PHILADELPHIA – The fight over legalized sports gambling in New Jersey returned to a federal appeals court Tuesday, where attorneys for the state and the country’s major sports leagues spent nearly an hour parsing language in a decades-old federal statute and in recent court rulings.
At issue: Whether a 2014 New Jersey law repealing prohibitions against sports gambling violates the 1992 federal Professional and Amateur Sports Protection Act, which says states cannot “sponsor, operate, advertise, promote, license or authorize” sports betting.
A good portion of Tuesday’s oral arguments before the 3rd U.S. Circuit Court of Appeals focused on the meaning of the word “authorize,” and whether New Jersey did that when Gov. Chris Christie signed the law striking the betting prohibitions.
Attorneys from both sides endured sharp questioning from the court, which heard a previous incarnation of the case in 2013. In the ruling that followed that argument, the court said New Jersey couldn’t be prevented from repealing its sports gambling laws. The state seized on that language to write its 2014 law.
New Jersey is hoping sports gambling will reap tens of millions of dollars in revenue and help turn around the flagging fortunes of its casino and horse racing industries. The leagues have said expanding sports gambling will threaten the integrity of their games and lead to increased incidences of game-fixing.
Paul Clement, an attorney representing the NFL, NBA, NHL, Major League Baseball and the NCAA, said New Jersey wasn’t just repealing laws against sports gambling. He said the state would restrict sports betting to heavily regulated casinos and racetracks, limit bets to people over 21 and bar bets on in-state teams.
“A partial repeal that selects the favoured venues and dictates who’s going to engage in sports gambling and on what games they’re going to bet on” amounts to state authorization, Clement said.
Arguing for New Jersey, Theodore Olson called it “Orwellian” that New Jersey would purportedly be in violation of federal law by allowing sports gambling in certain areas but would be OK if it allowed it everywhere. Besides, he added, “everything in New Jersey is regulated,” from muffler shops to beauty salons.
Ronald Riccio, a lawyer representing the New Jersey Thoroughbred Horsemen’s Association, told the judges that Monmouth Park, the only venue in the state to prepare to begin offering sports betting, would have its betting solely regulated by an independent group.
“It will also be under all state and federal consumer protection laws,” he said. “The only thing regulated is sports betting itself. The regulation is entirely up to the private sector as it sees fit.”
Though no casinos have committed to offering sports gambling while the case goes through the courts, the leagues contend that allowing sports gambling there amounts to the state playing a regulatory role because the casinos are state-licensed.
Judge Julio Fuentes queried Peter Phipps, a Department of Justice lawyer appearing in support of the leagues, on whether a sports betting operation would be functioning under a casino’s license if it hadn’t had to apply or pay a fee.
The judge likened it to driving a car with someone else’s license. “Isn’t a casino license not transferable? I can’t imagine it would cover somebody else’s sports betting operation,” Fuentes said.
The case dates back to 2012 when the leagues and NCAA sued the state to stop its initial sports gambling law from being implemented. The state has suffered court defeats since then and failed in an attempt to have the U.S. Supreme Court hear its constitutional challenge last year.
Attorneys on Tuesday acknowledged that the 2014 sports gambling law was worded explicitly to follow the 3rd Circuit’s 2013 ruling.
In recent months, NBA Commissioner Adam Silver and Major League Baseball Commissioner Rob Manfred have separately expressed some level of support for taking a new look at legalized sports betting outside Nevada, the only state to allow betting on individual games at betting parlours.