For the second time in three years, the Third Circuit has rejected New Jersey’s attempt to circumvent the Professional and Amateur Sports Protection Act (“PASPA”). PASPA, which Congress enacted in 1992 and prohibits state sanctioned sports gambling outside Nevada. Ironically, PASPA specifically granted permission to New Jersey to legalize sports betting so long as New Jersey enacted a system by 1993. At that time, Atlantic City was amidst a ten year run that saw casino revenue more than double, and New Jersey lawmakers lacked the necessary motivation to fix what was not yet broken.
New Jersey’s failure to take advantage of PASPA’s exemption has turned out to be a monumental mistake, as Atlantic City has seen its casino revenue cut in half over the last ten years to less than 3 billion dollars annually. Meanwhile, sports gambling, both legal and illegal, has increased exponentially. In fact, legal and illegal gambling on college and NFL football alone likely exceeds 100 billion dollars per year.
In 2012, New Jersey unsuccessfully challenged the constitutionality of PASPA. This time around, New Jersey sought to legalize sports betting by enacting SB 2460, which repealed certain state law restrictions on sports gambling. By extension, New Jersey took the position that a repeal of its own state law prohibitions on sports gambling was separate and distinct from the “authorization” of sports gambling proscribed by PASPA. Shortly after the passage of SB 2460, the four major professional sports leagues and the National Collegiate Athletic Association (“NCAA”) filed suit in New Jersey District Court to enjoin the implementation of SB 2460. The District Court subsequently granted summary judgment in favor of the sports leagues and the NCAA.
The Third Circuit affirmed the District Court’s decision, holding that regardless of whether New Jersey “artfully couched” SB 2460 as a repeal of existing state laws, the provisions nonetheless served to authorize sports gambling in violation of PASPA. Citing to its 2012 decision, the Third Circuit set forth that it would not “usurp Congress’ role simply because PASPA may have become an unpopular law.”
New Jersey has until September 8, 2015 to request an en banc review of the case, which would involve a re-hearing before all of the Third Circuit judges. While New Jersey may also petition the Supreme Court for writ of certiorari, the Supreme Court’s denial of New Jersey’s 2013 petition is an indicator that it is unwilling to review the case.
HRLegalist will continue to follow this story as the NFL regular season kicks off next week.