3rd Circuit (en banc) May Rehear Sports Betting Ruling


Two recent developments might have raised the odds that New Jersey will get another chance to argue in court in support of its law allowing legal sports betting in the state.

The 3rd U.S. Circuit Court of Appeals in Philadelphia confirmed Wednesday that two judges have taken themselves off the case. That means New Jersey needs six out of 10 judges to agree to hear its appeal, instead of seven out of 12. No reasons were given for the recusals.

A day earlier, the court had ordered the four major pro sport leagues and the NCAA, who sued New Jersey in 2012 to prevent sports betting in the state, to file a response to New Jersey’s request within two weeks. Legal experts say that’s a sign the court is leaning toward rehearing the case.

“Most appellate courts swiftly deny a rehearing without asking for an answer brief,” said Daniel Wallach, a Florida-based attorney specializing in sports gambling cases. “This signals that it’s not only possible, but likely” that New Jersey will get a rehearing.

Last month, a three-judge panel on the 3rd Circuit held by a 2-1 margin that New Jersey violated federal law when it repealed prohibitions against sports gambling. The judges said the move effectively amounted to state authorization that runs afoul of a 1992 federal law prohibiting state-authorized sports betting in all states but Nevada and three others that had offered some form of pool wagering.

A party that loses a 3rd Circuit ruling can request a rehearing by the full circuit, which comprises roughly two dozen judges. Only the 12 active, or non-senior, judges vote on whether to allow a rehearing, Wallach said, meaning seven judges would have to agree to give New Jersey a majority, according to the circuit’s operating procedures.

With Judges Patty Shwartz and Michael Chagares recused, New Jersey now only needs six. Wallach said the fact that the request was sent to the leagues on Tuesday demonstrates that several judges already may be disposed toward voting for a rehearing.

The 3rd Circuit declined New Jersey’s request for a rehearing in 2013 in an earlier iteration of the case, also after a 2-1 ruling against the state. If a rehearing is ordered this time, any decision would likely be appealed to the U.S. Supreme Court, which declined to hear the 2013 case.

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