New Jersey of Challenge of Federal Mandate Raises Public Administration Questions

By Sam Williford, Associate Consultant

Plans by the state of New Jersey announced by Governor Chris Christie yesterday to defy federal law raises some interesting questions about the balance of power between the states and federal government. This standoff however is not about the Affordable Care Act, but about a 1992 federal ban on sports gambling in all but four states (NV, DE, OR, MT).

Atlantic City, only bested by Las Vegas in terms of gambling fame, has been unable to offer patrons sportsbooks, causing it to miss out an a $500 billion industry, according to estimates from Interactive Media Entertainment & Gaming Association. And after five years of consecutive revenue declines that have seen casino intakes fall by almost forty percent, from $5.2 billion in 2006 to $3.3 billion last year.

With so much money at stake, it’s a rare issue that has bipartisan support. A state Democratic Senator, Raymond Lesniak, sued the federal government last year in a bid to have the law squashed that was dismissed. Despite this, the New Jersey legislature and Gov. Christie have pledged to move forward until the federal government makes an effort to stop them.

Due to the legal uncertainty though, no casino has made plans to offer a sportsbook yet, in fear of having gambling licenses in other states revoked, as well as investing money into an endeavor that could be shut down upon a whim. This is a prime example of how poor public administration can create legislative confusion that causes economic uncertainty.

Similar to the challenges to the Affordable Care Act, all parties involved expect this action to lead a battle in federal courts. Despite the power of the federal government, there is still much greyspace as to its relationship to the states.