Call it a $2.3 million gamble. That’s how much taxpayers are shelling out for state and international law firms that employ some of the biggest names in the legal world to argue New Jersey’s case to allow sports betting at casinos and race tracks, documents obtained by The Star-Ledger show.
It’s a big hand but the stakes are huge. Analysts say sports betting could generate more than $100 million a year for state coffers.
Supporters say it is a prize well worth pursuing, even if the odds of legalizing sports betting are getting longer.
“We all went into this with eyes wide open that it was going to be an extended legal fight against some well-funded interests,” said Michael Drewniak, a spokesman for Gov. Chris Christie. “We went into this knowing it would be costly … This is what it costs to take a constitutional matter to the Supreme Court.”
The Christie adminsistration spent about $1.8 million on legal fees in the case, while leaders of the state Legislature forked over another $525,385.
By contrast, the Christie administration spent no money on outside counsel in its unsuccessful fight against a lawsuit to legalize gay marriage in New Jersey.
In 2011, New Jersey voters passed a referendum to allow sports betting, and the Legislature quickly passed it into law. There’s just one major problem: A 1992 federal law bans it in all but four states.
The NCAA and the nation’s largest sports leagues sued — and so far, they’re winning. In September, a federal appeals court in Philadelphia sided with the leagues. Now, the state’s only option is the U.S. Supreme Court, which isn’t required to hear the case.
“A couple million people in New Jersey went to the polls and voted in favor of this,” Drewniak said. “That’s what we’re doing. We’re obligated.”
The Christie administration hired the law firm Gibson, Dunn & Crutcher, which assembled a massive team for the case, according to records obtained through the state’s Open Public Records Act. Nineteen of the firm’s partners and 16 of its associates worked a combined 4,353 hours as of Oct. 21, billing the state more than $1.62 million. In addition, the state spent another $183,943 on the firm’s court fees, research, travel and other expenses.
One of the nation’s most prominent attorneys, Theodore Olson — a former U.S. solicitor general who represented George W. Bush during the 2000 Florida presidential recount — has worked 314 hours on the sports betting case.
The lawyer who’s done the most work is Robert E. Johnson, a young associate. Johnson, a former editor of the Harvard Law Review, billed 594 hours.
And one attorney’s name really sticks out. Eugene Scalia, the son of U.S. Supreme Court Justice Antonin Scalia, worked 11 hours on the case.
Five state-employed lawyers have also worked a combined 648 hours on sports betting. Based on their salaries, they’ve done about $31,000 worth of work.
In addition, the state Senate has its own lawyers on the case from the Newark-based Gibbons P.C., spending $525,385, according to Senate Democrats. The top lawyer representing Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Sheila Oliver (D-Essex) is Michael Griffinger, who has 40 years experience litigating in state and federal court.
State Sen. Shirley Turner (D-Mercer) — one of just two senators who voted against allowing sports betting — said all that money would be better spent on other budget priorities.
“We stand to lose a lot of money. That could be used for a lot better purpose than trying to go to the Supreme Court when the odds are so slim,” Turner said. “Why they don’t spend that money (gambling) in Atlantic City or Las Vegas then? They’d probably have a better shot.”
But state Sen. Raymond Lesniak (D-Union), who spearheaded the effort to get sports betting in New Jersey, called it an “investment” because “the value of winning is priceless.”
“We’re talking about billions of dollars streaming into the economy and thousands and thousands of jobs,” said Lesniak, who conceded his initial thought that “it was going to be a relatively easy win … hasn’t turned out to be quite true.”
Robert Shore, an analyst at Union Gaming Group, said that sports betting accounts for about $72 million in Nevada’s gaming revenue each year — not counting money it generates through increased tourism. But in New Jersey, Shore said, it would likely produce well over $100 million a year, he said.
“I definitely think New Jersey would be better than Las Vegas for sports betting because you have so many rabid sports fans throughout the northeast,” Shore said. “I think it would be a game changer. It would definitely be a huge opportunity, if it ever happened.”
But Shore said that if New Jersey does manage to legalize sports betting, neighboring states would probably try to get in on the action, too, reducing the Garden State’s share of the pie.
“With gaming in general, there’s a domino effect,” Shore said. “States don’t want to lose out on the revenue opportunities.”
In the same-sex marriage case, the Christie adminsitration relied solely on its own staff to fight a lawsuit from gay rights groups and a number of gay couples who wished to get married.
A total of 18 staff members of the Department of Law and Public Safety worked 1,801 hours on that case, spending the equivalent of $103,776 in staff time, the records show.
The case — from a lawsuit filed in 2011 — ended in October, when Christie dropped his appeal of a Superior Court judge’s decision that sided with the gay couples after the state Supreme Court all but said it would rule that way as well. Gay marriages have since been allowed in New Jersey.
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