Stein v. Dep't of Law & Pub. Safety
| Citation | 203 A.3d 160,458 N.J.Super. 91 |
| Decision Date | 06 February 2019 |
| Docket Number | DOCKET NO. A-5589-16T3 |
| Parties | Lewis STEIN, Petitioner-Appellant, v. DEPARTMENT OF LAW & PUBLIC SAFETY, New Jersey Racing Commission, Respondent-Respondent. |
| Court | New Jersey Superior Court – Appellate Division |
Lewis Stein, appellant, argued the cause pro se.
George N. Cohen, Deputy Attorney General, Trenton, argued the cause for respondent (Gurbir S. Grewal, Attorney General, attorney; Melissa Dutton Schaffer, Assistant Attorney General, of counsel; George N. Cohen, Trenton, on the brief).
Michael Vukcevich, Director of Legal Affairs, Trenton, attorney for amicus curiae Darby Development, LLC.
Before Judges Yannotti, Rothstadt and Natali.
The opinion of the court was delivered by
YANNOTTI, P.J.A.D.
Lewis Stein appeals from a final decision of the New Jersey Racing Commission (Commission), which denied his petition for the adoption of an administrative rule allowing New Jersey residents to place wagers with New Jersey's Account Wagering System (AWS) while physically located outside the State. He argues that the Off-Track and Account Wagering Act (the OTAWA or the Act), N.J.S.A. 5:5-127 to -160, does not preclude such wagering. We disagree and affirm.
In 1998, the New Jersey voters approved an amendment to the New Jersey Constitution, which authorized the Legislature to enact "by law, the specific kind, restrictions and control of wagering on the results of live or simulcast running and harness horse races conducted within or outside of this State." N.J. Const., art. IV, § 7, ¶ 2. Thereafter, the Legislature enacted the OTAWA. See N.J.S.A. 5:5-127 to -160.
The OTAWA authorizes the Commission to issue licenses to the New Jersey Sports and Exposition Authority (Authority) to permit off-track wagering at licensed off-track facilities. N.J.S.A. 5:5-130(a). "Off-track wagering," is defined in the Act, as "pari[-]mutuel wagering at an off-track wagering facility as authorized under this act." N.J.S.A. 5:5-129. "Off-track simulcasting" is "the simultaneous audio or visual transmission of horse races conducted at in-State and out-of-State racetracks to off-track wagering facilities and pari[-]mutuel wagering at those off-track wagering facilities on the results of those races." Ibid.
The OTAWA also authorized the Commission to issue a license to the Authority to establish an AWS. N.J.S.A. 5:5-139(a). The Authority is defined in the Act as the "account wagering licensee." N.J.S.A. 5:5-129. The Act states that "account wagering" is "a form of pari[-]mutuel wagering in which an account holder may deposit money in an account with the account wagering licensee and then use the account balance to pay for pari[-]mutuel wagers by the account holder." Ibid. The AWS is "the system through which account wagers are processed." Ibid.
The OTAWA permits New Jersey residents who are at least eighteen years old to establish wagering accounts with the AWS. N.J.S.A. 5:5-142(a). The Act also allows account holders to place wagers with the AWS without having to be physically present at a New Jersey racetrack or New Jersey off-track wagering facility. See N.J.S.A. 5:5-144(e). The account holder may place wagers in person, by telephone, or through other electronic media such as the internet. Ibid.
Lewis is a New Jersey resident who has established a wagering account with the AWS. It appears that while on vacation in Massachusetts, Lewis attempted to place a wager through his AWS account, but he was not permitted to do so because he was not at that time physically located in New Jersey. On August 18, 2016, Lewis wrote to the Commission and asserted that the Act does not preclude him from placing account wagers through the AWS from outside the State. He requested that the Commission cease enforcing this restriction on account wagering.
On August 31, 2016, Frank Zanzuccki, the Executive Director of the Commission, responded to Lewis's letter. He explained that "[a]lthough the Act does not specifically prohibit New Jersey account holders from placing wagers while they are outside New Jersey ... the [L]egislative intent was to create an intrastate wagering system." Zanzuccki noted that since the inception of account wagering in New Jersey, the Commission had "routinely imposed" a condition on the Authority's account wagering license, which precludes the Authority from "knowingly accept[ing] any wager from a New Jersey resident account holder, where that account holder seeks to place such wager while at a physical location outside New Jersey."
In his letter, Zanzuccki also stated that in November 2015, the Commission became aware of the availability of new technology that allows the Authority to identify the geographical source of an account wager. Thereafter, the Commission imposed an additional condition on the Authority's account wagering license, which requires the installation of "advanced geo-location software and controls" in the AWS. Zanzuccki wrote that the purpose of the software was to "ensure that only intrastate wagers are accepted by the account wagering licensee consistent with the requirements of the Act."
On February 23, 2017, Lewis filed a petition with the Commission for rulemaking pursuant to N.J.S.A. 52:14B-4(f). As noted, Lewis sought the adoption of a rule permitting AWS account holders to place wagers with the AWS while temporarily located outside the State. In the alternative, Lewis asked the Commission to "declare" that is permissible for New Jersey resident AWS account holders to open wagering accounts with account-wagering systems operated in other states or nationally, for use while the account holder is located outside of New Jersey.
At its April 21, 2017 meeting, the Commissioner referred the matter for further deliberations for an additional period, not to exceed ninety days. See 49 N.J.R. 1261(a) (May 15, 2017). On May 15, 2017, the Commission published notice of the petition in the New Jersey Register. See ibid.
By letter dated July 14, 2017, Michael Vukcevich, Director of Regulatory Affairs for Darby Development, LLC (Darby), commented on Stein's petition. He noted that Darby "manages the business affairs of the [AWS], and also serves as management agent [for] the New Jersey Thoroughbred Horsemen's Association, Inc." in its racing-related interests. Vukcevich also noted that in December 2016, the Commission had authorized the continuation of account wagering in 2017, but "as in prior years imposed a prohibition against the accept[ance] of account wagers from resident account holders while outside New Jersey."
Vukcevich stated that Darby "continue[d] to maintain that this restriction makes no sense legally or practically, and should be revisited as it [has a negative impact upon] the business interests of the [AWS] and interested industry participants." According to Vukcevich, because of the restriction, many "of our patrons ... establish[ ] permanent wagering accounts, through out-of-state operators," and this "provides no benefit to our racing industry." He stated that this has resulted in the loss of customers and revenues "which would otherwise inure to the benefit of" the State.
On July 18, 2017, John Hindman, Senior Vice President and General Counsel of ODS Technologies, L.P., d/b/a TVG Network (TVG) wrote to the Commission and joined in Darby's comments. Hindman stated that TVG provides the AWS with account wagering services. He asserted that the restriction on out-of-state access to the AWS causes customer frustration, and has resulted in significant business losses for the system. Hindman stated that TVG is concerned that the "restriction unduly hinders New Jersey racing interests from providing customers with a competitive product and customer experience."
At its meeting on July 19, 2017, the Commission considered Stein's petition. Zanzuccki stated that the Commission had received legal advice in executive session and, based on that advice, the petition should be denied. He asserted that adoption of the proposed rule "would be inconsistent with existing law[,] which requires" that the AWS "be an intra-state system only."
Stein then addressed the Commission. He said no provision in the Act prohibits account holders from placing wagers with the AWS while located outside the State.
Zanzuccki responded by stating that the Commission was required to comply with the law, "as we know it and understand it." Vukcevich also addressed the Commission. He said the Commission should proceed with the rule-making process, since that would allow members of the public and the racing industry to comment on the restriction.
The Commission voted to deny the petition. By letter dated July 24, 2017, Zanzuccki informed Stein that the Commission had denied his petition "based upon legal advice." Thereafter, the Commission published notice of its action in the New Jersey Register. See 49 N.J.R. 2817(a) (Aug. 21, 2017). This appeal followed. We thereafter granted Darby's motion for permission to appear as amicus curiae.
On appeal, Stein argues that the Commission erred by denying his petition. He contends the Commission has the authority under the OTAWA to adopt a rule allowing account holders to place wagers with the AWS while the account holders are located out of State.
We note initially that appellate review of a final decision of an administrative agency is limited. In re Stallworth, 208 N.J. 182, 194, 26 A.3d 1059 (2011) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579, 410 A.2d 686 (1980) ). An agency's final decision will be upheld "unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record." J.B. v. N.J. State Parole Bd., 229 N.J. 21, 43, 159 A.3d 1267 (2017) (quoting In re Herrmann, 192 N.J. 19, 27-28, 926 A.2d 350 (2007) ).
"In determining whether [an] agency['s] action is arbitrary, capricious, or unreasonable," we consider:
To continue reading
Request your trial
-
JSTAR, LLC v. N.J. Dep't of Envtl. Prot.
...followed.II. At the outset, we observe that our review of a final administrative agency decision is limited. Stein v. Dep't of Law & Pub. Safety, 458 N.J. Super. 91, 99 (App. Div.) (citing In re Stallworth, 208 N.J. 182, 194 (2011)), cert. denied, 238 N.J. 425 (2019). We will uphold an agen......
-
Thompson v. Bd. of Trs., Judicial Ret. Sys.
...showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record." Stein v. Dep't of Law & Pub. Safety, 458 N.J. Super. 91, 99 (App. Div. 2019) (quoting J.B. v. N.J. State Parole Bd., 229 N.J. 21, 43 (2017)). Nor will we overturn an agency decision mere......
-
In re Simpson
...hearing. We reject both these arguments. Our review of a final administrative agency decision is limited. Stein v. Dep't of Law & Pub. Safety, 458 N.J. Super. 91, 99 (App. Div. 2019) (citing In re Stallworth, 208 N.J. 182, 194 (2011)). We will "uphold an agency's decision 'unless there is a......
-
Coaxum v. Bd. of Trs.
...denial of ADRB. When evaluating final administrative agency decisions, our review is limited. Stein v. Dep't of L. & Pub. Safety, 458 N.J.Super. 91, 99 (App. Div. 2019) (citing In re Stallworth, 208 N.J. 182, 194 (2011)). We uphold an agency's decision "unless there is a clear showing that ......