SBJ/May 6-12, 2013/In Depth

Can New Jersey beat the odds on sports wagering?

New Jersey lawmakers are still reeling from a recent setback to the state’s push to legalize sports gambling, which Gov. Chris Christie has championed as a taxable business for the cash-strapped state.

In late February, U.S. District Judge Michael Shipp struck down New Jersey’s sports wager law, which had allowed the state’s Division of Gaming Enforcement to license sports betting operations in casinos and racetracks.


The 2012 state law had bypassed the Professional Amateur Sports Protection Act, a federal law enacted in 1992 that prohibits sports betting in all states except Nevada, Delaware, Oregon and Montana. New Jersey’s law could have cleared the way for other states to legalize sports gambling.

Shipp presided over a case that pitted defendants Christie, state Gaming Enforcement Director David Rebuck and Racing Commission Executive Director Frank Zanzuccki against the NCAA, NBA, NFL, NHL and MLB. The leagues sued the state in August, calling the law a “clear and flagrant” violation of PASPA.

Lawyers for New Jersey first argued that the leagues could not demonstrate tangible harm if New Jersey allowed sports betting, but Shipp ruled against that argument in December. Lawyers then argued that PASPA was unconstitutional because it violated the 10th Amendment by commandeering the state’s right to change its own laws. They also argued that PASPA unfairly allows loopholes for the four other states.

Shipp struck down New Jersey’s claims of 10th Amendment violation because Congress can regulate local businesses if
If New Jersey had its way, sports books like this one in Las Vegas would be allowed.
Photo by: AP Images
there is the presumption of interstate commerce. He said that the four states exerted their rights by grandfathering in gambling during PASPA’s ratification in 1992. New Jersey could have done the same during that time, but chose not to.

The state has filed an appeal in the 3rd U.S. Circuit Court of Appeals, which will hear arguments from both sides on June 26.

Gilbert Brooks, a gaming lawyer with Duane Morris, said he does not believe the decision will be reversed.

“The better card to play is to try and change legislation at the federal level,” said Brooks, who represents the Atlantic Club casino hotel and Sportech PLC, a supplier of football and horse racing betting pools. “That’s basically what Shipp said in his ruling — if you want to change the law, change it with Congress.”


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