NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5589-16T3

LEWIS STEIN,

Petitioner-Appellant,

v.

DEPARTMENT OF LAW & PUBLIC

SAFETY, NEW JERSEY RACING

COMMISSION,

Respondent-Respondent.

____________________________________

Argued January 23, 2019 – Decided February 6, 2019

Before Judges Yannotti, Rothstadt and Natali.

On appeal from the Department of Law & Public 

Safety, New Jersey Racing Commission.

Lewis Stein, appellant, argued the cause pro se.

George N. Cohen, Deputy Attorney General, argued 

the cause for respondent (Gurbir S. Grewal, Attorney 

General, attorney; Melissa Dutton Schaffer, Assistant 

Attorney General, of counsel; George N. Cohen, on 

the brief).

Michael Vukcevich, Director of Legal Affairs, 

attorney for amicus curiae Darby Development, LLC.

APPROVED FOR PUBLICATION

February 6, 2019

APPELLATE DIVISION
A-5589-16T3 2

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. 

I.

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 
A-5589-16T3 3

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 offtrack 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.
A-5589-16T3 4

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 
A-5589-16T3 5

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 geolocation 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 
A-5589-16T3 6

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 
A-5589-16T3 7

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). 
A-5589-16T3 8

This appeal followed. We thereafter granted Darby's motion for permission to 

appear as amicus curiae. 

II.

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 (2011) 

(quoting Henry v. Rahway State Prison, 81 N.J. 571, 579 (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 (2017) (quoting In re 

Herrmann, 192 N.J. 19, 27-28 (2007)).

"In determining whether [an] agency['s] action is arbitrary, capricious, or 

unreasonable," we consider: 

(1) whether the agency's action violates express or 

implied legislative policies . . .; (2) whether the record 

contains substantial evidence to support the findings 

on which the agency based its action; and (3) whether

in applying the legislative policies to the facts, the 

agency clearly erred in reaching a conclusion that 

could not reasonably have been made on a showing of 

the relevant factors.
A-5589-16T3 9

[In re Stallworth, 208 N.J. at 194 (quoting In re 

Carter, 191 N.J. 474, 482-83 (2007)).]

When considering these criteria, the court must give "substantial 

deference to the agency's expertise and superior knowledge of a particular 

field." In re Herrmann, 192 N.J. at 28 (citing In re License Issued to Zahl, 186 

N.J. 341, 353 (2006); Brady v. Bd. of Review, 152 N.J. 197, 210 (1997); 

Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)). We are

not bound, however, "by [an] agency's interpretation of a statute or its 

determination of a strictly legal issue." Lavezzi v. State, 219 N.J. 163, 172 

(2014) (alteration in original) (quoting Norfolk S. Ry. Co. v. Intermodal 

Props., LLC, 215 N.J. 142, 165 (2013)). We review an agency's legal 

conclusions de novo. Ibid.

It is well-established that the court's role in interpreting a statute is to 

ascertain the intent of the Legislature, and the best indicator of legislative 

intent is the language of the statute. DiProspero v. Penn, 183 N.J. 477, 492 

(2005) (citing Frugis v. Bracigliano, 177 N.J. 250, 280 (2003)). We must give 

the statutory language its "ordinary meaning and significance." Ibid. (citing 

Lane v. Holderman, 23 N.J. 304, 313 (1957)). "If the [statute's] plain language 

leads to a clear and unambiguous result, then [the] interpretative process is 

over." Spade v. Select Comfort Corp., 232 N.J. 504, 515 (2018) (quoting 

Johnson v. Roselle EZ Quick LLC, 226 N.J. 370, 386 (2016)). 
A-5589-16T3 10

As noted, Stein argues that the OTAWA does not expressly prohibit 

account holders from placing wagers with the AWS from locations outside of 

New Jersey. We disagree. The Act provides, "[a] person shall not place an 

account wager from within this State except in accordance with this act 

through the account wagering licensee, and no entity, other than the account 

wagering licensee, shall accept an account wager from a person within this 

State." N.J.S.A. 5:5-142(a) (emphasis added). The Act further provides that 

"[a]ll persons accepting account wagers on behalf of the account wagering 

licensee shall do so at a location within this State." N.J.S.A. 5:5-142(l) 

(emphasis added). 

We are convinced that these statutory provisions make clear the 

Legislature intended to limit the placement and acceptance of account wagers 

from account holders who are "within this State." The repeated use of the 

phrase "within this State" in N.J.S.A. 5:5-142(a) and (l) shows that the 

Legislature intended to establish an account wagering system, conducted 

within this State, by New Jersey resident account holders who are physically 

present here. The Commission correctly determined that the Legislature 

intended the AWS to be an "intra-state" system of wagering. 

Furthermore, as Zanzuccki explained in his letter to Stein dated August 

31, 2016, the Commission has followed this interpretation of the Act 
A-5589-16T3 11

consistently since the establishment of the AWS. An agency's interpretation of 

a statute is not binding on the court, but it is entitled to "substantial deference" 

where, as here, "the Legislature has entrusted the agency with" responsibility 

for the statute's enforcement. See Miah v. Ahmed, 179 N.J. 511, 524 (2004) 

(citing Matturri v. Bd. of Trs. of the Judicial Ret. Sys., 173 N.J. 368, 381 

(2002)). 

Darby argues, however, that other provisions of the Act indicate that the 

Legislature never intended to bar New Jersey resident account holders from 

placing wagers with the AWS while physically located outside the State. In 

support of this argument, Darby cites N.J.S.A. 5:5-144, which states that an 

"account wagering licensee may accept account wagers only from" New Jersey 

residents and "only" in the following manner: 

a. The account wager shall be placed directly with the 

account wagering licensee by the holder of the 

wagering account.

b. The account holder placing the account wager shall 

provide the licensee with the correct personal 

identification number of the holder of the wagering 

account.

c. A licensee may not accept an account wager, or 

series of wagers, in an amount in excess of funds on 

deposit in the wagering account of the holder placing 

the wager. . . .

d. Only the holder of the wagering account shall place 

an account wager. Unless otherwise approved by the 
A-5589-16T3 12

[C]omission, no person, corporation or other entity 

shall directly or indirectly act as an intermediary, 

transmitter or agent in the placing of wagers for a 

holder of a wagering account; provided, however, that 

the use of credit or debit cards specifically approved 

by the licensee or the use of checks, money orders or 

negotiable orders of withdrawal or the use of 

telephonic, computer or electronic means by the 

account holder to place such wagers shall not be 

prohibited. 

The conditions in N.J.S.A. 5:5-144 are, however, not the only conditions 

established for the placement of account wagers with the AWS. As we have 

explained, N.J.S.A. 5:5-142(a) provides that account holders may only place 

wagers "from within this State." Moreover, N.J.S.A. 5:5-142 requires account 

holders to be New Jersey residents, who are at least eighteen years old, and 

establishes other conditions for the establishment of wagering accounts. 

Darby also cites N.J.S.A. 5:5-142(k), which states: "For the purposes of 

this act and notwithstanding any other law to the contrary, all messages or 

orders to place account wagers received by the licensee on behalf of a 

participating permit holder shall be deemed made to a place within this State." 

Darby interprets this statute to mean that any account wager placed by an 

account holder while located outside New Jersey will be deemed to have been 

"made to a place within this State." 

The statute does not, however, refer to wagers by account holders. It 

refers to "wagers received by the licensee on behalf of a participating permit 
A-5589-16T3 13

holder." See ibid. As noted previously, under the OTAWA, the licensee is the 

Authority. N.J.S.A. 5:5-129. In addition, the Act defines the term "permit 

holder" as "the holder of an annual permit to conduct a horse race meeting 

issued by the [C]ommission." Ibid. Therefore, N.J.S.A. 5:5-142(k) applies to 

a limited category of wagers, and cannot be interpreted as a declaration that all 

wagers placed by account holders while located outside New Jersey are 

deemed to have been "made to a place within this State." 

In responding to Stein's appeal, the Attorney General also notes that the 

OTAWA should be interpreted in accordance with relevant provisions of 

federal law, including the Interstate Horseracing Act of 1978 (IHA), 15 U.S.C. 

§§ 3001 to 3007. The IHA was enacted "to regulate interstate commerce with 

respect to wagering on horseracing, in order to further the horseracing and 

legal off-track betting industries in the United States." 15 U.S.C. § 3001(b). 

Among other things, the IHA provides that the states "have the primary 

responsibility for determining what forms of gambling may legally take place 

within their borders." 15 U.S.C. § 3001(a)(1). 

The IHA also provides that: "in the limited area of interstate off-track 

wagering on horseraces, there is a need for Federal action to ensure states will 

continue to cooperate with one another in the acceptance of legal interstate 
A-5589-16T3 14

wagers." 15 U.S.C. § 3001(a)(3). The IHA defines an "interstate off-track 

wager" as 

a legal wager placed or accepted in one State with 

respect to the outcome of a horserace taking place in 

another State and includes pari-mutuel wagers, where 

lawful in each State involved, placed or transmitted by 

an individual in one State via telephone or other 

electronic media and accepted by an off-track betting 

system in the same or another State, as well as the 

combination of any pari-mutuel wagering pools[.]

[15 U.S.C. § 3002(3).]

Thus, under the IHA, a legal wager may be placed in one state via telephone or 

other electronic media, and accepted by the off-track betting system in another 

state if the wagering is "lawful in each [s]tate involved," see ibid., and the 

consent required under 15 U.S.C. § 3004 is obtained. 

The IHA therefore allows New Jersey to authorize account holders to 

place wagers with the AWS while physically located outside New Jersey if the 

state where the wager is placed permits such wagering. However, in the 

OTAWA, the Legislature chose to establish an intra-state account wagering 

system, which is available only to qualifying New Jersey residents when they 

are physically located in this State. 

By doing so, the Legislature relieved the Authority of the responsibility 

for determining whether an account holder is placing the wager from a stat e 

where such wagering is legal. In view of the number of states from which 
A-5589-16T3 15

such wagers could be placed, the Legislature's decision to establish an intrastate system of account wagering was reasonable. 

As noted previously, in his petition, Stein asked the Commission to 

declare that it is the policy of this State that New Jersey residents may open 

wagering accounts with account-wagering systems in other states or nationally, 

which the account holders can use while located outside of New Jersey. The 

Commission did not expressly discuss this request, and on appeal Stein has not 

presented any arguments specifically addressing this issue. Suffice it to say, 

however, there is no provision in the OTAWA which supports the declaration 

of such a policy. 

We accordingly conclude that the Commission did not err by denying 

Stein's petition for rulemaking. The Commission's determination that New 

Jersey's AWS is an intra-state system, available only for wagering by New 

Jersey residents while located within this State, is consistent the relevant 

provisions of the OTAWA. The Commission's decision is not arbitrary, 

capricious, or unreasonable. 

III.

Stein further argues that if the OTAWA is interpreted to preclude 

account holders from placing wagers with the AWS while located outside of 
A-5589-16T3 16

New Jersey, the Act violates the Commerce Clause of the United States 

Constitution. Again, we disagree.

"It has long been accepted that the Commerce Clause not only grants 

Congress the authority to regulate commerce among the States, but also 

directly limits the power of the States to discriminate against interstate 

commerce." New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273 (1988) 

(citing Hughes v. Oklahoma, 441 U.S. 322, 326 (1979); H. P. Hood & Sons, 

Inc. v. Du Mond, 336 U.S. 525, 534-35 (1949); Welton v. Missouri, 91 U.S. 

275 (1876)). "This 'negative' aspect of the Commerce Clause prohibits 

economic protectionism–that is, regulatory measures designed to benefit instate economic interests by burdening out-of-state competitors." Id. at 273-74 

(citing Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 270-73 (1984); H. P. 

Hood & Sons, 336 U.S. at 532-33; Guy v. Baltimore, 100 U.S. 434, 443 

(1880)).

"[I]n all but the narrowest circumstances, state laws violate the 

Commerce Clause if they mandate 'differential treatment of in-state and out-ofstate economic interests that benefits the former and burdens the latter.'" 

Granholm v. Heald, 544 U.S. 460, 472 (2005) (quoting Or. Waste Sys., Inc. v. 

Dep't of Envtl. Quality of Or., 511 U.S. 93, 99 (1994)). However, "[w]here [a] 

statute regulates evenhandedly to effectuate a legitimate local public interest, 
A-5589-16T3 17

and its effects on interstate commerce are only incidental, it will be upheld 

unless the burden imposed on such commerce is clearly excessive in relation to 

the putative local benefits." Philadelphia v. New Jersey, 437 U.S. 617, 624 

(1978) (quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)). "The 

crucial inquiry, therefore, must be directed to determining whether [the statute] 

is basically a protectionist measure, or whether it can fairly be viewed as a law 

directed to legitimate local concerns, with effects upon interstate commerce 

that are only incidental." Ibid.

Applying these principles, we conclude that the OTAWA does not 

violate the Commerce Clause. The OTAWA neither regulates nor attempts to 

regulate off-track betting systems operated by other states or similar 

nationwide wagering websites. Rather, the OTAWA regulates the AWS and 

off-track wagers placed by New Jersey residents with New Jersey's account 

wagering system. 

The OTAWA is not a protectionist measure, and it is directed solely to 

legitimate local concerns. If the OTAWA has an effect on interstate 

commerce, it is incidental and the resulting burden is not "clearly excessive" 

when considered in light of the benefits of establishing an AWS that is 

available to New Jersey residents for wagering while they are located in this 

State.
A-5589-16T3 18

Affirmed.