New Jersey’s long quest to legalize sports gambling at the state’s bedraggled casinos and racetracks enters its next phase on Wednesday, when a 12-judge panel of the U.S. Third Circuit Court of Appeals in Philadelphia hears oral arguments about the matter. Standing in opposition to New Jersey on Wednesday is a coalition of the four major professional sports leagues plus the NCAA.
Here’s what you need to know.
When does the hearing take place?
Wednesday, 11 a.m. EST.
So what’s it all about?
At the heart of the matter is the Professional and Amateur Sports Protection Act (PASPA), a 1992 federal law that prohibits sports gambling everywhere except for Nevada, Oregon, Montana and Delaware. New Jersey has waged a years-long effort to circumvent PASPA in order to allow sports gambling in the state.
And how has that gone for them?
Poorly, so far. In 2011, voters in New Jersey overwhelmingly voted in favor of a referendum that would establish state-sponsored sports gambling, and Gov. Chris Christie signed a law allowing it in 2012. But Major League Baseball, the NBA, NHL, NFL and NCAA challenged its legality in federal court, which agreed that New Jersey’s proposal would violate PASPA. New Jersey appealed that ruling to the same U.S. Third Circuit Court of Appeals that will hear Wednesday’s arguments, losing in a 2-to-1 decision that nonetheless appeared to give New Jersey a road map around the law. “Nothing in the statute requires New Jersey to maintain or enforce its sports wagering prohibitions,” Judge Julio Fuentes wrote, siding with the majority.
And that formed the basis of New Jersey’s second attempt to legalize sports gambling. In 2014, New Jersey officials repealed the prohibition of sports gambling in the state, in essence saying that such a move didn’t violate PASPA because the state didn’t specifically license or authorize sports betting, instead leaving oversight to casinos and racetracks and promising they would not be punished for allowing sports gambling.
The same sports leagues almost immediately moved to block New Jersey’s latest gambit, with the case eventually back before a three-judge Third Circuit Court of Appeals panel. There, New Jersey argued that it merely was following the court’s previous advice by repealing its prohibition of sports gambling and leaving oversight to the casinos and racetracks. But once again, in a 2-to-1 decision, New Jersey’s attempt failed, with the majority ruling that the move represented a “de facto” authorization of the gambling by the state, in violation of PASPA.
Fuentes was again on the three-judge appeals panel, only this time he sided with New Jersey, agreeing that the state was simply following the orders laid out in the court’s first ruling. He wrote that the court’s two rulings were “precisely the opposite.”
So what’s so different about Wednesday’s appeal?
At least partially because one of the judges who previously voted against it now seems to be on its side, New Jersey petitioned the Third Circuit for an “en banc” hearing on the matter, meaning a hearing before all 12 of the Third Circuit’s active judges instead of a smaller panel as in the past. And, in what is seen as a very unusual move, the court agreed: As noted by the Legal Sports Report, only one of 2,402 appeals in 2014 and only two of 2,715 appeals in 2013 were granted an en banc hearing by the Third Circuit. While this rare move is not indicative of a pending New Jersey victory, it’s seen as a sign that the court feels that the state’s argument is worthy of serious consideration.
“To get to this stage is a strong signal that New Jersey may prevail,’’ sports-law attorney Daniel Wallach told Bob Jordan of the Asbury Park Press. “The biggest obstacle for New Jersey was getting a rehearing, and that’s already done.’’
Attorneys representing the state are expected to center their argument on inconsistencies between the court’s first rejection of its appeal and its second rejection. They may also point to public comments by NBA Commissioner Adam Silver, who repeatedly has said that he favors the legalization of sports gambling in the United States. Despite his comments, the NBA is still part of the attempt to block sports gambling in New Jersey because Silver favors federal oversight of the practice rather than leaving it to the states.
So if the court agrees with New Jersey’s argument, that means sports gambling for everyone?
For New Jersey to win, it must convince seven of the 12 judges to side with its argument. Otherwise, the district court’s original ruling against New Jersey will stand. And if New Jersey does prevail, it would not mean the end of PASPA. “Rather, a New Jersey victory would lay out a clear path other states could follow (if they so choose) in order to bypass PASPA, and would likely lead to Congress looking into the 1992 law’s merits at some point down the road,” writes Steve Ruddock of PlayNJ.com.
Plus, the losing side perhaps will ask the U.S. Supreme Court to hear the case, though that could be a long shot. The Supreme Court already turned down New Jersey’s request to hear its appeal the first time this matter went through the courts. The numbers also could work against the losing side: The Supreme Court gets 7,000 petitions to hear cases each year; it usually takes on about 80 of them.
So when will we find out who wins the case?
It’ll be a while, with experts predicting a late-spring/early-summer announcement.