U.S. Third Circuit Court of Appeals Rules against New Jersey Sports Betting
All New Jersey Sportsbooks Are Illegal
After a summer of deliberations, the U.S. Third Circuit Court of Appeals in Philadelphia denied New Jersey’s bid to legalize sports betting in the state. The court ruled 2-1 in a majority decision against the New Jersey Department of Justice’s legal attempt to overturn the Professional and Amateur Sports Protection Act of 1992.
This is not the end of the court battle. New Jersey‘s leaders announced they would appeal the decision to the US Supreme Court.
2-1 Decision by an En Banc Panel
The Third Circuit Court of Appeals ruled 2-1 against New Jersey on a similar case two years ago. Given advice provided by the judges then, Gov. Chris Christie ordered his Justice Department to allow sports betting at the state’s racetracks and casino sites. The legislature also repealed the earlier legislation, because it was seen as a direct challenge to the PASPA.
New Jersey’s attempts to legalize sportsbooks by simply ignoring the PASPA did not work. Judges Marjorie Rendell and Maryanne Trump Barry of the Third Court of Appeals said the state’s decision to allow sports betting at favored sites like Monmouth Park, while prosecuting bookies and non-licensed sportsbooks, still constitutes an attempt to legalize sports bets against federal law.
One possibility is the state asks for the 3rd Circuit Court to consider an “en banc” ruling on the case. Though Chris Christie cannot ask for a traditional appeal (to the appeal), an en banc ruling would include all 23 judges in the appellate court. The 3rd Circuit could decline to give such a ruling.
Christopher Soriano, an attorney for Duane Morris, explained how the “en banc” judicial process works (in which the entire bench of judges rule): “En banc is ‘extraordinary’ and completely discretionary. [The] case must have a conflict with a prior decision or must involve exceptional importance. The question will be whether Judge Fuentes’ dissent creates a conflict with the prior decision.”
Julio Fuentes Wrote Dissenting Opinion
Judge Julio Fuentes was the lone dissenting voice in the case. He wrote an opinion which defended New Jersey’s case. Judge Fuentes wrote in his opinion, “There is simply no conceivable reading of PASPA that could preclude a state from restricting sports wagering.”
How the PASPA Was Passed
In 1992, at the behest of the NFL, Major League Baseball, and the other American sports associations, the U.S. Congress passed the Professional and Amateur Sports Protection Act. The PASPA banned sports betting in all but 4 states, which were grandfathered into the law. New Jersey’s legislature was given one year to pass a sports betting bill and gain the same exemption, but failed to do so. The decision did not seem important at the time, because Atlantic City was still one of the few places in America where land-based casino gambling took place. Over the next 20 years, tribal casinos, private casinos, and racinos sprang up across America, hurting Atlantic City’s bottom line. Now, many sees legalized sports betting as the best chance to save AC’s gaming economy.
In 2011, the electorate of New Jersey voted to legalize sports betting. The vote led the state legislature to pass a law legalizing sportsbooks. The NFL, NBA, MLB, NHL, and NCAA filed a joint lawsuit against New Jersey, saying they were violating the PASPA and sportsbooks in Jersey would undermine their sports.
The Long Court Battle
That cased was heard by US District Judge Michael Shipp in Trenton and the US Third Circuit Court of Appeals in Philadelphia, and in each case the courts ruled on behalf of the leagues. The same case was appealed to the US Supreme Court in June 2014, but the Supreme Court declined to listen to the case.
Gov. Christie’s attempts to legalize sportsbooks seemed to be at and end, but in October 2014 the New Jersey legislature passed a new law which was supposed to skirt the PASPA, using the opinion by the Third Court of Appeals as its advice. That led to a new lawsuit by the leagues and two more decisions against New Jersey–one in November 2014 in Judge Shipp’s court and one on August 26, 2015 before the Third Court of Appeals.
Heading to the Supreme Court
New Jersey’s lawyers said after today’s announcement the state would continue the fight. That means either the en banc method will be considered or this newer ruling will be appealed to the U.S. Supreme Court. Whether the court will be in a better mood to review the case than they were in June 2014 is doubtful. Many saw today’s ruling as the state’s best chance to strike down the PASPA, because the earlier ruling had given the state hope.
Despite the ruling, several high-ranking people have suggested the PASPA law will be struck down eventually, due to its conflict with the Commerce Clause of the US Constitution. NBA Commissioner Adam Silver, despite joining the lawsuit, has said he expects sports betting to be legalized and has called for a reasonable, federal solution.
Adam Silver’s Stance on Sportsbooks
After the appellate court’s ruling was announced, NBA spokesman said, “We agree with the Third Circuit’s decision reaffirming that the appropriate path to legal sports betting is through Congress. We continue to support a federal legislative solution that would protect the integrity of the game while allowing those who engage in sports betting to do so in a legal manner.”
Adam Silver’s position is nuanced, but it is based on a pragmatic approach to the sportsbooks. Silver wants a federal law that would legalize sports gambling, but he wants the laws arranged in such a way that the NBA and its fellow leagues can efficiently get their cut of the revenues. In the end, the long fight over sports betting in America is about money, and who gets that money.
