Oral Arguments In New Jersey Sports Betting Case Begin Wednesday

Posted By Steve Ruddock on February 15, 2016 - Last Updated on February 16, 2016

On Wednesday, oral arguments in the latest chapter of the longstanding fight between New Jersey and the NCAA and professional sports leagues will commence – although according to attorney Daniel Wallach, there could be a delay if Justice Scalia’s funeral falls on Wednesday.

Not to be melodramatic about it, but this is a critical moment for the future of gambling in the United States.

Daily fantasy sports may be the hot topic, and a point of legal contention in an ever-expanding number of states. But it’s the New Jersey sports betting case that could have the biggest impact on gambling laws in the United States moving forward, as a New Jersey victory would open the door to legal sports betting across the country, and potentially lead to the repeal or gutting of the Professional and Amateur Sports Protection Act (PASPA) that currently limits legal sports betting to Nevada, and to a lesser extent, Oregon, Montana, and Delaware.

If New Jersey wins, sports betting will not be legal, nor will PASPA be struck down. Rather, a New Jersey victory would lay out a clear path other states could follow (if they so choose) in order to bypass PASPA, and would likely lead to Congress looking into the 1992 law’s merits at some point down the road.

How we got here

After two years of hard work led by State Senator Raymond Lesniak, in 2011 New Jersey crafted a ballot referendum that would legalize sports betting at the state’s casinos and racetracks. As with all expansions of gambling in the Garden State, the measure had to pass a ballot referendum, which it did in November of 2011. With the public’s support, the legislature passed a bill that would legalize sports betting in 2012.

The NCAA and the professional sports league immediately filed suit, kicking off a legal battle that what would later be known as Christie I. New Jersey lost the case, and the ensuing appeal on the grounds that the statute was in violation of PASPA. In 2013, the Supreme Court of the United States declined to hear the case, putting the final nail in the coffin of Christie I, but not New Jersey’s attempts to legalize sports betting.

Having learned from its previous attempt, in 2014 New Jersey took a different crack at legalizing sports betting. Once again led by Senator Lesniak, the legislature passed another sports betting bill, however, this time the state wasn’t legalizing sports betting, but rather repealing old, pre-PASPA laws prohibiting private businesses from accepting sports betting wagers.

The state was once again sued by the NCAA and the professional sports leagues, and once again the leagues beat the state in court in what would become known as Christie II.

However, the maneuver was so strategic (the new law was basically tailored to comply with the arguments used in the first ruling by the Third Circuit) that on appeal one of the Third Circuit judges who ruled against New Jersey in 2013, Judge Julio Fuentes, ruled for the state this time around. The problem was that the other two judges ruled against New Jersey.

In August of 2015, the Third Circuit, in a 2-1 decision, upheld the lower court’s ruling.

According to the majority opinion, New Jersey didn’t go far enough in its repeal (limiting it to casinos and racetracks) which made the new law an expansion of sports betting, and not, as the state argued, a repeal of older laws.

New Jersey continued to fight, filing an appeal, and in a very rare en banc ruling, the case will now be reheard in the Third Circuit. But this time instead of three judges, there will be a panel of 12 judges from the Third Circuit Court of Appeals deciding the case.

The list of judges, and their previous ruling in the New Jersey sports betting saga are:

  1. Thomas Ambro
  2. Julio Fuentes (ruled against New Jersey in 2013 and with the state in 2015)
  3. D. Brooks Smith
  4. D. Michael Fisher (ruled against New Jersey in 2013)
  5. Kent Jordan
  6. Thomas Hardiman
  7. Joseph Greenaway, Jr.
  8. Thomas Vanaskie (ruled for New Jersey in 2013)
  9. Cheryl Ann Krause
  10. L. Felipe Restrepo
  11. Marjorie Rendell (ruled against New Jersey in 2015)
  12. Maryanne Trump Barry (ruled against New Jersey in 2015)

What to expect this week

En banc rulings are rare, and the granting of one would seem to be a good sign for New Jersey, but legal experts have cautioned that this is overly optimistic.

Arguing for New Jersey will be Ted Olsen of Bush v. Gore and California Proposition 8 fame, and for the sports leagues Paul Clement, described by Law360 as one of the most prolific Supreme Court attorneys of the past decade. Interestingly, Clement succeeded Olsen as U.S. Solicitor General in 2004, and to bring this full circle, Olsen’s opposing council in Bush v. Gore, and later co-counsel in the Prop 8 fight was none other than DraftKings attorney David Boies.

The case will likely revolve around the differences between Christie I and Christie II, according to the Law360 blog, and for the leagues, will likely rely on finding fault in Judge Fuentes’ second opinion, as he is the only person to rule in both cases:

“While there are valid points both ways, New Jersey did go far out on the limb by actually decriminalizing sports wagering in certain locations,” Stephen D. Schrier, co-chair of Blank Rome LLP’s gaming practice and an adjunct professor at Rutgers Law School told Law360.

“They did so because of the language in Christie I. If the court wants to narrowly interpret PASPA, New Jersey should win its case.”

Opening arguments begin this week, but a decision isn’t expected until June. However when the Third Circuit rules I expect two things: a close decision, and more appeals from whichever side loses.

Anyone interested in the case would do well to follow the following people on Twitter:

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Steve Ruddock

Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.

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