Third Circuit Rehears NJ Sports Betting Appeal

Third Circuit Rehears NJ Sports Betting Appeal John Disney/Daily Report Paul D. Clement

The state of New Jersey got a second roll of the dice before the U.S. Court of Appeals for the Third Circuit in its attempt to legalize sports betting.

The en banc court reheard argument Feb. 17 six months after a divided three-judge panel struck down the Garden State’s latest sports betting law Aug. 25, with the majority saying the state’s most recent attempt still runs afoul of the 1992 federal Professional and Amateur Sports Protection Act (PASPA), which bars states from authorizing sports betting.

In her majority opinion in National Collegiate Athletic Association v. Christie, Senior Judge Marjorie Rendell said PASPA prohibits states from “authorizing by law” statutes that permit sports betting.

The argument got off to a somber start, with Judge Thomas Ambro paying a brief tribute to the late U.S. Supreme Court Justice Antonin Scalia, who died Feb. 13.

“He was, in my view, perhaps the greatest influential jurist of my generation,” Ambro said.

Arguing the case for the National Collegiate Athletic Association and several professional sports leagues was Paul Clement, former U.S. solicitor general and Scalia’s law clerk from 1992 to 1993. Representing New Jersey was Theodore Olson of Gibson, Dunn & Crutcher.

Olson questioned the constitutionality of PASPA, which he claimed violated the anti-commandeering portion of the 10th Amendment by using the states as instruments of Congress.

“It would conscript the states and municipalities into the federal government,” Olson told the court.

A point of debate between Olson and the judges was whether a repeal, or partial repeal, of the 2014 New Jersey law prohibiting sports betting constituted an authorization of that activity.

Olson noted that it was the position of the sports leagues that the states could repeal the law and have it amount to authorization, as it was the state’s right to do so, but in response to a question from Rendell, he said that he did not agree with the leagues’ position that a repeal meant sports betting would be permitted throughout New Jersey.

It turned back to the constitutional question, Olson argued. “The dilemma facing New Jersey is Congress requiring us to have laws on the books regulating sports betting.”

Judge Kent Jordan replied that New Jersey would still determine the time, place and means by which gambling takes place.

The point, according to Olson, was that PASPA violated the 10th Amendment, but he added that there were ways to make it comport.

Ronald Riccio, representing the New Jersey Thoroughbred Horsemen’s Association, followed Olson. Riccio argued that sports betting in New Jersey would be self-regulated once legalized.

But Jordan asked what would happen if that self-regulation turned out to be a travesty. Riccio responded that the state would have to step in.

Clement, representing the leagues, told the court PASPA did not require states to keep sports-betting laws on the books; he said they just can’t sponsor, promote, or advertise sports betting.

Clement said that it is perfectly constitutional for the federal government to require states not to enact certain laws—and partial repeals of the law would be consistent with PASPA, he added.

Decriminalizing bets among friends under $1,000 would be permissible under PASPA, Clement said, but putting sports betting in the casinos and racetracks where the New Jersey state government regulates gambling would violate the act.

Judge Julio Fuentes asked Clement if repealing all of the state’s gambling laws would be permissible under PASPA.

“Chaos would ensue, kids would be gambling,” Fuentes said.

Clement said that is where the state would have to step in. He added that the federal government, under the supremacy clause, has the power to tell states which areas are off-limits for legislation.

Gov. Chris Christie has championed sports betting as a way of revitalizing Atlantic City, New Jersey’s beleaguered casinos.

Christie on Oct. 17, 2014, signed S2460, which was introduced by state Sen. Raymond Lesniak, D-Union, and a bipartisan group of seven other senators days earlier, and passed within a week by both chambers of the Legislature with only slight opposition.

At Christie’s insistence, the legislation included language that prohibits wagering on any New Jersey colleges, regardless of where the games are played, and limits sports betting to those aged 21 and older.

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