For the second time in two years, the Third Circuit Court of Appeals has rejected the state of New Jersey's attempt to legalize sports betting because it conflicts with federal law.
In a 2-1 decision in NCAA v. Christie (Christie II)1, the Third Circuit in August affirmed a District Court ruling that a New Jersey statute seeking to partially repeal the state's ban on sports betting constituted an "authorization" in violation of the federal Professional and Amateur Sports Protection Act (PASPA).
New Jersey has waged a four year legal battle against five major sports leagues and the federal government to legalize sports betting in the hopes of rescuing the state's flagging casino industry. A statute expressly authorizing sports betting was struck down by the District of New Jersey in 2013 under the Supremacy Clause of the Constitution. The Third Circuit affirmed (Christie I)2, finding that PASPA, which bans state-sponsored sports gambling, did not commandeer state officials into regulating sports wagering in violation of the Tenth Amendment. States, the court determined, were not required to keep prohibitions on sports betting in place and retained the option to repeal those prohibitions altogether.
In October 2014, New Jersey availed itself of the option presented by the Third Circuit's ruling by enacting a new statute that repealed the state's prohibition on sports betting, but only at state-regulated casinos and racetracks and only for bettors 21 years or older.3 The leagues once again sued to prevent implementation of the law, arguing that the state's selective repeal was merely an authorization by another name. In November 2014, the District of New Jersey sided with the leagues.4
On appeal, the Third Circuit agreed that "[w]hile artfully couched in terms of a repealer," the 2014 law authorizes sports betting in violation of PASPA. The majority explained: "[T]he 2014 Law authorizes sports gambling by selectively dictating where sports gambling may occur, who may place bets in such gambling, and which athletic contests are permissible for such gambling. . . . That selectiveness constitutes specific permission and empowerment." The court concluded, "States may not use clever drafting . . . to escape the supremacy of federal law."
Interestingly, Judge Julio Fuentes, who wrote the majority opinion upholding PASPA in Christie I, was the lone dissenting judge in Christie II. This time around, Judge Fuentes sided with New Jersey, writing that...
