What Way Forward Now For New Jersey Sports Betting?

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Tuesday, August 30th, 2016 | Written by Adam Brown

For months, the world of gambling has eagerly awaited a decision by the Third Circuit Court in Philadelphia, hoping that a positive outcome of the case could potentially pave the way for the legalization of sports betting across the United States.

At the end of August, the court subsequently handed down its ruling in the case involving the state of New Jersey on the one side, and 5 major sporting leagues and the Department of Justice on the other, and it didn’t go well. The court ruled that New Jersey’s move to allow legal sports betting was in violation of the Professional and Amateur Sports Protection Act (PASPA) and that the law did not infringe on the individual state’s rights.

Therefore, for the short term, at least, it seems sports betting is a no go outside of the four states currently exempt from PASPA, namely Oregon, Delaware, Montana, and Nevada. But is there any path forward that could raise hope of legalization becoming a reality in the future? Here are a few ways that it might happen:

1: NJ Could Repeal Its Sports Betting Law

At this time, New Jersey has completely banned sports betting. The court case then arose after the state attempted to partially appeal the current sports betting prohibition and begin regulating sports betting under specific circumstances. If New Jersey lawmakers really wanted to push the issue, they could move to completely repeal state law and allow for the total legalization of sports betting anywhere in the state.

The problem with this approach, however, is that while casinos and racetracks throughout New Jersey could then accept bets, it would also mean that so could anyone else. There would essentially be no consumer protections in place at all, and it’s fair to say that gambling interests, such as the casino industry, are likely to oppose such a move. State lawmakers, likewise, are also unlikely to support the idea, and as Sen. Lesniak commented recently:

“[such an approach] doesn’t serve my goal of sports betting enhancing revenue for our casinos and racetracks and for the state, and generating and saving jobs.”

Elaborating further, sports law professor Marc Edelman, from Baruch College’s Zicklin School of Business, stated that; “what New Jersey really seems to want is commercial sports gambling, not increased privacy rights within one’s home.”

2: Another State Could Try to Challenge PAPSA

There is always a chance that another court would decide a case like the one that New Jersey put before the Third Circuit court in a different way. A state located outside of New Jersey’s federal court district could push the issue and see if they get a different outcome.

The problem with this option is that it may not work because The Third District Court’s ruling sets a precedent that other courts might be likely to follow.

3: NJ Could Appeal to the Supreme Court

Chris Christie and the government of New Jersey could file an appeal with the U.S. Supreme Court (SCOTUS) as one last push to try and keep their proposed partial appeal of their gambling ban alive.

One big problem with this, though, is that SCOTUS is unlikely to agree to hear this case as The Third Circuit Court handed down a clear majority opinion against New Jersey. Typically, SCOTUS takes on cases that seem to be more grey than black and white, as this case has proven to be.

4: PAPSA Gets Repealed

The U.S. government has the power to end the issue once and for all by repealing PASPA and allowing states to legalize sports betting if they wish.

Standing in the way of this approach working, however, is that right now there doesn’t seem to be any interest in allowing for sports betting at the national level. Also, the NFL, NHL, MLB, NBA and NCAA are likely to lobby heavily against any legislation that would seek to repeal the act, as it would directly impact their stranglehold on the industry.

A $140BN Industry

In 2015, Americans are estimated to have spent around $140 billion on sports betting, according to the American Gaming Association (AGA), with 97.8% of those bets placed with unlicensed operators outside of the four states covered by PASPA. Betting on American football games is by far the most popular choice amongst sports punters, accounting for around $95 billion of wagers, with a paltry $2 billion gambled legally.