New Jersey has lost again before an appeals court in its attempt to circumvent a federal ban on sports betting.
The United States Court of Appeals for the Third Circuit ruled against New Jersey’s sports betting plan in a rare “en banc” session where all 12 of the circuit’s judges heard arguments on New Jersey’s appeal. In a 10 to 2 decision the court ruled that the state’s 2014 sports betting law violated the federal Professional and Amateur Sports Protection Act. The 1992 law prohibits sports betting in all but four states—most notably Nevada—that had forms of sports betting before the law went into effect.
New Jersey has lost two previous attempts to overturn the law saying that the act favored the four states that were grandfathered and violated the state’s right to decide on sports betting. New Jersey voters approved a referendum in 2011 allowing sports betting if the ban was overturned.
In this latest attempt, the state wrote a law that would have allowed sports betting at its casinos and racetracks without any state regulation. The plan emerged from previous court opinions that hinted that unregulated sports betting might circumvent the federal ban. But the Third Circuit’s overwhelming rejection of that argument likely means an end to New Jersey’s hopes of instituting sports betting.
“We now hold that the District Court correctly ruled that because PASPA, by its terms, prohibits states from authorizing by law sports gambling, and because the 2014 Law does exactly that, the 2014 Law violates federal law,” Judge Marjorie Rendell wrote in the court’s majority opinion.
The opinion also said the state’s 2014 law “provides the authorization for conduct that is otherwise clearly and completely legally prohibited.”
The ruling also found PASPA constitutional because it does not commandeer the states to enforce a federal law not expressly written into the Constitution.
Though two judges dissented saying they feel New jersey’s plan did find away around PASPA as written, the overwhelming majority against the plan left many analysts saying it was unlikely New Jersey—or any other interested state—could continue the fight.
However, the state could appeal the ruling to the U.S. Supreme Court, but the court has already refused to hear a previous appeal from the state seeking to overturn PASPA outright.
New Jersey Governor Chris Christie, speaking a sports radio talk show, said he would like to see the state once again try to get the Supreme Court to rule on the law, but admitted it would be a “longshot.”
A spokesman for New Jersey Attorney General Christopher Porrino said his office was reviewing the ruling and the state’s options. That sentiment was echoed by state Senate President Stephen Sweeney, who also said the state legislature is reviewing what to do next.
New Jersey had hoped to implement sports betting to help its ailing Atlantic City casinos and racetracks.
“We were relying on having sports betting to give a big boost to our ailing Atlantic City casinos and our suffering racetracks,” state Senator Raymond Lesniak told Reuters. “It’s just wrong for Congress to deny New Jersey what the state of Nevada has.”
Lesniak has been a strong supporter of sports betting in the state and sponsored the 2014 law. He said he expects the state will seek to appeal the matter to the Supreme Court. Dennis Drazin, an adviser to the New Jersey Thoroughbred Horsemen’s Association which strongly backed the sports betting plan also told reporters he expects the association will move to petition the court.
Lesniak also told the Newark Star Ledger that he is already working on legislation that would simply make sports betting legal in the state with no restrictions at all.
“I’m not about to throw in the towel now,” Lesniak told the paper.
Such a move, however, would likely be challenged immediately by the four major sports leagues and the NCAA, which have sued to block every attempt New Jersey has made to allow sports betting.
“We are pleased the Third U.S. Circuit Court of Appeals has denied New Jersey’s latest attempt to allow sports wagering in the state,” the NCAA said in a statement about the new ruling. “As other courts have acknowledged, federal law does not permit New Jersey’s actions. The N.C.A.A. continues to believe that PASPA is an important law that appropriately protects the integrity of sport in America.”
The decision is also a setback for proponents of sports betting seeking to repeal the ban nationally.
“Washington has a responsibility to fix a failed law that it created nearly 25 years ago,” said Geoff Freeman, the American Gaming Association’s president and chief executive in a press statement. “A federal government prohibition has driven an illegal, and occasionally dangerous, sports betting market of at least $150 billion annually. Law enforcement, mayors, leaders in sports, fans and many others agree that it’s time for a regulated sports betting marketplace that protects consumers, communities and the integrity of sports we enjoy.”
There have also been several indications that professional sports leagues are softening their stance against betting.
National Basketball Association Commissioner Adam Silver of the NBA has said that betting on his league’s games should be legal and regulated. A spokesman for the NBA repeated that position after the ruling, but said the league is not planning to directly advocate or lobby for a change in the law.
However, proponents of sports betting feel that the rise of daily fantasy Sports—which many feel is a type of sports betting—is clouding the picture and calling into question how the federal ban is being enforced.
Eight states have now passed laws legalizing daily fantasy sports, including New York where that state’s attorney general had made the most high profile challenge of daily fantasy sports. Sports leagues have embraced fantasy sports and formed several partnerships with DFS sites FanDuel and DraftKings.
