TRENTON — In the late 1970s, shortly after New Jerseyans voted to allow casinos in Atlantic City, state lawmakers and officials put legislation in place to tightly monitor and regulate the gambling there.

It was called the Casino Control Act, and one of its goals was to keep organized crime out of the business.

"The whole premise was that people in New Jersey approved gambling because they had confidence the regulatory process would be in charge," said Steven Perskie, the former state lawmaker who helped write the law. "Casinos would not have a complete free hand."

But nearly 40 years later, some critics are worried that the latest effort by Gov. Chris Christie’s administration and state lawmakers to legalize sports betting in New Jersey is flying in the face of those longstanding laws — and may open the door for organized crime to seep into Atlantic City’s casinos.

EDITORIAL: Coming soon to a casino near you: Mob rule
At the crux of the issue are legal papers the state filed in federal court last week. For years, Christie and lawmakers have tried to legalize sports betting in an effort to revitalize New Jersey’s struggling casino and racetrack industries, but they’ve been stifled by a 1992 federal law that bans such wagering in all but four states. Now, they believe they’ve found a loophole.

The ban, they say, prohibited New Jersey only from sanctioning sports betting. Nothing, they argue, prevents them from making it legal for private racetracks and casinos to allow bets as long as they are not licensed or regulated by the state.

Four professional sports leagues and the NCAA have sued to stop that plan from taking effect, saying the move still violates the ban. But the new legal papers stress that New Jersey will have "no say in whether sports wagering will or will not occur in the places where it is legal, and no role in sports wagering, regulatory or otherwise, should it occur."

Thus, unlike the casinos they’d be located in, sports betting operators would not be subject to the regulations of the Casino Control Act. They would not need to receive a license to set up shop. They would not be monitored by the state. And while other casino employees would be required to undergo background checks, those involved with sports wagering would not.

That bothers Edwin Stier, a former state and federal prosecutor who led New Jersey’s largest effort to root out organized crime.

"I don’t care if it’s being done by casino industries or racetracks or corner bodegas," said Stier, a former member of the U.S. Attorney’s office in New Jersey and the head of the state’s Division of Criminal Justice. "If it’s unregulated, that means there is no one policing it.

"And I can tell you," he added. "Organized crime is attracted to gambling as a business. If it’s unregulated, they’ll find a way to exploit it. There seems to be a contradiction between the way we’ve approved controlling casino gambling and the way we’re talking about operating sports bookmaking."

But state Sen. Raymond Lesniak (D-Union) — the lawmaker who has led the charge to legalize sports betting — scoffed at that idea. He noted that the state can trust casinos to have their own vetting and regulating process.

"This is not ‘The Godfather’ where the casino industry is just starting up," Lesniak said. "These businesses have their own integrity to protect."

He also stressed that the state currently loses millions of dollars a year to illegal sports betting operations that are often run by organized crime. Last month, he noted, the state broke up an illegal wagering ring allegedly overseen by the notorious Genovese crime family.

"This is taking sports betting out of the hands of organized crime and putting it into the hands of legitimate businesses," Lesniak said.

Christie’s office and the state Attorney General’s office did not return messages seeking comment.

CASINO CONTROL ACT
New Jersey voters approved casino gambling in 1975. Two years later, then-Gov. Brendan Byrne signed the Casino Control Act and issued a warning to the mob. "Keep your filthy hands off Atlantic City," he said. "Keep the hell out of our state."

Stier, who helped write the regulations, called them "the most comprehensive regulatory system in the world."

"The casino industry has operated pretty cleanly in New Jersey as a result of that," he said.

In 2011, New Jersey voters approved a referendum question to legalize sports betting. Christie signed it into law a year later, but the sports leagues sued to prevent it, saying it would violate the federal ban and hurt the integrity of their sports.

Both a federal district court and a federal appeals court sided with the leagues, and the U.S. Supreme Court declined to take up the case.

But Lesniak noted that the appeals court said in its ruling that nothing prevented New Jersey from repealing old state laws banning sports betting. Thus, he introduced a bill that allowed for such wagering without state regulation. The state Legislature fast-tracked the measure, and Christie signed it into law last month.

The sports leagues sued again, saying the move is a "de-facto authorization" of sports wagering because the state already heavily regulates casinos and tracks. A judge also granted their request for a temporary restraining order to prevent Monmouth Park from becoming the first venue in New Jersey to take bets on sports games.

New Jersey officials repeatedly said in last week’s legal papers that they will be completely hands-off. Leaders of the state Department of Gaming Enforcement, the state Casino Control Commission, and the New Jersey Racing Commission wrote affidavits stressing they won’t enforce their usual regulations for sports betting operations.

"The fact that the state issues licenses to barbers hardly means that the other non-barbering activities taking place in the barber shop (e.g., conversation) are being conducted ‘under the auspices’ of the barbering license," the papers say.

Lloyd Levenson, an Atlantic City attorney who represents casinos, called any idea that the mob will get involved "a scare tactic" and "hyperbole to the extreme." He noted that casinos have already been thoroughly investigated by the state, do their own vetting of employees, and will work with respected professional sports betting companies that have been operating legally in places like Las Vegas and Europe.

"If you can’t trust these people to operate a clean business, you might as well not trust a bank to run a clean business," Levenson said. "There’s no reason to suspect casinos or racetracks will allow the infiltration of organized crime."

Gary Thompson, a spokesman for Caesars Entertainment, said the company’s Atlantic City casinos — Caesars, Bally’s, and Harrah’s — are waiting until the case is settled in court before they open any sports betting operations.

"(But) we’ve had sports betting operations in Nevada and have had no issues with organized crime," Thompson said.

Dennis Drazin, an attorney for Monmouth Park, said the track also plans to form a private regulatory body to write rules and regulations governing the wagering. He said the operators have reached out to other tracks and casinos to be involved.

But Stier said he’s suspicious.

"I would question how you can be certain they will behave scrupulously," he said. "What’s their incentive?"

LOBBYING CONGRESS?
Perskie, the former lawmaker who is now a private attorney, said he supports sports wagering in New Jersey. But discussing whether organized crime will be an issue is a moot point, he added, because he believes the state doesn’t have the legal power to do any of this. He stressed that the Casino Control Act requires the state to authorize any games that a casino can offer.

"That’s black and white," said Perskie, a former member of the state Assembly and state Senate who went on to become a Superior Court judge, former Gov. Jim Florio’s Chief of Staff, and a state Superior Court judge. "And Congress said that states can’t approve sports betting. So there’s your problem."

Perskie suggested that state lawmakers lobby Congress to change the federal ban — even though that might be a challenge.

"Congress can’t pass a law that says Tuesday follows Monday," he said "They are completely paralyzed. But as a lawyer, that is the only place to get relief."

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