3d Cir. Requires States to Go “All In” to Establish Legal Sports Gambling Outside Nevada


Kevin Braig

On August 25, the Third Circuit Court of Appeals reminded New Jersey lawmakers seeking to nullify a federal ban on sports wagering outside Nevada’s borders of one of the fundamental rules of gambling: To win a big bet, you have to go all in.

In National Collegiate Athletic Asso’c. v. Governor of the State of New Jersey, the Third Circuit ruled that New Jersey’s so-called “repeal” of its sports wagering prohibitions as applied to casinos and racetracks still constituted the authorization of such wagering in violation of the Professional and Amateur Sports Protection Act (PASPA), which prohibits all sports wagering outside Nevada subject to extremely limited exceptions for Delaware and a few other states.

In a previous 2013 decision authored by Judge Julio M. Fuentes, the Third Circuit rejected New Jersey’s argument that PASPA unconstitutionally commandeers the state’s legislative power with respect to its state gambling laws. Following that decision, New Jersey amended its law and pushed its sports gambling at casinos and racetracks chips back into the center of the table.

In a 2-1 decision in which Judge Fuentes dissented, Judge Marjorie Rendell agreed that had New Jersey’s law “repealed all prohibitions on sports gambling, we would be hard-pressed … to find an ‘authorizing law’ in violation of PASPA.”

But Judge Rendell found the continuing prohibition on sports gambling in New Jersey except at casinos and racetracks rendered New Jersey’s law a de facto prohibited authorization of sports gambling even though the law was structured as a repeal of state legislation.

New Jersey’s law “allows casinos and racetracks and their patrons to engage, under enumerated circumstances, in conduct that other businesses and their patrons cannot do,” Judge Rendell wrote. “That selectiveness constitutes specific permission and empowerment.”

Judge Rendell found that New Jersey could not “use clever drafting” to escape the supremacy of federal law.

“While artfully couched in terms of a repealer, the 2014 Law essentially provides that, notwithstanding any other prohibition by law, casinos and racetracks shall hereafter be permitted to have sports gambling,” Judge Rendell wrote. “This is not a repeal; it is an authorization.”

Judge Fuentes saw the case differently.

Like a sharp card player, New Jersey Senator Raymond Lesniak, the foremost advocate of bringing sports gambling to New Jersey, repeatedly insisted in the months leading up to Judge Rendell’s decision that Judge Fuentes had dropped a “tell” into his 2013 opinion upholding the constitutionality of PASPA that instructed New Jersey how it could legalize sports gambling via repeal.

At oral argument in March, Michael Griffinger, the attorney for the New Jersey state legislature, paraphrased Dr. Seuss and argued to Judge Fuentes and the other members of the panel, “I meant what I said and I said what I meant. We followed your guidance 100 percent.”

“Because I do not see how a partial repeal of prohibitions is tantamount to ‘authorizing by law’ a sports-wagering scheme in violation of PASPA, I respectfully dissent,” Judge Fuentes wrote.

The dissenting opinion proved that Senator Lesniak did indeed spot Judge Fuentes’ “tell,” which is usually enough to take down the pot at the card table.

But the senator’s savvy play still was not enough to take down PASPA.

This article was authored by Kevin Braig. If you would like more information, please contact Kevin at kbraig@slk-law.com.


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