Hanging on by a “tail”: New Jersey’s 2014 effort to legalize sports gambling stays alive in the third circuit

Abstract

New Jersey is no stranger to this situation; this is the second time in two years that New Jersey legislators and state sports officials (collectively “the New Jersey parties”) have faced the NCAA, the NFL, the NHL, the NBA, and MLB (collectively the “Sports Leagues”) in the Third Circuit Court of Appeals. New Jersey has been on a quest to legalize sports gambling in the state for over five years. According to one estimate, legalized sports betting could generate as much as $120 million in tax revenue. The Professional and Amateur Sports Protection Act (“PASPA”), a federal statute en-acted in 1992 prohibiting state-sponsored sports gambling, is the primary obstacle preventing New Jersey legislators from successfully enacting a legalized sports gambling scheme in the state.

After the Third Circuit held that New Jersey’s 2012 Sports Wagering Law (the “2012 Law”) violated PASPA in NCAA v. Governor of New Jersey (“Christie I”), New Jersey legislators enacted a new sports betting law in October 2014 (the “2014 Law”). In an attempt to circumvent PASPA, New Jersey legislators crafted the 2014 Law to partially repeal the state’s sports betting laws. Legislators chose their words carefully, mirroring the language of PASPA and quoting the Third Circuit opinion of Christie I in the signing statement to demonstrate the legality of the bill. The Sports Leagues sued New Jersey Governor Chris Christie and other state gaming offi- cials, similar to when New Jersey enacted the 2012 Law, in NCAA v. Governor of New Jersey (“Christie II”). After New Jersey legislators enacted the 2014 Law, the Sports Leagues sought an injunction and claimed PASPA preempted the law. Christie I involved the constitutionality of PASPA itself, whereas Christie II analyzed the language of the 2014 Law to determine whether it constituted a repeal or authorization of state-sanctioned sports betting. After the Third Circuit declared that the 2014 Law violated PASPA, the New Jersey parties filed for a rehearing en banc. The Third Circuit granted the rehearing and vacated the judgment of Christie II.

This article argues the Third Circuit’s decision in Christie II correctly held the 2014 Law allows what PASPA prohibits. The Third Circuit still seems unsure of what state regulation PASPA would permit, and the New Jersey Parties reintroduced arguments of PASPA’s unconstitutionality at the rehearing en banc. The court should readdress the constitutionality of PASPA in their forthcoming opin- ion, most crucially the equal sovereignty doctrine. Part II details the history of PASPA’s enactment and outlines previous challenges to the constitutionality and statutory interpretation of the statute. Part III compares the holdings of Christie I and Christie II, outlining potential unresolved issues the court may address en banc. Part IV discusses the implications of the Third Circuit’s impending decision en banc on sports betting in New Jersey. Part V summarizes these arguments.

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