New Jersey Loses Appeal of Sports Betting Case

on August 25, 2015
New Jersey sports betting case

Ray Lesniak says that New Jersey plans to continue fighting to allow casinos and race tracks in the state to offer sports betting. (Image: Noah K. Murray/The Star Ledger)

New Jersey lawmakers tried to find a clever way to work around the Professional and Amateur Sports Protection Act (PASPA), the law that stops most states from offering sports betting.

However, it seems as though the judges of the Third Circuit Court of Appeals were not impressed by their attempts to sidestep federal law.

A three-judge panel upheld a lower-court decision by a 2-1 vote, saying that New Jersey’s latest round of legislation related to sports betting was in violation of PASPA.

The decision was the latest setback for New Jersey, which has been battling for about three years now to find a way to allow sports betting at its casinos and race tracks.

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

NJ Strategy Based on Previous Third Circuit Ruling

New Jersey lawmakers had hoped that the court would rule differently, and that hope came from the Third Circuit’s own words in a previous decision.

In 2012, the New Jersey legislature passed a bill that would have decriminalized sports betting in the state, but courts sided with the major sports leagues in the United States, saying that it violated PASPA.

However, in their ruling, the Third Circuit said that while New Jersey could not license or sponsor sports betting, it could repeal its own prohibitions without violating PASPA.

That lead to the 2014 law, which replaced existing prohibitions with ones that only said that sports betting would not be allowed outside of casinos and racetracks, that minors could not bet on sports, and that the state would not regulate the industry.

However, while lawmakers may have thought that they had effectively sidestepped PASPA, the judges presiding over the case were not amused by the attempt to work around federal law.

“States may not use cleaver drafting or mandatory construction provisions to escape the supremacy of federal law,” the court said in their opinion. “PASPA, by its terms, prohibits states from authorizing by law sports gambling, and the 2014 law does exactly that.”

Judges Maryanne Trump Barry and Marjorie Rendell ruled against New Jersey. In the dissenting opinion, Judge Julio Fuentes sided with the state, saying that “there is simply no conceivable reading of PASPA that could preclude a state from restricting sports wagering.”

Lesniak Says Further Appeals Likely

While the ruling is certainly a setback for New Jersey, lawmakers there say that they are not done fighting just yet.

According to State Senator Ray Lesniak (D-Union County), the state plans to appeal for a hearing in front of the entire Third Circuit court, a move that would require a petition to be filed by lawyers sometime in the next 14 days.

Lesniak and others in New Jersey have said that the major sports leagues, particularly the National Football League, have been hypocritical in opposing the state’s push for sports betting.

“The NFL will play three games in London at Wembley Stadium, where fans can sit in their seats and bet on games,” Lesniak told the New York Times. “They want to have their gambling through fantasy sports and they want to control and run it.”