The state of New Jersey was dealt a harsh blow in its quest to be able to launch a legal sports betting industry on Tuesday when the twelve judges of the U.S. Third Circuit Court of Appeals in Philadelphia made their en banc ruling that the state’s efforts to legalize sports betting violated federal law.
The federal law in question is the Professional and Amateur Sports Protection Act of 1992 (PASPA), which makes sports betting illegal in all but four states: Nevada, Montana, Oregon, and Delaware. That seems like an odd collection of states, to be sure; the four were grandfathered in, as they had some sort of legal gambling for at least ten years before the bill was passed. New Jersey had the option to be grandfathered in as well, but declined, a decision it is now regretting. Of the four states, Nevada is the only one with full-fledged sports betting, the reason many of you probably didn’t even realize that sports betting was legal in the other three states.
As an economic downturn and increased competition from other states has hurt Atlantic City’s gambling industry, New Jersey lawmakers have tried to come up with ways to make sports betting legal, despite the existence of PASPA. The latest was the passage of an odd bill, S2460, that attempted to skirt PASPA not by explicitly legalizing sports betting, but rather by making it no longer illegal. It’s a subtle difference: the bill was to remove the illegality of sports betting while not actually saying, “It’s 100 percent legal now!” No licenses would be issued, but certain racetracks and casinos could start offering sports betting without the threat of prosecution.
The major U.S. sports leagues – MLB, NBA, NFL, NHL, and the NCAA – challenged the legislation and won in a 2-1 ruling by a three judge panel in the Third Circuit Court of Appeals.
The Court gave the state another chance, though, granting a hearing en banc, which meant that the state could present its case in front of all twelve judges. That hearing took place in February.
On Tuesday, the Court handed down its ruling, with ten of the twelve judges ruling against New Jersey, saying that the 2014 law violates PASPA. The judges that dissented were Julio Fuentes and Thomas I. Vanaskie.
In her majority opinion, judge Marjorie O. Rendell, wrote simply, “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,” obviously not buying the workaround that was attempted in the bill.
The NCAA, for its part, is happy with the decision, telling ESPN:
We are pleased the 3rd U.S. Circuit Court of Appeals has denied New Jersey’s latest attempt to allow sports wagering in the state. As other courts have acknowledged, federal law does not permit New Jersey’s actions. The NCAA continues to believe that PASPA is an important law that appropriately protects the integrity of sport in America.
The NBA, though, took a more neutral stance. In November 2014, NBA Commissioner Adam Silver wrote an op-ed for the New York Times, expressing his support for legalized sports betting. “There is an obvious appetite among sports fans for a safe and legal way to wager on professional sporting events. Mainstream media outlets regularly publish sports betting lines and point spreads,” he wrote.
Silver added, “Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards.”
Thus in a statement to ESPN, NBA spokesman Mike Bass said, “The Third Circuit reaffirmed that the appropriate path to legal sports betting is through Congress. We remain supportive of a federal legislative framework that would protect the integrity of the game and allow those who bet on sports to do so in a legal and safe manner.”
