New Jersey Hopes That the Third Time’s the Charm for the Third Circuit in Sports Gambling Case
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New Jersey Hopes That the Third Time’s the Charm for the Third Circuit in Sports Gambling Case

New Jersey Hopes That the Third Time’s the Charm for the Third Circuit in Sports Gambling Case

In late 2015, the Third Circuit granted New Jersey an en banc hearing on its appeal over sports gambling.1 New Jersey is attempting to become the fifth state to legalize sports gambling, while also being the first to legalize it since the enactment of the Professional and Amateur Sports Protection Act of 1992.2 PASPA, as it has come to be known, was lobbied for by the four top professional sports leagues, the NFL, NBA, MLB, and NHL, as well as the NCAA,3 to stop states from legalizing sports gambling. The leagues, at the time, felt that sports gambling was a threat to the integrity of sports, and wanted Congress to protect society from the dangers it could impose. PASPA specifically outlawed sports betting throughout the United States, however it exempted the states that already had authorized sports gambling: Oregon, Delaware, Montana, and Nevada. In addition, it granted a one year grandfather period to states, which was intended to give New Jersey this same right.4

The issue New Jersey is challenging, however, is the exact language of PASPA’s ban on sports gambling. PASPA states that “It shall be unlawful for . . . a governmental entity . . . [to] authorize by law . . . [sports] gambling”.5 New Jersey had previously enacted legislation that banned sports gambling, and they are not attempted to repeal the law to “allow private casinos and racetracks to offer sports betting as long as the state didn’t sponsor or regulate it”.6 However, the issue here is whether a repeal of a prohibition is tantamount to an “authorization by law”.7

New Jersey wants to legalize sports betting in hopes that it could revitalize the once-lively Atlantic City. However, New Jersey had the opportunity to legalize sports gambling when PASPA was first enacted, and missed their chance. Now, New Jersey is arguing that the repeal of a prohibition should be a loophole for PASPA, as opposed to going through Congress to get their exemption back. When the sports leagues found out about the New Jersey Legislature’s attempt to do so, they jointly challenged New Jersey as conflicting with federal law. However, the Third Circuit now has the chance to do what so many of the American people want: legalize sports gambling. With the onslaught of services providing gambling platforms, such as daily fantasy, online poker, and sports books in Las Vegas, a legalized sports gambling market in the United States could earn upwards of $12 billion per year in revenue.8

If the Third Circuit rules against New Jersey, there is always the possibility that the Supreme Court chooses to hear the case. However, without a circuit split, it would be unlikely that the court would grant certiorari for an issue such as gambling, a matter well within the reach of Congress. Nevertheless, it will be interesting to see how the court rules. An en banc hearing is rare, so it is not out of the question that the third time could be the charm for New Jersey.

 


  1. NCAA v. Rebuck, Nos. 14-4546, 14-4568, 14-4569, 2015 U.S. App. LEXIS 17839 (3d Cir. Oct. 14, 2015).

  2. 28 U.S.C. § 3701.

  3. Haley Hintze, New Jersey Court Hearing Wednesday in PASPA Sports-Betting Case, Flushdraw (Feb. 15, 2016), http://www.flushdraw.net/news/new-jersey-court-hearing-wednesday-paspa-sports-betting-case/ [https://perma.cc/C85W-KAWR].

  4. Brent Johnson, The story of when N.J. almost legalized sports betting in 1993, NJ.com (Mar. 15, 2015), http://www.nj.com/politics/index.ssf/2015/03/the_story_of_njs_missed_opportunity_on_sports_bett.html [https://perma.cc/PGT6-3JNA].

  5. 28 U.S.C. § 3702, available at https://www.law.cornell.edu/uscode/text/28/3702.

  6. Brent Johnson, N.J. sports betting case will go before U.S. appeals court again, NJ.com (Oct. 14, 2015), http://www.nj.com/politics/index.ssf/2015/10/us_appeals_court_to_re-hear_nj_sports_betting_case.html [https://perma.cc/R28Y-ZBLJ].

  7. 28 U.S.C. § 3701.

  8. David Purdum, Research shows U.S. could dominate global legalized sports betting market, ESPN (Sept. 9, 2015), http://espn.go.com/chalk/story/_/id/13614240/research-shows-united-states-dominate-global-legalized-sports-betting-market [https://perma.cc/B47M-H6P9].

Zach Schreiber

Zach Schreiber works as a sports agent, representing professional athletes worldwide. He is also a second year evening student at Fordham Law School, a staff member of the Fordham Intellectual Property, Media & Entertainment Law Journal, and on the Executive Board of the Fordham Sports Law Forum.