By Brent Johnson | NJ Advance Media for NJ.com
on August 27, 2015 at 8:30 AM, updated August 27, 2015 at 10:00 AM
TRENTON — New Jersey’s four-year effort to legalize sports betting suffered another legal setback Tuesday, when a three-judge U.S. Third Circuit Court of Appeals panel rejected the state’s latest plan to allow casinos and racetracks to allow wagering on games.
But the fight is expected to continue — both in court and in Congress. Here is a look at what’s next in the battle:
A RE-HEARING?
Technically, state officials can’t appeal Tuesday’s decision. But they can ask the full Third Circuit Court of Appeals in Philadelphia for an “en banc” review in which all 23 judges in the circuit will re-hear the case.
Spokespeople for Gov. Chris Christie’s administration did not return a message Wednesday seeking comment on whether they will ask for the review. But both the state and the New Jersey Horse Racing Association are expected to do so. The parties have 14 days to file the request.
“This is too valuable to the state of New Jersey, to casinos, and to racetracks for us not to go all the way,” state Sen. Raymond Lesniak (D-Union), the lawmaker who has led the battle for legal sports betting, said Wednesday.
At issue is whether New Jersey’s plan violates a 1992 federal ban on sports betting called the Professional and Amateur Sports Protection Act (PASPA).
The state has been trying to implement sports betting at casinos and tracks in an effort to save both financially strapped Atlantic City and the struggle New Jersey horse racing industry. But the NCAA, NFL, NBA, MLB, and NHL sued, saying the move violates the ban and threatens to hurt the integrity of their games.
A federal judge and a Third Circuit panel sided with the leagues in 2013. But the state tried to circumvent the ban with the new plan, saying the federal law does not prevent private casinos and tracks from allowing sports betting as long as the state doesn’t regulate it.
In November, though, a federal judge shot down that plan. And the Third Circuit panel followed suit Tuesday, saying New Jersey can’t use “clever drafting” to get around the federal law.
The case has already cost New Jersey taxpayers millions of dollars in legal fees over the last four years, but state officials say sports betting will lead to tens of millions of dollars in revenue.
THE STATE’S CHANCES?
Legal scholars say “en banc” reviews happen rarely. But attorneys said New Jersey’s chances of getting one in this case are good.
Dennis Drazin, an attorney and adviser for Monmouth Park race track in Oceanport, said noted that Judge Julio Fuentes, who voted against the state in 2013, was the lone judge on the panel to vote in favor of the state Tuesday. Fuentes wrote that “there is simply no conceivable reading of PASPA that could preclude a state from restricting sports wagering.”
“It’s ironic that the judge who actually determined the case the first time around is now saying the other two judges didn’t properly decide the case,” Drazin said.
Daniel Wallach, a gaming and sports law attorney, agreed.
“This is an exceptionally important case,” said Wallach, a lawyer with Becker & Poliakoff in Fort Lauderdale, Fla. “I think New Jersey has a pretty good shot.”
U.S. SUPREME COURT NEXT?
If the state isn’t granted a review, officials could still petition the U.S. Supreme Court to hear the case.
But the court grants only one percent of petitions, and it already denied New Jersey’s request in 2013 to hear the first attempt to legalize sports betting.
Wallach said asking for the full Third Circuit to re-hear the case will likely be the end of the line for New Jersey.
“This is their last play,” the attorney said. “The Supreme Court is not going to take the case.”
CONGRESSIONAL ACTION?
New Jersey’s case has been watched closely across the country as the push to legalize sports betting has grown nationwide. A number of other states have introduced bills to legalize such wagering this year: Indiana, Minnesota, New York, South Carolina, and Texas.
Still, some advocates say the best avenue is to lobby Congress to vote to repeal or alter the federal ban.
Though NBA Commissioner Adam Silver said last year he favors legalizing sports betting, league spokesman Mike Bass said that he agreed with the court’s decision Tuesday and that “the appropriate path to legal sports betting is through Congress.”
U.S. Sen. John McCain (R-Ariz.) has called for Congress to reexamine the ban.
A pair of New Jersey congressmen, U.S. Reps. Frank LoBiondo (R-2nd Dist.) and Frank Pallone (D-6th Dist.), have also pushed for legislation to legalize sports betting.
Drazin, though, is leery of relying on Washington.
“Congress doesn’t really move a lot of things,” the attorney said. “Congress has other priorities on their plate. I don’t think fixing sport betting is high on that list.”
Wallach said a congressional response may be “years away.”
“It’s not as close as Sen. McCain and Adam Silver are suggesting,” the lawyer said. “The sense of urgency is now gone with New Jersey’s effort basically teetering on its last leg.”
Lesniak said the National Conference of State Legislatures recently passed a resolution asking Congress to recognize that states should have sovereignty on whether to allow sports betting.
“It’s a slim hope, but it’s gaining momentum,” the state senator said. “I still think our best chance right now in the Third Circuit.”
Brent Johnson may be reached at bjohnson@njadvancemedia.com
