UFC supports expansion of legalized sports betting

October 31, 2014

ESPN reports that the UFC, to no surprise, supports the expansion of legalized sports betting in the United States.  UFC exec Lawrence Epstein was quoted as saying that legalized sports betting “will enhance the game as opposed to doing anything to hurt it.”

Epstein also stated to ESPN about the proposed new law allowing sports betting in New Jersey, “[t]o the extent that there’s nothing illegal about taking bets on the UFC in the state of New Jersey, we’d be absolutely fine with it.”  The comments come on the heels of similar support from first year NBA commissioner Adam Silver who believes that sports betting legalization in the U.S. is “inevitable.”

Major sports leagues including the NBA have sued the state of New Jersey and have obtained a temporary restraining order preventing the state’s racetrack, Monmouth Park, from accepting bets on its games.  Of note, U.S. District Judge Michael Shipp wrote in his ruling that the restraining order was not limited to the sport leagues involved in the suit.  Thus, it could prevent taking bets on MMA even though no promotion is currently involved in the litigation.

The lawsuit by the leagues argues that the law passed by Governor Christie, the 2014 Sports Wagering Act, violates the Professional and Amateur Sports Protection Act of 1992 (PAPSA).  PAPSA bans state-sponsored sports betting on all sports except jai alai, pari-mutuel horse and dog racing except in four states:  Oregon, Nevada, Montana and Delaware.  These four states have pre-existing gaming laws.

New Jersey Governor Chris Christie signed legislation that partially repealed the state’s sports betting ban.  Based on this, the state would allow sports betting at casinos and racetracks, which are licensed by the state.  Monmouth Park would have taken bets this Sunday if not for the temporary injunction filed by the sports leagues.

At this point, the sports leagues (NBA, NFL, MLB and NHL) have filed their reply briefs in New Jersey on the matter and now Judge Shipp will decide on whether oral argument is necessary. The TRO ends November 21st.

For those wondering, this issue is just the latest episode of a long fight for legalized sports betting in New Jersey.  A similar case was denied a U.S. Supreme Court hearing last term.  In arguing that  PAPSA violated states’ rights, New Jersey stated that the law was unconstitutional because it fully exempts Nevada and partially exempts Oregon, Montana and Delaware from the ban.  New Jersey had lost an appeal to the Third Circuit Court of Appeals to a rehearing on the case and attempted to take its case to the U.S. Supreme Court.

As a result of the denial, in August 2014, New Jersey passed the aforementioned partial repeal on the prohibition against sports wagering as a “work around.”  But, this is where we get the lawsuit from the sports leagues.

While the NBA may one day support legalized gambling, the issue here is the state law in New Jersey.  One would think that if a federal law is passed, the sports leagues would comply.

Payout Perspective:

It’s clear that the UFC, with its heritage (and some sponsors) based in the gambling industry, would support legalized sports betting in the U.S.  Certainly, the UFC might have concerns with regulation but overall it would seem like broader availability to gamble on the UFC would garner more interest in its product.  Obviously, the UFC is willing considering it seamlessly offers betting lines during its events and programming.  The new litigation in New Jersey will be interesting to follow as the  underlying issue here is that the law seems to be a way to boost revenue for the state.  Its not clear if the UFC will get involved at this point, but it will certainly be following it closely.

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