By: Matt Weiss

November 11, 2014

Sports betting is considered by many to be one of America’s greatest pastimes.  From fantasy sports leagues to March Madness bracket pools, betting on sports has long been a part of the sporting experience for many fans. However, this has not stopped the NFL, MLB, NBA, NCAA, and NHL from filing an injunction to block sports betting in New Jersey after the state legislature legalized sports betting last month. This battle is not merely a month old, though; it’s one that began more than 20 years ago.

In 1992, Congress enacted the Professional and Amateur Sports Protection Act (“PASPA”), which forbids states from legalizing sports gambling.[1] States that already allowed legal wagering on sports were grandfathered into PASPA; the law also gave New Jersey a one-year window to legalize sports betting. The state chose not to take Congress up on its offer.[2] That changed exactly 20 years later, when the New Jersey legislature enacted the Sports Wagering Law to legalize sports betting and promulgated regulations to implement it.[3] In response to this new law, the four major professional leagues and the NCAA filed a complaint against New Jersey Governor Chris Christie, among others, alleging the illegality of the Sports Wagering Law under PASPA.[4] The district court held that the Sports Wagering Law and its related regulations could not be enacted because PASPA is constitutional under the Commerce Clause, the Tenth Amendment, and the Due Process Clause and therefore must be upheld.[5]

New Jersey appealed the case to the Third Circuit, and though that court affirmed the district court’s judgment,[6] certain language in the Third Circuit’s opinion gave the state hope. In its opinion, the Third Circuit stated that it did “not read PASPA to prohibit New Jersey from repealing its ban on sports wagering.”[7] Further, the court did not “see how having no law in place governing sports wagering is the same as authorizing it by law.”[8] The court also stated, “[T]he right to do that which is not prohibited derives not from the authority of the state but from the inherent rights of the people.”[9]

Empowered by the Third Circuit’s suggestions that New Jersey would not be prohibited from merely repealing a ban on sports betting, as opposed to enacting a law that would specifically legalize sports wagering, the state legislature went into action. On October 16th, the New Jersey Senate passed a bill repealing many of the state’s prohibitions on sports betting. The bill “implements the decision of the United States Court of Appeals for the Third Circuit in National Collegiate Athletic Association v. Governor of New Jersey,” and quotes the court’s language with respect to PASPA not prohibiting the repeal of sports betting laws.[10] Governor Christie signed it into law the very next day.[11] Governor Christie made specific reference to the Third Circuit’s decision in his public comments on the bill: he said, “[G]iven earlier decisions by federal courts, it was critical that we follow a correct and appropriate path to curtail new court challenges and expensive litigation.”[12]

Unfortunately for the Governor, a new court challenge arose almost immediately, as the same five sports leagues that had previously challenged the Sports Wagering Law filed an injunction on October 20th, seeking to enjoin New Jersey from enacting this new bill as well.[13] The complaint alleges that while the new bill masks itself as a repeal of prohibitions on sports betting, it is in reality an authorization of sports betting in New Jersey, which would violate PASPA.[14] The injunction was granted on October 24th by the same district judge that had ruled on the case in 2013.[15] However, the Casino Control Commission, Division of Gaming Enforcement, and Racing Commission all have informed the federal court that they will not regulate sports wagering in violation of the new bill.[16]

This is certainly something to keep an eye on as New Jersey seems unwilling to back down in its quest to allow sports betting inside its borders. The stakes are high and all bets are off as to what will happen next.


[1] Nat’l Collegiate Athletic Ass’n v. Christie, 926 F. Supp. 2d 551, 554 (D.N.J. 2013).
[2] Id.
[3] Id. at 556.
[4] Id. at 553.
[5] Id. at 579.
[6] Nat’l Collegiate Athletic Ass’n v. Governor of New Jersey, 730 F.3d 208, 240 (3d. Cir. 2013).
[7] Nat’l Collegiate Athletic Ass’n, 730 F.3d at 232.
[8] Id. (emphasis in original)
[9] Id.
[10] 2014 NJ S.B. 2460 (NS).
[11] David Purdum, Governor Signs NJ Sports Betting Bill, ESPN Chalk (October 17, 2014, 10:20 PM), http://espn.go.com/espn/chalk/story/_/id/11718151/governor-chris-christie-signs-new-jersey-sports-betting-bill-law.
[12] Id.
[13] Nat’l Collegiate Athletic Ass’n v. Christie, 2014 WL 5395199 (D.N.J.).
[14] Id.
[15] Bob Jordan, Chris Christie sacked on Monmouth Sports Betting, MyCentralJersey.com (October 24, 2014, 5:01 PM), http://www.mycentraljersey.com/story/news/local/new-jersey/2014/10/24/chris-christie-nfl-betting/17844011/.
[16] John Brennan, State Contends that NJ Sports Betting Law does not Violate Federal Law, NorthJersey.com (November 4, 2014, 10:36 AM), http://www.northjersey.com/news/state-contends-that-nj-sports-betting-law-does-not-violate-federal-law-1.1126079.

 

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