in a regulated fashion and taxed," Ehrecke said.

New Jersey State Sen. Raymond Lesniak's suit challenges the exemption for the four states as unconstitutional.

At this point Ehrecke said the Iowa Gaming Association, an industry group representing Iowa's 17 state-regulated casinos, would be monitoring the lawsuit. But Ehrecke said he planned to raise the issue at the associaton's next board meeting in April to see if members want to take a more activist role in seeking to open up an option for sports betting in Iowa.

He said some first steps would be to assess what other states with commercial gaming are doing in light of the lawsuit. If successful, the lawsuit still would leave open questions about the federal and state legislative and legal paths to a day when fans could, say, bet on Iowa-Iowa State football games at Prairie Meadows Racetrack and Casino in Altoona.

But the lawsuit may be a reason to start a debate on legalized sports betting in Iowa, Ehrecke said.

"Is it time to allow other states to opt in?" Ehrecke said.

Ehrecke said legalized sports betting in Iowa would clearly mean more money for the casinos and the state through the taxes levied on the industry. And the state is looking to tie its fortunes even tighter with gaming houses. Gov. Chet Culver is now seeking to fund a $750 million infrastructure-and-jobs revitalization plan by financing bonds with casino revenues.

The Associated Press reports that a consultant hired by one of the plaintiffs in the New Jersey suit, the Interactive Media Entertainment & Gaming Association, estimated that sports betting could be a $10-billion-a-year industry in New Jersey alone.

Ehrecke said he had no studies about what legalized sports betting at Iowa's casinos could mean financially for the industry and state.

He noted that "it's a moot point" as long as the federal ban is in place and that it's a long way from the filing of a lawsuit to a dramatic change in the law.

Opponents of legalized sports betting say it harms the integrity of professional and collegiate athletics.

Advocates say betting is taking place anyway, and may as well be regulated and benefit the state rather than boosting the fortunes of organized crime and offshore facilities.

"As Captain Renault said to Rick, 'I'm shocked, shocked to find that gambling is going on in here,'" Lesniak said, appropriating a famous quote from the movie "Casablanca" in an AP story.

This story is crossposted at the Carroll Daily Times Herald.

(Top photo: Iowa Gaming Association president Wes Ehrecke.)


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