New Jersey Sports Betting Law Defeated Again in Appeals Court Ruling

Posted on: September 19, 2013, 05:30h. 

Last updated on: October 26, 2021, 06:04h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

New Jersey has lost again in its bid to become the first state to introduce legalized sports betting since the federal government cracked down on the practice over 20 years ago. A federal appeals court said that the state law New Jersey has been attempting to put into practice is trumped by a federal law that outlaws the practice.

Predictable Outcome

In many ways, the decision wasn’t at all a surprise. When New Jersey passed the New Jersey Sports Wagering Law in 2011 after a voter referendum, it was clear that the state was in for a fight with several opposing factions. Once Governor Chris Christie signed the bill into law last year, it was only a matter of time before several major sports organizations would challenge it. Sure enough, the National Football League, Major League Baseball, National Basketball Association, National Hockey League, and the NCAA all sued the state.

The initial case was heard in March of this year. At that time, a federal judge said that the state could not legalize sports betting, citing the Professional and Amateur Sports Protection Act (PASPA). Passed in 1992, that act officially outlawed sports betting in all states that had not legalized the practice by January 1, 1993.

According to the state of New Jersey, though, that law violates the state’s rights on constitutional grounds. Notably, they have said that it tramples on state sovereignty, and say that allowing sports betting in some states but not others violates the equal protection clause.

It was probably a foregone conclusion that the two federal courts to hear the case so far would rule in favor of the plaintiffs, choosing to uphold the current federal law that is in place. New Jersey may well be hoping to take the case all the way to the Supreme Court, where they could win the only decision that would ultimately matter.

“We are cognizant that certain questions related to this case – whether gambling on sporting events is harmful to the games’ integrity and whether states should be permitted to license and profit from the activity – engender strong views,” the majority wrote in the 2-1 decision that upheld District Judge Michael Shipp’s previous ruling. “But we are not asked to judge the wisdom of PASPA or of New Jersey’s law, or of the desirability of the activities they seek to regulate. We speak only to the legality of these measures as a matter of constitutional law…New Jersey’s sports wagering law conflicts with PASPA and, under our Constitution, must yield.”

One Judge Dissents

However, the ruling wasn’t unanimous, which gave New Jersey officials much more hope moving forward. Judge Thomas Vanaskie gave a dissenting opinion, ruling in New Jersey’s favor.

“PASPA attempts to implement federal policy by telling the states that they may not regulate an otherwise unregulated activity,” he wrote. “The Constitution affords Congress no such power.”

When PASPA was passed, only licensed sports betting in Nevada and sports-based lotteries in Oregon, Delaware and Montana were exempted from the law. However, it did provide for a one-year window in which any states with licensed casino gambling for at least the past ten years could pass laws allowing for sports betting. This provision was essentially written specifically for New Jersey, but the state failed to act in the time allotted.