Assembly Panel To Consider Pro Sports Betting Measure Today
by Kevin McArdle
Monday, February 8, 2010
Yesterday, tens of millions of dollars and maybe more were bet on the Super Bowl. In Las Vegas it was done legally, but anyone who laid down a few bucks on the game in New Jersey was breaking the law. Today, the Assembly Regulatory Oversight and Gaming Committee will consider a measure that would ask Garden State voters if they would like to amend the constitution to allow pro sports betting in New Jersey.
Assemblyman John Burzichelli chairs the panel. He says, "Yesterday, when America stopped to watch the Super Bowl on TV, Las Vegas was loaded with tourists who not only enjoyed the city of Las Vegas, but also enjoyed the opportunity to legally bet on the Super Bowl. Atlantic City had a decent weekend because weekends are generally strong there, but it would have been an outstanding weekend had people visiting Atlantic City and its casinos been allowed to legally bet on the Super Bowl."
"Sports betting should be allowed in both our casinos and our race tracks," believes Burzichelli. "I think it's a given, people like to bet on sports."
Bets on the Super Bowl, NCAA March Madness and others sports could soon be legal in the Garden State. If a lawsuit filed almost a year ago is successful and the State Constitution is amended, sports betting would be allowed in New Jersey casinos, racetracks, over the phone and on an intra-state website.
State Senator Ray Lesniak has filed a lawsuit on behalf of the State of New Jersey, the Interactive Media Entertainment & Gaming Association, The New Jersey Thoroughbred Horsemen's Association, The Thoroughbred Breeders Association of New Jersey and the Standardbred Breeder & Owners Association of New Jersey to declare unconstitutional a law passed by the United States Congress and signed into law by the President of the United States of America on October 28, 1992.
"As Captain Renault said to Rick, 'I'm shocked, shocked to find that gambling is going on in here!' Gambling is going on here - sports gambling," says Lesniak. "According to a 1999 National Gambling Impact Study, $380 billion dollars a year are illegally wagered on sports betting. Profits from these wagers are lining the coffers of offshore internet operations, backroom bookies and organized crime rings. Sports betting in the U.S. is unregulated, untaxed and illegal: except in Nevada and as allowed in Delaware, Montana and Oregon."
When it was instituted in 1993, the Professional and Amateur Sports Protection Act, under the auspices of preserving the integrity of sports, banned sports betting in nearly every state in the nation. States that had casino gambling already in place were given a one-year window in which to pass legislation authorizing legal sports betting and be grandfathered in under the law. New Jersey's leaders at the time opted not to take part, and as a result, only four states - Nevada, Delaware, Oregon and Montana - can maintain legal sports wagering within their borders.
"This federal law deprives the State of New Jersey of over $100 million of yearly revenues, as well as depriving our casinos, racetracks and internet operators of over $500 million of gross income," explains Lesniak. "Rather than supporting thousands of jobs, economic activity and tourism, the federal ban supports offshore operators and organized crime." He adds, "Our casinos are suffering, our racetracks are dying and our State budget needs revenues." Lesniak calls the lawsuit, "the first step to undoing the injustice of the Professional and Amateur Sports Protection Act of 1992, healing our casinos, saving the lives of our racetracks, adding revenues to our State budget, and preserving and creating thousands of jobs."
State Senator Jeff Van Drew is a long-time advocate of legalized pro sports betting in New Jersey. He says, "Right now, of the four states that are grandfathered, only Nevada has an active sports betting operation. However, as states look for new sources of revenue in the current economic crisis, reports suggest Delaware may be considering instituting its grandfathered rights and may begin regulating sports betting this year. If this happens, it would certainly be detrimental to Atlantic City's casino industry, and will not be productive for South Jersey's regional economy - unless we can put New Jersey on equal footing with its neighboring state."
Professional and scholastic sports leagues vehemently oppose legalized sports gambling, arguing that the integrity of the games must be free of suspicion. They cite a long history of gambling-induced scandal, from the 1919 Black Sox, who threw the World Series at the behest of gamblers, to numerous college point-shaving schemes.
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Should New Jersey Tax The Rich Again?
by Kevin McArdle
Monday, February 8, 2010
A temporary surcharge on New Jerseyans earning over $400,000 a year expired on December 31, 2009. Although Governor Chris Christie is adamant that he will not hike taxes to balance a budget, State senate Majority Leader Barbara Buono thinks re-instituting the surcharge on the wealthy should at least be one option on the table. She is not proposing legisaltion that would re-enact the tax increase.
Rather than giving school districts $300 million in education aid, the state is asking district to draw down from their surpluses this year. Buono thinks that could be avoided.
Asked by Buono how much the tax hike could generate, David Rosen, the lead budget analyst with the non-partisan Office of Legislative Services (OLS) said, "In the current fiscal year maybe $300 million and another $700 million would come in in the next fiscal year."
Buono asked, "For the sake of discussion, that $300 million could be used to supplant the $300 million that is estimate to be generated from excess surplus from school districts?" Rosen says it could be used for that.
Republicans claim the tax on the wealthy is driving the rich out of New Jersey. Rosen says, "There's no question that the high income tax rates at the high end affect the behavior of some people, (but) we have not seen any data so far that show the high income tax rates have substantially eroded our tax base."
There's no doubt New Jersey could use some extra revenue. Governor Chris Christie insists the shortfall for the current fiscal year is just over $2 billion and the budget deficit for next year is over $11 billion. Last week, Rosen confirmed that Christie is in the ballpark and he warned that difficult financial times are going to plague New Jersey for quite some time.
Rosen says if New Jersey's economy grows at the historic rate of 4%-5% a year, "It is basically 2014 before we get back to where we were in 2008." He added that most economists do not expect that kind of growth so, "Going beyond 2011, the budget pressures that we face related to the revenue decline are not a short-term blip."
What makes crafting next year's budget more difficult says Rosen, "Is the Governor has taken revenues off the table as part of the solution and in the past we've used revenues to make up a significant fraction of the solutions." Rosen says he's not advocating for new or higher taxes. He's simply stating a fact.
State Senator Paul Sarlo heads up the budget panel. He and his Democratic colleagues on the committee met yesterday with acting State Treasurer Andrew Eristoff. Sarlo says, "We were anticipating hearing specifics, but they did not provide us with any specifics………We all anxious and there's a little bit of frustration on our part. We thought we were going to hear specifics."
Sarlo describes the meeting with Eristoff as, "Kind of open-ended about the situation. Confirming it's just a little bit over $2 billion, the current FY 2011 budget problem. Really about how we all have to work together. There were no specifics. There were no specifics at all." Sarlo says he was told Christie will roll out some details next week.
Michael Drewniak, Press Secretary for the Governor says, "Governor Chris Christie will address a special joint session of the Legislature next Thursday, February 11, regarding the state's current year budget deficit. Earlier today, Governor Christie spoke with both Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver to request the joint session."
Last week, Christie said, "If you fully fund everything, the numbers I have now are north of $11 billion. That's if you fully fund the pension payment, fully fund the school formula, fully fund all homestead rebates back to the original funding formula, not what was done last year."
Christie says, "It's a deficit of just over $11 billion. $27 billion or so in projected revenues. $38 billion or so in projected expenditures."
The Governor explained some factors playing role in the deficit. He says, "That is with the surcharge on small business and top rate taxpayers which have sunsetted and with the corporate business tax surcharge sunsetting on June 30."
New Jersey's budget shortfall for the current fiscal year could be as high as $2 billion and next's deficit could be five times that. Rosen delivered the sober news to the Senate Budget Committee yesterday.
Rosen said tax collections in almost every category are short of projections. He says the income tax is the only revenue source that is not under-performing.
"A 1.2 billion revenue shortfall for the year is not an unreasonable estimate," said Rosen. "Whatever the number is, if it's $2 billion or $1.5 billion or some other number, this is a budget problem that has to get resolved by June 30."
If spending cuts are made and all spending proposals are fulfilled, "It would suggest a budget problem in the current year, by the end of the year of slightly under $2 billion."
Joe Malone, the ranking Republican on the Assembly Budget Committee has asked Rosen to compile a list of funds that could be used as, "the Legislature grapples with a $2 billion hole in the state's current budget."
"Our state faces grave financial problems that we cannot ignore for another day," says Malone. "We need solutions and we need them now. The problem worsens every day we wait."
Last month, Rosen said, "You've got a structural deficit for 2011 of $8 billion, or $9 billion or $10 billion…..The precise number really doesn't matter. The magnitude of it is significant. It is similar to the magnitude that we faced last June." Yesterday, Rosen conceded that the FY 2011 deficit could be as high as $11 billion.
Many factors contribute to next year's problems. There is a $3 billion pension payment that may or may not be made. Rosen explains that New Jersey stands to receive $1.6 billion less in federal stimulus money. The State will lose about $1.1 billion as a result of temporary taxes that will expire. Property tax rebates cost the state roughly $1 billion and Rosen says school aid spending will increase by about $600 million due to the new education funding formula.
Recently there was a very public battle between Christie and Corzine over the current fiscal year's shortfall. Josh Zeitz, a spokesman for Corzine, said the Democrat left office with a $496 million surplus. Christie claimed Corzine failed to give a true budget projection through June 30. Zeitz calls Christie's forecast "phantom tax revenue projections" and accuses the new Governor of playing fast and loose with the facts.
Two weeks ago, Christie said the budget deficit for this fiscal year is roughly $1.2 billion. Last wek, he said, "I met for over two hours today with OMB (Office of Management and Budget) and they don't find the surplus that (former) Treasurer (David) Rousseau is talking about…….The hard numbers that I was presented with this morning are an additional $1.33 billion deficit for Fiscal Year 2010."
Rosen says Corzine and Christie are just looking at the same problem from two different points of view. He blames some of the discrepancy of the way the two administrations are doing their calculations.
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