Legalized sports betting hangs in balance with New Jersey appeal hearing

Legalized sports betting hangs in balance with New Jersey appeal hearing

Care about the future of sports betting in the United States? Wednesday’s hearing in NCAA et al v. Christie will play a pivotal role in its future

The 3rd U.S. Circuit Court of Appeals will hold an en banc rehearing in New Jersey’s fight against the NCAA and American professional sports leagues, which sued in 2014 when the state passed a law that legalized Las Vegas-style sports betting.

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Here’s what you need to know about the hearing, which begins 11 a.m. ET Wednesday in Philadelphia:

The back story

In 2009, New Jersey state senator Ray Lesniak (D-Union) filed a lawsuit in district court claiming that the Professional and Amateur Sports Protection Act, or PASPA, is unconstitutional. PASPA in 1992 effectively banned sports betting in all but four states, most notably Nevada. This set New Jersey’s sports betting plan in motion.

New Jersey Gov. Chris Christie in 2012 signed legislation legalizing sports betting in the state, as a way to drive revenue and interest back into the state’s dying gaming industry. The law allows any casino or racetrack in New Jersey to accept wagers on college and pro sports, except games involving college teams from the state or college games hosted in New Jersey.

Eight months later, the NCAA, NFL, NBA, NHL and MLB joined together to sue New Jersey and prevent the state from offering sports betting. The leagues have won every court battle along the way, including a 2-1 decision in the 3rd Circuit last August.

The biggest issue at hand — and what the leagues argue New Jersey’s law violates — is PASPA. New Jersey’s current sports betting law was passed at the state level, but the leagues say it violates federal law.

So what’s the problem?

The leagues argue legalized sports betting would damage the integrity of their games and result in more game-fixing. The NFL and NCAA remain staunchly opposed, while the NHL and MLB have backed off slightly. NBA commissioner Adam Silver endorses a legalized, federal framework for sports betting, but the NBA remains in this lawsuit because it is against state-by-state regulations.

New Jersey’s law would not provide a regulatory framework of any kind — the casinos and tracks would police and monitor themselves. Many in favor of sports betting hope New Jersey wins not necessarily for the state’s benefit, but so that PASPA is revisited and possibly repealed.

Wednesday’s hearing

New Jersey will argue its case in front of all 12 active 3rd Circuit judges. It needs a 7-5 ruling to prevail. A ruling is not expected for several months — meaning late spring or early summer.

En banc hearings are extremely rare, and the fact that one was granted is encouraging for New Jersey. Per ESPN, the 3rd Circuit grants an en banc hearing in roughly one of every 1,000 cases.

What if New Jersey wins?

If the state wins, it will likely be able to offer sports betting immediately, though the leagues would file a temporary injunction to stop it before trying to take the case to the U.S. Supreme Court. A hearing there would be a long shot. If New Jersey loses, the state’s sports betting dream would be all but dead.

A New Jersey victory would create “binding precedent” in Pennsylvania and Delaware, per, and those states could set sports betting frameworks in motion shortly after. Pennsylvania’s legislature passed a resolution last week asking for the repeal of PASPA. Delaware already offers legal parlay wagering. If New Jersey wins, the 3rd Circuit ruling will be good precedent for any other states looking to legalize sports betting in the future.

If the leagues do lose, they’d certainly prefer federal regulation to none at all, which means they will have to look at repealing PASPA. That would open the door for any state to legalize sports betting.

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