A federal appeals court has again struck down an attempt by New Jersey to start sports betting in the state and upheld a federal ban.
The federal appeals court panel in Philadelphia upheld the Professional and Amateur Sports Protection Act of 1992, which bans sports betting in all but four states that had forms of sports betting before it was passed.
The state had hoped to get around the ban by simply not restricting sports betting and allowing it to exist as a self-regulated business. The move, however, was opposed by the professional sports leagues, the NCAA and the U.S. Department of Justice, which have opposed all of the state’s attempts to start sports betting.
The court ruled that the state’s plan still counted as authorizing sports betting and violates the ban. The court upheld the supremacy of the federal law and said the state has to work through Congress to change it.
This is the second time New Jersey has challenged the ban and gone through appeals, but he state has continually lost in federal court.
Starting in 2009, the state—after a voter referendum found residents in favor of sports betting—challenged the ban outright claiming it violated state rights and was discriminatory because it exempted four states.
When that challenge failed, the state attempted to adjust its betting laws to suit language used in arguments in the original case. The state essentially argued that the ban was on state-regulated sports betting, and then moved to repeal its sports betting laws to allow for a self-regulated sports betting industry.
The state, however, did still limit unregulated sports betting to racetracks and Atlantic City casinos. In this new ruling, Third Circuit judges Maryanne Trump Barry and Marjorie Rendell said they believed that by restricting sports betting to the tracks and casinos, New Jersey was still authorizing sports betting.
“States may not use clever drafting or mandatory construction provisions to escape the supremacy of federal law,” the ruling said.
Judge Julio Fuentes, who ruled against New Jersey earlier in the case, cast the dissenting vote.
“There is simply no conceivable reading of PASPA that could preclude a state from restricting sports wagering,” Fuentes wrote in his opinion.
The 2-1 ruling does leave room for the state to try another appeal. The state could petition to have the case re-heard by the entire Third Circuit court, rather than the three-judge panel.
State legislators may consider the move, since during this appeal there were comments by the judges that the matter may have belonged in front of the full session or “en banc.”
New Jersey state Senator Raymond Lesniak—one of the state’s most vocal proponents of sports betting—said he expects the state to move on a new appeal.
The ruling, however, did not provide insight or a blueprint into how the state could legally allow sports betting, as many watchers of the case had hoped.
Geoff Freeman, president of the American Gaming Association, the casino industry’s national trade organization, said the court ruling will not stop a re-examination of the country’s sports betting laws.
“With Americans betting at least $140 billion on sports illegally each year, it’s clear that current law is not achieving its intended result,” he said. “As the AGA leads an industry-wide task force to study sports betting, we will assess the implications of the court’s decision as the gaming industry continues to develop innovative ways to provide products and experiences that meet consumers’ demands.”
Currently, Nevada, Delaware, Oregon and Montana are the only states allowed to offer forms of sports betting. Nevada is the only state with a true sportsbook.
Analysts began weighing in on the decision quickly. Though the ruling only applies to the U.S. Third Circuit, it sets a major legal precedent for upholding PASPA. The rulings make is significantly harder for any state to move to allow sports betting.
The ruling is also seen as greatly helping daily fantasy sports, which is exempted under PASPA, and will now be less likely to face competition from straight sports betting.
