When Was Online Sports Betting Legalized in New Jersey?

The Garden State was one of the first to fully embrace online sports betting, and it has been legal here since 2018. Here’s a look at the history of sports betting in New Jersey.

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Introduction

In May 2018, the U.S. Supreme Court struck down a 1992 federal law that had effectively banned commercial sports betting in most states, opening the door for states to legalize and regulate the activity. New Jersey was one of the first states to take advantage of the ruling, with Gov. Phil Murphy signing a bill into law in June 2018 that authorized both online and retail sports betting in the state.

The first sports betting operations in New Jersey launched a few weeks later, in mid-August 2018, at locations including Monmouth Park Racetrack and Meadowlands Racetrack. Online and mobile sports betting followed shortly thereafter; PlayMGM (now BetMGM) was the first online operator to launch, debuting its product on August 22, 2018.

The Timeline of Legalization

Pre-PASPA

Online sports betting was not always legal in the United States. In fact, it wasn’t until the Professional and Amateur Sports Protection Act (PASPA) was struck down in 2018 that online sports betting became a reality in New Jersey (and other states). But how did we get to that point? Let’s take a look at the timeline of events that led to the legalization of online sports betting.

Pre-PASPA
Before PASPA was enacted in 1992, there was no federal law that specifically addressed sports betting. This left the issue up to individual states to decide whether to allow sports betting within their borders. As a result, some states allowed sports betting and some did not.

PASPA
PASPA was a federal law that was enacted in 1992 with the intention of banning sports betting nationwide. The law made it illegal for states to “sponsor, operate, advertise, promote, license, or authorize by law or compact” any form of sports gambling. However, the law did exempt four states from its provisions: Nevada, Montana, Oregon, and Delaware. These four states were grandfathered in because they had already legalized some form of sports betting before PASPA was enacted.

Post-PASPA
In May 2018, the United States Supreme Court struck down PASPA as unconstitutional. This decision paved the way for states to legalize and regulate sports betting within their borders. After PASPA was struck down, several states quickly moved to legalize and regulate sports betting, including New Jersey.

PASPA and the Professional and Amateur Sports Protection Act

In 1992, the Professional and Amateur Sports Protection Act (PASPA) was passed, banning sports betting in all but four states: Nevada, Delaware, Montana, and Oregon. New Jersey was not one of the four states grandfathered in, and so PASPA effectively made sports betting illegal in the state.

This all changed in 2018 when the Supreme Court heard a case brought by the state of New Jersey challenging the constitutionality of PASPA. In a landmark ruling, the Court struck down PASPA as unconstitutional, clearing the way for states to legalize and regulate sports betting.

Within weeks of the ruling, New Jersey had passed a bill to legalize and regulate sports betting, and online and mobile betting was up and running by August 2018. So if you’re wondering when online sports betting was legalized in New Jersey, the answer is June 2018!

The Post-PASPA Era

In May of 2018, the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA), effectively opening the door for states to legalize and regulate sports betting.

Almost immediately after the ruling was announced, New Jersey — which had been at the forefront of the legal battle to overturn PASPA — moved to legalize sports betting. On June 11, 2018,Gov. Phil Murphy placed the first legal sports bet in the state at Monmouth Park Racetrack, and just over a month later, on July 14, 2018, the first batch of licensed sports betting operations went live in New Jersey.

Today, there are dozens of legal online sportsbooks operating in New Jersey, and hundreds of physical sportsbooks locations throughout the state.

New Jersey’s Fight for Legalization

It all started in 2011 when New Jersey tried to legalize online sports betting. The state was sued by the major professional sports leagues, which claimed that the state was violating federal law. After a long legal battle, the state finally won in 2018 and online sports betting was legalized in New Jersey.

The First Attempt: Christie v. NCAA

In 2012, New Jersey Governor Chris Christie signed a bill that would have legalized sports betting in the state. This was in direct conflict with the federal Professional and Amateur Sports Protection Act (PASPA), which only allowed Nevada to offer single-game wagering. The NCAA, NFL, NHL, NBA, and MLB filed a lawsuit against the state, claiming that the law violated PASPA.

The case went all the way to the Supreme Court, where it was decided in 2018 that PASPA was unconstitutional. This overturned the previous ban on sports betting and opened up the possibility for other states to legalize it. Following the decision, New Jersey quickly passed a new law legalizing sports betting, and sportsbooks began operating within weeks.

The Second Attempt: Murphy v. NCAA

In May 2018, the US Supreme Court issued a ruling in Murphy v. NCAA that struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA), effectively opening the door for states to legalize and regulate sports betting.

In the months following the decision, several states moved quickly to pass legislation and begin offering sports betting, but New Jersey was not one of them. In fact, it would be nearly a year before lawmakers in the Garden State would take any serious action on the issue.

The delay was due in large part to a legal challenge brought by the major professional sports leagues (MLB, NBA, NFL, NHL) and the NCAA, who argued that PASPA did not explicitly allow for individual state legalization and regulation of sports betting.

A lower court agreed with the leagues’ argument, but in September 2019, the US Third Circuit Court of Appeals ruled in favor of New Jersey. With that decision, the way was cleared for New Jersey to finally begin offering legal sports betting.

The Impact of Legalization

It has been about a year since online sports betting was legalized in the state of New Jersey. While it is still too early to tell what the long-term effects will be, we are already seeing some positive and negative impacts. On the positive side, the state is seeing an increase in tax revenue and jobs. On the negative side, there is an increase in problem gambling.

The Economic Impact

While it is difficult to determine the exact economic impact of the legalization of online sports betting in New Jersey, it is safe to say that it has been positive. According to a report by the American Gaming Association, the industry generated $8 billion in economic activity in 2018, and this number is expected to grow in the coming years.

The report also found that the industry supported over 500,000 jobs in 2018, and this number is also expected to grow in the future. The economic impact of online sports betting has been felt not only by those directly involved in the industry, but also by businesses that have benefited from increased tourism and spending.

The Social Impact

The social impact of online sports betting legalization in New Jersey has been largely positive. The state has seen a boost in tax revenue, jobs, and tourism since sports betting was legalized in 2018. Moreover, online sports betting has given residents a new way to engage with their favorite teams and athletes. There are some concerns about the impact of online sports betting on problem gambling rates, but overall the social impact of legalization has been positive.

Conclusion

Now that you know when online sports betting was legalized in New Jersey, you can make an informed decision about whether or not to bet on sports in the state. Keep in mind that there are still some restrictions in place, so be sure to check with your local laws and regulations before placing a bet.