New Jersey Sports Betting Denied By Federal Appeals Court

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Thursday, September 10th, 2015 | Written by Charles Washington

On August 25, 2015, New Jersey’s attempts to legalize sports betting in the state were once again stymied. A three-judge panel at the U.S. Third Circuit Court of Appeals in Philadelphia, PA, upheld a previous ruling that prohibits New Jersey from legalizing sports betting within its state boundaries. The ruling leaves many who had hoped to bet on sports legally within the state, as well as casino, racetrack operators and New Jersey lawmakers, wondering what steps can be taken, if any, to try and move forward. Following the ruling, Becker & Poliakoff gambling lawyer, Daniel L. Wallach, commented:

“The bigger winner today is the daily fantasy companies who now have the legal sports gambling space all to themselves for years to come. The sports leagues benefited again as well, because now they get to control the timing of when and how legal sports betting eventually gets implemented.”

What’s Behind the Lawsuit?

The battle to bring legal sports gaming to New Jersey has been raging for 4 years. It began when New Jersey was blocked from moving forward, after passing a state constitutional amendment in Trenton that would allow the state’s legally operating casinos and race tracks to accept bets. The law was voted in by New Jersey residents back in 2011, and state lawmakers had hoped that the move would help increase revenues for the state’s struggling gambling operators, which have had to lay off workers and shutter locations in recent years. More than $140 billion is spent on illegal sports betting in the U.S. currently, so it’s understandable that New Jersey lawmakers would see plenty of untapped potential revenue in legal sports betting.

About the Ruling

The judges on the panel for the U.S. Third Circuit Court of Appeals ruled two to one against New Jersey. What’s at issue here is that the law could be a violation of the Professional and Amateur Sports Protection Act, commonly known as PASPA, which has been in effect since 1992. Summing up the case, the US Court of Appeals for the Third Circuit in Philadelphia decision, stated:

“We acknowledge New Jersey’s salutary purpose in attempting to revive its troubled casino and racetrack industries. We now turn to the primary question before us: whether the 2014 law violates PASPA. We hold that it does.”

Critics of the opinion feel that the decision was due to pressure exerted by professional sports leagues, many of whom are profiting from fantasy sports, which is completely legal under current laws.

What the Ruling Means for New Jersey

A ruling handed down by the U.S. Third Circuit Court of Appeals cannot be appealed by New Jersey the way that a standard federal ruling can. New Jersey’s primary option for recourse would be to petition the court for an en blanc review. This means that all 23 judges who serve on the U.S. Third Circuit Court of Appeals will hear the case and then issue a ruling. The state has the right to request the review within 14 days of the ruling; however, the court can reject the petition. Still, legal experts are optimistic that New Jersey may be granted the review due to the facts of the case.

Next Steps for New Jersey

If New Jersey isn’t able to secure an en blanc review, there would only be two other avenues left for the state to continue forward with plans to legalize sports betting. The state could attempt to get the U.S. Supreme Court to hear the case and hope that theirs is one of the only 1 percent of all submitted cases to be selected by the court. The other option would be to try and act on the national level for legalization. New Jersey Senators and Congressmen could potentially unite with lawmakers from other states that have attempted to legalize sports betting in an attempt to change national law. Of course, this will be met with resistance from professional and collegiate sports lobbyists.

While it’s uncertain what the path forward for legal sports betting in New Jersey will ultimately be, it is clear that the road ahead will be long and treacherous. Only time will tell if the money spent to push ahead will be well spent for New Jersey residents.