State Assemblyman Ralph Caputo (D) has filed a bill that creates new penalties for sports betting operators that take bets on so-called “prohibited sports events.”

The bill amends the A4111 New Jersey law that authorizes NJ sports betting. The new penalties amount to the following:

  • Payment of an amount equal to all wagers improperly accepted on the prohibited sports event;
  • And payment of not less than $20,000 and not more than $100,000;
  • And the suspension of the licensee or operator from the conduct of sports wagering for a period of not more than 10 days.

The A4111 law does specifically list penalties for “insiders” betting on sports events (players, managers, team owners and referees), but doesn’t specify penalties for operators that accept wagers on “prohibited” events.

In a sense, the new bill is doing something very simple. Caputo is making it crystal clear what the consequences of breaching the law are.

The natural question then is why is this necessary?

The NCAA and NJ sports betting

Close industry observers will remember that the NCAA was one of the named organizations that took New Jersey’s sports betting law all the to the US Supreme Court.

Ultimately, the NCAA lost their case when SCOTUS declared that the Professional and Amateur Sports Protection Act (PASPA) was unconstitutional.

Losing the case did not make the NCAA happy. The pro sports leagues that were the other parties to the case have knuckled down and accepted that sports betting is inevitable.

Each of the big four leagues, the NFL, NBA, MLB and NHL has partnered with a casino group — MGM — or in the case of the NFL, Caesars Entertainment.

The NCAA is still grumbling about the risks that they think sports betting poses to their sports. NCAA President Mark Emmert recently went public with his concerns:

“Sports wagering is going to have a dramatic impact on everything we do in college sports,” Emmert said. “It’s going to threaten the integrity of college sports in many ways unless we are willing to act boldly and strongly.”

The American Gaming Association (AGA) quickly issued a response refuting Emmert’s basic premise:

“Sports wagering is a multibillion dollar, sophisticated enterprise that, if left primarily in the shadows, will continue to threaten competition and bet integrity, tax law enforcement resources and perpetuate the vulnerability of athletes — particularly unpaid amateur athletes — to bad actors in the illegal market.

Only by legalizing and regulating this popular American activity can we offer protection to competition, consumers and competitors, ensure that responsible sports wagering is properly regulated, and that those laws are enforced.”

Caputo’s bill should please the NCAA

The prohibited sports as defined in the original New Jersey sports betting legislation are:

“’Prohibited sports event’ means any collegiate sport or athletic event that takes place in New Jersey or a sport or athletic event in which any New Jersey college team participates regardless of where the event takes place. A “prohibited sports event” does not include the other games of a collegiate sport or athletic tournament in which a New Jersey college team participates, nor does it include any games of a collegiate tournament that occurs outside New Jersey even though some of the individual games or events are held in New Jersey. A prohibited sports event includes all high school sports events, electronic sports, and competitive video games but does not include international sports events in which persons under age 18 make up a minority of the participants.”

In other words, the prohibition directly targets the risks that Emmert points out.

What Caputo has done is submit a bill that gives the prohibition teeth. The consequences of allowing bets on college sports prohibited in the bill are extremely serious.

This should please Emmert.

No doubt, cases like the recent Caesars and Golden Nugget illegal bets spurred the NJ Legislature to make a move. At the time, the two Atlantic City casinos were fined a minimal amount.

But why Caputo?

The bill hits the sweet spot of two of Caputo’s personal interests — education and gambling.

Caputo’s early career began as an elementary schoolteacher. Later this led to his appointment as advisor to the State Commissioner of Education, and service as a superintendent for Essex County schools.

In 1983, he switched into the New Jersey gambling scene.

Caputo took positions as a marketing executive for the now-defunct Atlantic City casino, the Trump Castle Hotel, the Showboat Atlantic City, and the Tropicana.

Joss Wood

About

With a primary focus on international regulated online gambling markets, Joss follows the legal US online gambling industry and writes extensively about US sports betting regulation. He holds an English degree from the University of Birmingham and a master’s degree in organizational development from the University of Manchester.