New Jersey’s Sports Betting Law Is Dealt Another Blow

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New Jersey’s wager to legalize sports gambling was struck down by the Third U.S. Circuit Court of Appeals. On September 17, 2013, the federal court ruled that New Jersey’s betting law conflicts with the 1992 Professional and Amateur Sports Protection Act (PASPA). PASPA restricts sports betting in all but four states: Nevada, Delaware, Montana, and Oregon.

New Jersey Governor, Chris Christie, signed the sports-betting law in January 2012. The law permits betting on professional and college sports at racetracks and Atlantic City casinos. Bets would not be taken on games involving New Jersey colleges or college games played in the state.

The NCAA, and four major sports leagues, responded to New Jersey by filing suit. They argued that PASPA preempts the New Jersey law. Additionally, the spread of legalized betting would undermine the integrity of athletic competition. New Jersey countered that PASPA violates the state’s sovereign rights and is unconstitutional. The Third Circuit agreed with the NCAA and held that New Jersey’s law is preempted by PASPA.

U.S. Circuit Judge Thomas I. Vanaskie dissented and wrote “PASPA dictates the manner in which states must regulate interstate commerce and thus contravenes the principles of federalism.”

New Jersey State Senator Raymond J. Lesniak, a sports-betting advocate, said “Las Vegas is jammed for Super Bowl week and for the NCAA Final Four weekend while Atlantic City is a ghost town. That’s just wrong.” “We will continue to fight this injustice by either appealing to the U.S. Supreme Court or to the entire Court of Appeals.”

For years, Atlantic City has lost gamblers to Pennsylvania, New York, and Maryland, as those states have legalized or expanded gambling. The purpose of the law is to attract people to stay in Atlantic City. These people would bring in significant revenue for the city and state by shopping, eating and spending. Legal sports gambling might generate $1 billion in bets and as much as $100 million for the state in its first year.

Although New Jersey vows to appeal the decision, there is no guarantee that the U.S. Supreme Court will accept an appeal. Other possible paths run through Congress. Currently, U.S. Reps. Frank LoBiondo (R., N.J.) and Frank Pallone Jr. (D., N.J.) are pushing two bills that would amend PASPA. One bill would add New Jersey to the list of states allowing sports wagering; and the other would give states a four year window to enact wagering legislation.

The case is National Collegiate Athletic Association v. New Jersey, 13-1714, U.S. Court of Appeals for the Third Circuit (Philadelphia).

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