New Jersey and Governor Chris Christies have filed yet another appeal of an Appellate Court decision in the hopes of bringing sports betting to Atlantic City casinos and the state’s racetracks.
The state has asked that the entire Third Circuit Court of Appeals review the state sports betting law. The law was struck down recently by a panel of three appellate judges. The New Jersey Horseman’s Association—which is a party to the case—has also filed a similar appeal.
While seemingly just another in a long line of appeals by the state, some developments in the case have caused optimism for this appeal.
The Associated Press reports that two judges in the Appeals Court Circuit have recused themselves from the case—Judges Patty Shwartz and Michael Chagares. The state will now need six out of 10 judges in the circuit to agree to hear its appeal, instead of seven out of 12. No reasons were given for the recusals, the AP said.
The court has also ordered the four major pro sport leagues and the NCAA—who have repeatedly sued to block the state from offering sports betting—to file a response to New Jersey’s request within two weeks. Legal experts cited by the AP say that’s a sign the court is leaning toward rehearing the case.
Appeals asking for an “en banc” or full court hearing are usually declined quickly without any response from the winning side—in this case the leagues—required. The request for the response suggest the court is seriously considering a rehearing, legal analysts told the AP.
New Jersey is attempting to circumvent a federal ban on sports betting by instituting a self-regulated industry that could operate at the state’s casinos and racetracks. The state is arguing that the current federal ban is on state regulated sports betting.
The Appeals Court panel ruled that the state was still regulating sport’s betting by limiting it to casinos and racetracks, applying age restrictions and other rules.
The state’s move has been opposed by the professional sports leagues, the NCAA and the U.S. Department of Justice, which is seeking to uphold the Professional and Amateur Sports Protection Act which bans sports betting in all but four states.
A previous challenge by the state to PASPA resulted in a ruling against the state, but in the decision, New Jersey felt that the court outlined a plan that would allow a de-regulated form of sports betting to go through.
Judge Julio Fuentes, who wrote the previous ruling, was also on the three-judge panel casting a dissenting vote. In his dissent, Fuentes said he felt the state lived up to the previous ruling.
Though appeals to have the entire court review a case are rarely granted, the state and the association hope Fuentes dissent will prompt a full-court review.
“The people of New Jersey have spoken on this issue, and we will continue to fight to protect the will of our voters from the fickle and unfair application of outdated and unconstitutional federal law,” said Christie spokesman Brian Murray in a press statement. “At the end of the day, this isn’t just about New Jersey being treated fairly under federal law, but about the common sense reality of bringing a sports wagering industry that is already taking place every day in our state out of the shadows.”
Meanwhile, a new report from GamblingCompliance confirms what gaming industry experts have known for some time—that a legal American sports betting market would be the largest in the world by far.
In calling the sector a “sleeping giant,” the research firm forecasts that a fully built-out U.S. market, with betting in place in casinos, online and in land-based bookmakers, would produce more than $12 billion in annual revenue. That’s almost as much as the NFL itself generates—according to ESPN—and is more than five times larger than the UK’s regulated market and more than 11 times the size of Italy’s.
The American Gaming Association, the federal lobbying arm of the land-based casino industry, estimates that this year $95 billion will be bet—only about $2 billion legally—on NFL and college football alone.
“Illegal sports betting is reaching new heights of popularity in America,” said AGA President and CEO Geoff Freeman. “It’s clear that a federal ban on traditional sports betting outside of Nevada is failing.”
Currently, Nevada is one of four states exempt from a 1992 federal ban on sports betting and the only state allowed to offer single-game wagering, the most popular form in the U.S. In 2014, Nevada sportsbooks won $227.04 million, an all-time record, according to official state figures.
New Jersey has been trying to bring legalized sports betting to its struggling casinos and racetracks for three years but has been repeatedly blocked in federal court by the professional sports leagues and the NCAA. Earlier this month, the state lost its second U.S. Appeals Court bid to have the ban overturned. Gov. Chris Christie has filed a petition for a rehearing with the court.
In the meantime, some of the sports leagues appear to be softening their stands, led by NBA Commissioner Adam Silver, who last year called on Congress to create a framework that could be adopted by states interested in offering legal sports betting. MLB Commissioner Rob Manfred has agreed insofar as stating that a “fresh approach” to issues is needed. The NFL and NCAA remain opposed, but the NFL has held discussions with the AGA to address the issues, according to news reports.
Much of the controversy in recent days has centered around fantasy sports wagering, a booming industry which a new report from Eilers Research projects could grow to $23.5 billion worldwide by 2020.
The report, released last month, estimates there are currently about 595,000 paid active real-money fantasy bettors, 1.72 million paid active bettors at eSportsbooks and 3.2 million players betting informally using in-game items. The report expects this to grow to 19.4 million bettors by 2020, not counting the informal markets.
Two major sites, DraftKings and FanDuel, dominate the fledging U.S. market, but both are expected to have their legality challenged in court, as the AGA, major casino operators and a number of federal lawmakers hold that their services are tantamount to sports betting.
The debate will figure prominently at the 2015 Global Gaming Expo in Las Vegas later this month. The show, co-produced by the AGA, will include at least five conference sessions devoted to the issues and will feature DraftKings CEO Jason Robins and Unikrn co-founder and CEO Rahul Sood as speakers.
