Supreme Court Ruling for New Jersey Opens Door to Sports Betting

All eyes, in the state of Washington and the entire country are on the Supreme Court to finally make a ruling on the sports gambling case of New Jersey. There are a lot of possible outcomes and they could all have a big impact on the future of sports betting in New Jersey and other states. However, the most likely outcome, based on the oral submissions presented in court, is that the court will declare PASPA unconstitutional. This would be the most favorable outcome for New Jersey and all those states that want to legalize sports betting.

The court may find that PASPA impermissibly imposes legislations on states which will be termed a direct violation of the 10^th Amendment. If that happens, New Jersey and other states will be free to come up with their own legislations about sports betting without the federal government’s interference. However, this is not the only hope for fans of sports gambling in New Jersey. It is possible that the Supreme Court will make a decision on narrow grounds. This means some sort of impartial cancellation of PASPA. It could rule that PASPA is indeed unconstitutional because it prevents states from repealing their restrictions on sports betting. It could also rule that New Jersey’s decision to lift its ban on sports gambling, racetracks and casinos is not in violation of PASPA because New Jersey would technically not be authorizing sports gambling. It would just be decriminalizing it. In case of any of these rulings, New Jersey will still be able to allow sports betting. However, a narrow ruling would not be beneficial to the other states looking to legalize sports betting.

If the court makes a narrow ruling, PASPA prohibitions will still be in place. States will still be forbidden from sponsoring, advertising, licensing, operating or promoting sports gambling. It would also leave in place PASPA’s prohibition against persons operating any sports betting schemes. It is important to note that New Jersey is not really challenging the prohibition of private parties. Their argument is that the Supreme Court should also invalidate section 3702(2) if it chooses to invalidate section 3702 (1) since section 3702 (2) was meant as a complement to section 3702 (1). However, it is important to ask whether a win for New Jersey either on statutory grounds or if the court finds that PASPA has no constitutional merit to stop any state from making their own laws, would pose any possibility of private companies being prohibited from operating sports books. If the unconstitutionalism of PASPA is only to the extent of it stopping states from repealing prohibitions on sports gambling, wouldn’t it then continue to prohibit sports gambling as an independent entity? Fortunately for New Jersey sports gambling enthusiasts, a repealed law is considered to never have existed in the first place. This means that a narrow decision that leaves section 3702(1) in place will have no effect on section 3702(2).

With all the possibilities in place, New Jersey sports betting operators are already excited and getting ready to cash in. Casinos, racetracks and a number of sports betting operators are already making preparations just in case the court rules in their favor. No one wants to be left behind.

The lawsuit against PASPA was filed in 2009 by Raymond Lesniak, who was a New Jersey senator at the time. He found it unfair that PASPA would allow a few states to legalize sports betting and disallow all the others. That, according to him, was unconstitutional discrimination. Lesniak said it was against the anti-commandeering principles for the congress to prevent states from legalizing sports betting. Being a liberal representative, it seemed almost ironic that Senator Lesniak would use the otherwise conservative 10th Amendment as defense. However, he said that his main fight was for the independence of states. He thought that allowing sports betting could be a way for various states to earn revenue. He argued that the ban was in fact supporting organized crime and offshore operators when it was possible to seize the opportunity and create jobs, boost tourism and improve economic activity. He said that New Jersey could earn up to $100 million in tax revenue if the ban was lifted. In his support, Dennis A. Drazin, then New Jersey Thoroughbred Horsemen Association, said sports betting could be the only way to save the horse racing industry since it would some excitement to it. Opponents argued that sports betting would do more harm than good. Jeff Beck, a member of the state council on compulsive gambling, said that if sports banning was legalized, there would be an increase of gambling addicts in the state. He believed that the benefits of sports gambling were not enough to risk that.

How then, did the PASPA law come to be? PASPA stands for professional and amateur sports protection act. It is also referred to as the Bradley Act since it was mainly sponsored by New Jersey’s Sen. Bill Bradley. It was meant to keep sports betting in the United States from spreading .The act outlaws sports betting in almost all the states. The states which are exempted are Nevada, Montana, Oregon and Delaware. The basis of exempting these states was their past legislations that were connected to legal forms of sports gambling. They were ‘grandfathered’ into PASPA.

In 2012, the people of New Jersey wanted their lawmakers to use a nonbinding referendum and legalize sports betting. It is at that point that other New Jersey legislators joined hands with Senator Lesniac. They wanted to provide a sports betting scene similar to that of Nevada. The bill was signed into law in January 2013 by Gov. Chris Christie despite the opposition from NBA, NFL, NHL, MLB and NCAA. However, the sports league successfully sued them and a districts court ruled that the state could not legally regulate sports betting based on PASPA. The state appealed to The Third Circuit Court of Appeal unsuccessfully.

That was not the end of the road for New Jersey. Sen. Lesniak supported another bill on the same and it passed in June 2014. Once more, the district court ruled that New Jersey could not regulate sports gambling. They appealed to The Third Circuit Court of Appeal again and it affirmed the district court’s ruling again. The state appealed for an en banc decision in The Third Circuit. Their appeal was granted but the state lost their case again. The case was finally heard by the Supreme Court of the United States in December 2017. New Jersey has obviously put in a lot of effort and time in the struggle to have online gambling legalized. Another notable person that publicly called for the repeal of PASPA is NBA commissioner, Adam Silver. Even though the NBA appeared to be against sports gambling, he expressed his opinions in the New York Times stating that PASPA belongs in the past. He said that the laws should change just like the forms and popularity of sports gambling has. He suggested that congress adopts a new framework which would make it possible for states to regulate and authorize sports betting as this would make it safer.