E-Sports Betting - A New Addition to the Sports Betting Menu in New Jersey  
Update provided by C.J. Fisher, Partner and Harry S. Jackson III, Associate in the Gaming Department at Fox Rothschild

The New Jersey Division of Gaming Enforcement (“DGE”) welcomed its first bet placed on a video game competition on November 7, 2019, opening the door to esports betting in New Jersey.  The DGE granted approval for New Jersey casinos and racetracks, and their operators, to include the League of Legends championship among their sports betting offerings.  The championship match was held in Paris, France on Sunday, November 10.  15,000 spectators, and many more watching online, tuned in to watch FunPlus Pheonix defeat G2 Esports in a best of 5 series.

The DGE announced its decision to allow betting on the League of Legends championship on Wednesday, November 6, and stipulated that customers were not allowed to bet more than $1,000 and that in-play betting was not permitted.  By Friday, sportsbooks in New Jersey set lines and fixed prices on the match, offering options for in-state bettors to place wagers in-person at a brick and mortar casino or online. Several New Jersey casinos and online sportsbooks offered wagers and posted lines on the League of Legends championship match, including overall winner and individual map/round winners.

False Start – A Lesson in Legislation Drafting and Interpretation 
When New Jersey led the charge to overturn the Professional and Amateur Sports Protection Act of 1992, it was ready with legislation aimed to get sports betting up and running as quickly as possible pending a favorable result in the Supreme Court.  The legislation defined a “prohibited sports event” as including “all high school sports events, electronic sports, and competitive video games . . .” See N.J.S.A. 5:12A-10.  Interpreting each comma as a separate prohibited event, some interpreted the legislation as prohibiting each of the following: 1) high school sports events; 2) electronic sports; and 3) competitive video games.

The DGE, however, clarified its interpretation of the legislation and “prohibited sports events” through its regulations.  Specifically, the DGE clarified “prohibited sports events” pursuant to N.J.A.C. 13:69N-1.1, which defines a “prohibited sports event” to include “all high school sports events, including high school electronic sports events and high school competitive video game events, and any electronic sports event in which any participant is 17 years old or younger.”  Further, a permissible “sports event” was defined to include “all professional electronic sports and competitive video game events that are not sponsored by high schools, do not include high school teams, and do not include any participant under the age of 18 years.”

Game Over. Play Again? 
The DGE’s recent approval of esports betting was limited to the League of Legends championship.  If a sportsbook wants to offer another esports competition or event, it must first request permission from the DGE before adding the event to its book.  However, the precedent has now been set for the DGE to approve wagering on future esports events in New Jersey and the door is open to a new division of sports betting in the Garden State.  

C.J. Fisher is a partner and Harry S. Jackson III is an associate in the Gaming Department of Fox Rothschild LLP. They can be reached at [email protected] or [email protected]