Supreme Court Declines To Review New Jersey Sports Betting Case

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Thursday, June 26th, 2014 | Written by Stephen Smith

New Jersey‘s hope of overturning a federal law preventing legalized sports betting has been dealt a blow after the U.S. Supreme Court declined to hear the state’s sports betting argument. The latest decision comes after Gov. Chris Christie’s efforts to overturn the 22 year old ‘Professional and Amateur Sports Protection Act‘ (PASPA) was twice rejected in federal court.

Following the Supreme Court’s decision, Gov. Christie indicated he was now ready to draw a line under his two-year battle, stating: “It’s always a long shot to get certiorati from the United State Supreme Court. That’s the way it goes. They said no, so we have to move on.”

Missed opportunity

The PASPA of 1992 may have limited sports betting to just the states of Nevada, Delaware, Oregon and Montana, but New Jersey was initially granted the chance to gain exemption under the law, which it ultimately failed to do having not acted within a one year window of opportunity.

Back then, New Jersey saw the issue as less pressing as it’s gambling industry was on the rise and did not have to contend with competition from neighbouring states. The past few years, however, has seen NJ revenues slide from its 2006 peak of $5.21 billion to just under $3 billion in 2013, as the competition from Pennsylvania, Maryland, and Delaware grew ever more intense.

The current fight began in 2011

With the decline of NJ’s gambling industry, highlighted by Pennsylvania usurping it as the USA’s number two casino state in 2012, Atlantic City saw sports betting as a means by which it could gain the upper hand once more on its neighboring gambling states.

In 2011, Gov. Christie then signed into law a bill passed by New Jersey lawmakers allowing sports betting, which he said would help the state reign in illegal sports betting, whilst also generating millions of dollars in tax revenues for the state. Each year in the US, for instance, it has been estimated that up to $500 billion is wagered on illegal sports betting, at least $100 million of which could be captured by NJ, not including the additional revenues the state could attract in increased gambling tourism. As Union Gaming Group analyst Robert Shore, explained recently:

“I definitely think New Jersey would be better than Las Vegas for sports betting because you have so many rabid sports fans throughout the northeast. I think it would be a game changer. It would definitely be a huge opportunity, if it ever happened.”

Group of sports organizations spoils NJ plan

In 2012, however, the U.S. Justice Department along with five major sports leagues— the National Collegiate Athletic Association, Major League Baseball, the National Basketball Association, the National Football League, and the National Hockey League — sued to prevent the law from being implemented, arguing it violated the 1992 PASPA and would ultimately harm their sport’s integrity.

As is often the case, the NFL subsequently won at the federal level, compelling New Jersey to seek recourse at the U.S. Supreme Court. Nevertheless, the U.S. Supreme Court only hears roughly 1% of the petitions brought before it with most cases presented never being reviewed. This time around New Jersey’s long shot failed to pay off with five members of the U.S. Supreme Court voting to leave the New Jersey sports betting case alone.

State Senator Lesniak has a plan B

Up until now New Jersey has spent millions in dollars fighting the case, and State Senator Raymond Lesniak said he was not prepared to give up just yet, especially as he sees Atlantic City’s future linked to sports betting.

“This is, quite frankly, their [casinos] only hope. They’re going to continue to decline. We will continue to lose jobs.. [I’m disappointed the Supreme Court] would allow Las Vegas to be jam-packed [with bets] during the Super Bowl and Final Four weekend, while Atlantic City is a ghost town.”

Interestingly, Lesniak thinks he may have spotted a back door left open by the U.S. Justice Department, which could allow sports betting to be provided by a private operation, rather than licensed by the state. As Lesniak, explains the DoJ said federal law “does not even obligate New Jersey to leave in place the state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPA’s enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part.”

Therefore, Lesniak said he now intends to introduce a new bill which would repeal the NJ state laws banning sports betting which passed prior to the federal law.

“They invited us to do this. They said, ‘We’re not interfering with state’s rights. Go right ahead.’ It’s a bizarre argument.”

However, even if the new law does pass it is still likely to face the very same legal challenge as the previous one did.