Federal Courts Rule against NJ Sports Betting Law

In a recent decision handed down by the Third Circuit of the US Court of Appeals, a New Jersey sports betting law was found to be in violation of federal Professional and Amateur Sports Protection Act (PASPA) law.

New Jersey’s sports betting law, approved by Governor Chris Christie in 2014 and referred to as the “2014 Law,” eliminates restrictions on sports betting in some areas of the state, but does not explicitly authorize sports betting. The Third Circuit did not recognize this tactic and ultimately ruled that the law is in violation of PASPA.

The 2-1 decision handed down on Monday was in agreement with a lower court’s ruling on the same matter.

What is PASPA?

PASPA stands for Professional and Amateur Sports Protection Act. Also known as the “Bradley Act,” it was passed in 1992 during the presidency of George H.W. Bush. In a nutshell, PASPA outlaws almost all sports betting nationwide. It also gives the National Football League (NFL), Major Baseball League (MLB), the National Basketball Association (NBA), the National Hockey League (NHL), and the National Collegiate Athletic Association (NCAA) the authority to enforce the law by way of filing suit against those who violate it.

However, a few states with sports lotteries were grandfathered in and are not required to abide by PASPA. Nevada has had legal sports betting since the 1950s and is currently the only state to be fully exempt from PASPA. Three other states – Oregon, Montana and Delaware – are permitted to have a modified amount of sports betting. A main argument against PASPA is why only these states are allowed to have sports betting while it’s illegal for the rest of the nation. More on that later.

PASPA became effective on January 1, 1993. For a period of one year from that date, Congress allowed states that had been running licensed casinos for the previous ten years to put together their own laws that would legalize sports betting in their state. This grace period definitely applied to New Jersey, as the licensed gambling industry there had been around for much more than ten years. However, for one reason or another, New Jersey failed to act in time and lost their opportunity to legalize sports betting there.

This most recent attempt by New Jersey to make up for lost time in the sports betting world has failed. But to those champions of the gambling industry, this war is not yet lost.

What’s Next for New Jersey?

With this newest ruling, New Jersey’s options are wearing thin – but there are a few routes the state can take from here. First, they can request what is called an “en banc” motion. This means that the non-unanimous decision by the third circuit judges indicates that their ruling was controversial by nature, so New Jersey can request that all appellate judges from the third circuit court weigh in on the case. But there’s a good chance that it won’t even get that far, because the en banc motion itself has to be approved before any other judges can get their hands on it.

Another route New Jersey can take is to appeal to the US Supreme court. New Jersey tried to do this after the failure of a previous incarnation of the sports betting law, but the Supreme Court passed on the case. If they once again appeal, they have a slim but possible chance of having it heard this time around.

Barring both of these options, New Jersey may have to go back to the drawing board and hash out some new legislation that can get around PASPA legally. Or they could – dare we say – come up with a plan to have PASPA repealed. But calling that a major endeavor would be a gross understatement.

Food For Thought

One note of concern regarding this latest denial is the fact that one of the judges, Maryanne Trump Barry, is the sister of presidential hopeful Donald Trump. Trump has been a big name in the gambling world for a long time, and while he no longer owns any casinos in New Jersey, he is and will always be an influential player in the industry.

Trump Barry was one of the two judges who ruled that the 2014 law was in violation of PASPA. It’s hard to tell exactly which way Donald Trump leans on the sports betting issue. But if you think about it, wouldn’t it be a little naïve to assume that Trump’s own sister could remain completely objective when it comes to gambling matters? After all, Trump’s history with casinos is a long and storied one. It seems that would be difficult for him to be completely impartial the politics of it all.

If we get back to general opinions regarding PASPA, opponents of the law make a good argument by claiming that grandfathering in certain states is essentially discriminating against all the others that have to obey PASPA. Why should sports betting be either legal or illegal depending on where you live or travel? Federal laws should be applied to all American citizens equally, regardless of their current location. If there were such a thing as “geographic discrimination,” PASPA would fit the bill.

Another strong argument against PASPA is that by making sports betting illegal, it encourages people to seek out unscrupulous bookies and break the law anyway. According to a student journal from Stanford University, illegal sports betting in the U.S. accounts for up to $380 billion dollars EVERY YEAR. Not only is this money that every almost casino in America is missing out on, but in a world without PASPA, it’s money that could be gambled in a safe, regulated environment – and without any broken legs.

Conclusion

This ruling by the Court of Appeals is a major blow to New Jersey and sports betting enthusiasts everywhere. But as long as supporters of legal sports betting continue to be vocal and take action, there will always be a glimmer of hope.

Photo sources: Calvin Ayre, North Jersey, The Atlantic