Court rejects attempt to legalize sports betting

Sports-betting fans in New Jersey may finally have run out of luck.

A federal appeals court rejected the state’s attempt to legalize sports betting for the third time in three years.

The U.S. Court of Appeals for the Third Circuit, ruling in Philadelphia, said that the state’s initiative to legalize sports betting at casinos and race tracks – an effort to revitalize the faltering casino industry – breached the federal Professional and Amateur Sports Protection Act (PASPA), which banned sports betting in all but a handful of states.

“States may not use clever drafting . . . to escape the supremacy of federal law,” the court said in its majority opinion, written by Judge Marjorie Rendell.

A spokesman for state Senate President Stephen Sweeney said state lawyers were still reviewing the decision, and hadn’t made a decision about what steps, if any, New Jersey would take.

Given that the U.S. Supreme Court declined to hear an earlier appeal, the ruling would seem to foreclose further legal maneuvers to revive the fortunes of sports gambling in New Jersey.

Indeed, during oral arguments in the case in February, seemingly exasperated justices peppered Theodore Olson, a former solicitor general who represented New Jersey, with questions, with some voicing open skepticism.

“We’re on what, the fourth or fifth iteration of New Jersey trying to do it [sports gambling],” Judge Kent Jordan asked.

New Jersey voters amended the state constitution in 2011 to permit sports betting at struggling casinos and racetracks while barring wagers on New Jersey college teams or on any collegiate event in the state.

The National Collegiate Athletic Association, the National Basketball Association, the National Football League, and others sued to prevent sport gambling in New Jersey from going forward.

The PASPA, enacted in 1992, limited sports betting to Nevada, Montana, Delaware, and Oregon. It also gave New Jersey the opportunity to enact a law authorizing sports betting in the state through 1993, but the state failed to do so.

In its opinion, the Third Circuit court acknowledged, as it has in the past, that New Jersey faces tough times from the decline of the casino industry.

But the appeals court said that the PASPA’s meaning was unequivocal and that no amount of legal or legislative finesse could overcome its restrictions.

The case turned on a technical argument over New Jersey’s proposed regulatory scheme for overseeing sports betting. After New Jersey residents voted to amend the state constitution in 2011, the state legislature enacted a detailed regulatory scheme for overseeing sports betting.

A federal district judge overturned that plan, and in 2012, the Third Circuit court affirmed. The state responded by eliminating all state laws governing sports betting in New Jersey, effectively deregulating the industry. The state’s lawyers argued that although PASPA barred states from authorizing sports betting, nothing in the law kept it from declining to regulate the industry.

A three-judge panel of the Third Circuit court found last August that the law was a back door means for permitting sports betting. The full court agreed to rehear the case last year, and issued its opinion on Tuesday.- The Philadelphia Inquirer