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Politics may be behind Christie's Internet gaming change of heart

With his political stock rising, Gov. Christie may again be backing off on approving Internet gaming, and has delayed action that would free New Jersey from a federal ban on sports betting, says the Democrat who sponsored both measures in the Legislature in the hope they would boost Atlantic City.


With his political stock rising, Gov. Christie may again be backing off on approving Internet gaming, and has delayed action that would free New Jersey from a federal ban on sports betting, says the Democrat who sponsored both measures in the Legislature in the hope they would boost Atlantic City.

"Christie is putting the future of A.C. in jeopardy because of his overriding concern for support from [Sheldon] Adelson, a right-wing money machine of Newt Gingrich and right-wing causes; Caesars, a huge contributor based in Nevada; and Woody Johnson, Jets owner and NFL opponent of sports gaming," Sen. Raymond Lesniak (D., Union) wrote last week in an e-mail, not long after a meeting with Christie's staff.

Exactly six months ago, on Nov. 8, a ballot measure to amend New Jersey's constitution to allow sports wagering at Atlantic City casinos and state race tracks passed by a 2-1 ratio.

In January, the Legislature passed a bill to let casinos and tracks offer sports betting if a federal ban were lifted. Christie signed the bill Jan. 17.

Around that time, Christie signaled that he had come around on Internet gambling as well after the U.S. Justice Department reversed its long-standing position by stating that the Wire Act of 1961 did not apply to Internet gaming.

But that, too, now appears to be on hold, prompting some to question whether presidential politics is to blame.

Christie's press secretary, Michael Drewniak, on Monday said: "Democrats criticize us for everything, so what else is new? I don't feel the need to weigh in at this moment." Both houses in Trenton are controlled by Democrats.

Assemblyman Chris A. Brown (R., Atlantic), whose district includes Atlantic City, said he was unaware of any shift in the governor's position.

"It is my understanding that Gov. Christie supports intrastate Internet gaming," said Brown, who serves on the Assembly Consumer Affairs, Tourism and Arts Committee. "Namely, he wants to make sure we get it right.

"Obviously, this is a great opportunity for New Jersey to create new jobs and new economic activity."

But Lesniak and some others see links that they say could explain why the Republican governor may want to hold off, at least until after the November elections.

Christie is being touted as a running mate to presumptive Republican presidential nominee Mitt Romney or for other possible plum jobs should Romney win the White House.

Lesniak said he believed Christie did not want to offend billionaire Adelson, Las Vegas Sands Corp.'s chairman and chief executive, who adamantly opposes online wagering and gave more than $21 million to Gingrich's abortive GOP presidential campaign. Gingrich dropped out Wednesday, and Romney may now be courting Adelson's support.

"You don't want a casino in every home," Adelson said in a recent interview with the Las Vegas Sun. He said online gaming would result in a 10 to 20 percent decrease in land-based casino revenue.

Asked if he was looking to support another GOP presidential candidate, "Mr. Adelson does not comment on his political activities," company spokesman Ron Reese said.

Christie has campaigned vigorously for Romney, a former Massachusetts governor, and for Wisconsin Republican Gov. Scott Walker, who counts Adelson as one of his biggest donors.

Lesniak said he concluded during a meeting on April 27 including himself, State Sen. James Whelan (D., Atlantic), and members of Christie's policy and legal staffs - Lou Goetting, Nick DiRocco and Bob Garinger - that the governor was not yet sold on I-gaming.

The North Jersey Democrat spent months tweaking his original bill, which would have allowed Internet gaming only from servers at Atlantic City casinos. Christie vetoed it last year, citing concerns that the activity could not be properly regulated.

"We were told ... that the Atlantic City casinos have not made the case that Internet gaming is good for them," Lesniak said of the 10-minute meeting with Christie's aides. "Sen. Whelan and I were stunned. We were led to believe that there were only technical issues to clear up."

Whelan, who backed Lesniak's account of the meeting, added, "Again, from the front office, I got mixed signals."

The revised online-gaming bill passed a Senate committee last month and was slated for a floor vote by the end of the month. An Assembly version has yet to be heard in committee.

Supporters say online wagering and sports betting could help the seaside resort, which has been hammered by regional casino competition.

In summer 2010, Christie announced the creation of a state-run tourism district in Atlantic City to help revitalize the resort. He signed off on several legislative changes to ease regulations to make it easier for developers and approved $261 million in state tax credits to complete the $2.4 billion Revel casino.

"Atlantic City casino revenues have declined 29 of the 30 months since Gov. Christie's been in office," Lesniak said. "Internet gaming will add $200 million a year to their revenues, and likely will make the difference between some closing or staying open and saving hundreds of jobs."

Sports wagering is expected to generate $225 million in new revenue for the casinos and tracks, but openly supporting sports betting now could be just as problematic for the Republican governor.

Christie is known to be close friends with Robert Wood "Woody" Johnson, owner of the New York Jets. The governor was seen on TV sitting next to Johnson in the owner's box during a Jets game against the New York Giants last year at the Meadowlands.

Johnson wrote a $2,500 check to Romney's primary campaign, according to data from the Federal Election Commission and the Center for Responsive Politics in Washington, which tracks campaign contributions.

Johnson did not respond to an e-mail seeking comment on his relationship with Christie or whether he was urging the governor to back off on permitting sports betting.

The federal Professional and Amateur Sports Protection Act of 1992 limits sports wagering to four states: Nevada, Oregon, Montana, and Delaware. The NFL opposes any expansion.

After Garden State residents approved the question, Lesniak said, Christie could have filed a declaratory judgment action, or started the regulatory and licensing process to force the Justice Department or the professional sports leagues to file suit to stop it. He's done neither.

Legal experts say the delays on both fronts could be detrimental to Atlantic City.

"Neither one is a clear panacea for Atlantic City's troubles," said Stephen D. Schrier, head of the gaming practice at Blank Rome L.L.P. in Princeton. "In both cases, however, the further delay gives the impression that New Jersey is not as serious about these new options, and negatively impacts the recovery sought for Atlantic City."

Congress and other states are currently debating whether to legalize Internet gaming.

Said Joe Brennan Jr. of IMEGA, an online-gaming association: "One of the ways to recapture this [gaming] revenue going across state lines is to offer it online in-state as a competing product. If New Jersey continues to lag in passing this legislation, they're giving up the opportunity to become the Silicon Valley of the online gaming industry in the United States."

Lawyer Michael Sklar, who represents several Atlantic City casinos, said his clients were eager to offer it.

"From the perspective of first-to-market, it's a big deal to get in there and get established because it's inevitable that a lot of other states will legalize it as well," he said.

But it may not be that simple for Christie.

As one Internet gaming industry insider - who has lobbied the governor's office and asked not to be named out of fear of repercussions - put it: "If two of your biggest donors don't like what you're selling, you delay the sale."