Legalized NJ Sports Betting Rejected by En Banc Court

     TRENTON, N.J. (CN) — New Jersey cannot allow sports betting at racetracks or Atlantic City casinos without violating longstanding federal law, the Third Circuit ruled Tuesday.
     The 10-2 opinion, which was issued by the en banc 12-member panel of the court, strikes down a 2014 state law that might have paved the way for sports gambling in various venues across New Jersey.
     That law attempted to circumvent an earlier federal law known as PASPA, which prohibited sports gambling in casinos. PASPA stands for the Professional and Amateur Sports Protection Act.
     “The 2014 law provides the authorization for conduct that is otherwise clearly and completely legally prohibited,” Judge Marjorie Rendell wrote in the 31-page opinion, noting the state’s “myriad laws prohibiting sports gambling” in casinos and racetracks.
     In 1992, Congress passed PASPA as a way to prohibit state-sanctioned sports gambling. The law exempted several states on the condition that they enact a sports gambling scheme by the end of 1993, but New Jersey missed that deadline.
     The Garden State attempted to rectify that, first in 2012 with the Sports Wagering Law, which was eventually defeated, and again in 2014 by repealing all of the state’s prohibitions on gambling.
     The law, which was an attempt to revitalize the state’s racetracks and give the flailing Atlantic City a boost, was seen by some as an end-run around PASPA.
     The NFL, National Collegiate Athletic Association, and other sports leagues argued that New Jersey’s 2014 law was “just as unlawful as its previous attempts” to get around PASPA, and they have fought against attempts to legalize sports books in the state.
     In their appeal, New Jersey officials had argued that the 2014 law did not authorize sports betting, and that it merely repealed restrictions on it.
     Arguing before the en banc Third Circuit in February, attorneys for the state, led by Theodore Olson, said that the 2014 law did not sanction sports betting but rather removed certain prohibitions against it, a key distinction.
     “Lifting a prohibition is not an authorization,” Olson said during the February hearing, adding that PASPA “either requires states to regulate sports betting or to leave them alone.”
     The Third Circuit found that argument lacked merit and that the 2014 law very clearly authorizes sports betting because it specifies where sports gambling may occur, who may place bets, and which sports they can gamble on.
     “The presence of the word ‘repeal’ does not prevent us from examining what the provision actually does, and the legislature’s use of the term does not change that the 2014 law selectively grants permission to certain entities to engage in sports gambling,” Rendell wrote.
     Further, PASPA itself shows that Congress intended sports betting to be illegal in New Jersey, as the federal law granted a one-year exemption specifically to the state, the Third Circuit ruled.
     The 2014 law’s construction provision, which stated that it did not intend the state to authorize sports betting, does not help the state’s case, the appeals court said.
     “States may not use clever drafting or mandatory construction provisions to escape the supremacy of federal law,” Rendell wrote in Tuesday’s ruling. “The 2014 law violates PASPA, and the construction provision cannot alter that fact.”
     Rendell was joined in the majority by Judges Thomas Ambro, D. Brooks Smith, D. Michael Fisher, Kent Jordan, Thomas Hardiman, Joseph Greenaway Jr., Cheryl Ann Krause, Felipe Restrepo, and Maryanne Trump Barry.
     In one of two dissenting opinions, Judge Julio Fuentes — who also dissented in the Third Circuit’s previous ruling on the 2014 law — noted that New Jersey voters in 2011 passed a referendum to allow sports betting and that in passing the 2014 law, New Jersey “did what it thought it was permitted to do.”
     Judge Thomas Vanaskie also dissented, noting that PASPA “does not leave a state ‘much room’ at all,” in that it requires states to “leave gambling prohibitions on the books to regulate their citizens.”
     This is the second time the Third Circuit has ruled against New Jersey on sports betting, and both times the court was split.
     In August 2015, the Third Circuit ruled 2-1 that New Jersey’s attempts to bring sports betting to the state were unconstitutional. In that ruling, Rendell similarly wrote that “myriad laws” in the state already blocked sports betting. That decision, however, was vacated and the appeals court agreed to rehear the case en banc.
     New Jersey is expected to appeal the ruling to the U.S. Supreme Court.

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