Christie-Backed Betting Law in New Jersey Blocked by Court

Updated on

A ban on sports gambling at New Jersey’s casinos and racetracks will remain in place after a federal appeals court again rejected Governor Chris Christie’s bid to lift it.

A state statute repealing a ban on sports betting can’t circumvent a 1992 federal law barring such activity in all but Nevada and three other states, the U.S. Court of Appeals in Philadelphia ruled Tuesday. The appeals court also rejected an attempt by New Jersey in 2013 to legalize gambling.

The ruling is a setback for Christie as he seeks to boost the state’s shrinking gambling industry amid increased casino competition from neighboring states. The National Football League and four other sports organizations sued to block the law signed by Christie last October that sought to overcome the legal hurdles.

The law violates the U.S. Professional and Amateur Sports Protection Act, or PASPA, a divided three-judge panel ruled.

“We acknowledge New Jersey’s salutary purpose in attempting to revive its troubled casino and racetrack industries,” the judges said in a 2-1 opinion. “We now turn to the primary question before us: whether the 2014 Law violates PASPA. We hold that it does.”

State Senator Raymond Lesniak, a Democrat and the main sponsor of the bill, promised to appeal.

In 2012, U.S. District Court Judge Michael Shipp blocked a similar law authorizing sports gambling, ruling it violated federal provisions. He blocked the new law again last year.

Partial Repeal

New Jersey had argued that the new statute was different because it was a partial repeal of pre-existing prohibitions. Ted Olson, an attorney for the state, likened the purpose of the new statute to “decriminalization” in a March 17 hearing.

During the hearing, judges in the appeals court debated the differences between repealing a law and authorizing one.

“Authorize and repeal are not equivalent,” Olson argued.

“What the 2014 law is doing is effectively revising the licenses held by the casinos, allowing them to take bets,” Judge Maryanne Trump Barry said.

Barry was one of two judges to rule against the law. Judge Julio Fuentes dissented, saying the 2014 law “renders the previous prohibitions on sports gambling non-existent.”

After the repeal, “it is as if New Jersey never prohibited sports gambling in casinos, gambling houses and horse racetracks,” Fuentes wrote.

“Therefore, with respect to those areas, there are no laws governing sports wagering and the right to engage in such conduct does not come from the state,” he wrote. “Rather, the right to do that which is not prohibited stems from the inherent rights of the people.”

Full Court

Lesniak said he would cite the Fuentes dissent in asking the full Third Circuit court to take the case on appeal. He said he expected the New Jersey Racing Association and state Senate to join that effort.

The suit was brought by the NCAA, the NFL, the National Hockey League, the National Basketball Association and Major League Baseball.

The case is NCAA v. Governor, 14-4546, U.S. Court of Appeals for the Third Circuit (Philadelphia).

Before it's here, it's on the Bloomberg Terminal. LEARN MORE