A federal appeals court on Tuesday dealt a body blow to New Jersey's plan to legalize sports wagering at casinos and horse-racing tracks, finding federal law pre-empts it.
Gov. Chris Christie, reeling but unbowed, says he intends to take the case to the U.S. Supreme Court.
The ruling, in National Collegiate Athletic Association v. Christie, is a win for the National Collegiate Athletic Association and professional sports leagues who challenged the state action.
The U.S. Court of Appeals for the Third Circuit held the 1992 Professional and Amateur Sports Protection Act (PASPA) a valid exercise of congressional authority and said the leagues have standing to sue to enforce it.
New Jersey argued PASPA violates the anti-commandeering doctrine, which bars Congress from making states carry out the will of federal officials. But the appeals court said it has never invalidated a law under the doctrine and the U.S. Supreme Court has done so only twice.
New Jersey also took issue with the federal law's grandfather clause that allowed sports gambling to continue in Delaware, Oregon, Montana and Nevada. But the appeals court said there was no obligation for uniformity of treatment under the Commerce Clause, rejecting New Jersey's assertion that laws treating states differently can survive only if they are intended to "remedy local evils."
Colin Reed, a spokesman for Gov. Christie, says of the ruling, "There's no reason [sports betting] should be limited to only a handful of [grandfathered] states. It's a fundamental issue of fairness, and Governor Christie will not give up this fight."
In 2011, a constitutional amendment authorizing sports wagering was approved in a state referendum, and the statute was enacted on Jan. 17, 2012.
It permits wagering on professional and collegiate sporting events that take place outside New Jersey and do not involve a New Jersey team.
The NCAA — along with the National Basketball Association, the National Football League, the National Hockey League and Major League Baseball — sought a declaration that the law violated PASPA.
In February, U.S. District Judge Michael Shipp ruled in favor of the leagues, finding they have standing based on their assertions of reputational harm by the connection with gambling.
U.S. Circuit Judges Julio Fuentes and D. Michael Fisher affirmed Tuesday, with one dissenter.
Judge Thomas Vanaskie, noting that New Jersey regulates games of chance and casino gambling, said it would be natural for citizens to expect state law would govern sports gambling. That belief would be supported by passage of the referendum. "Thus, accountability concerns arising from PASPA's restraint on state regulation also counsel in favor of concluding that it violates principles of federalism," Vanaskie wrote.
Christie spokesman Reed said that the dissent "makes the issue all the more appropriate to be decided by the U.S. Supreme Court."
State Sen. Raymond Lesniak, D-Union, a prime sponsor of the legislation, says the dissent gives him hope the ruling may be overturned.
"Las Vegas is jammed for Super Bowl week and for the NCAA's Final Four weekend, while Atlantic City is a ghost town," he says. "That's just wrong. The only other beneficiaries of the court's ruling today are sports betting rings run by organized crime and the offshore Internet sites for sports betting."
Bernard Bell, who teaches constitutional law at Rutgers Law School-Newark, says the court properly concluded that sports betting affects interstate commerce and thus falls within Congress' powers under the Commerce Clause.
U.S. Attorney Paul Fishman, who represented the federal government, says Congress has "the constitutional authority to make uniform national policy and not to leave it to the decisions of individual states."
The state's attorney, former U.S. Solicitor General Theodore Olson of Gibson, Dunn & Crutcher in Washington, D.C., did not return a call.
Another former U.S. solicitor general, Paul Clement of Bancroft in Washington, D.C., who argued for the leagues, referred a call to the NFL, which declined to comment.