Hopes for Changing Sports Wagering Laws in NJ Remain Shrouded in Uncertainty

Proposed changes for Sports Wagering Laws, in New Jersey, face scrutiny during an oral showdown, on Wednesday, in a federal appellate court before 12 justices.

A long long fight!

The court case over sports wagering laws is between New Jersey, represented by former Solicitors General Ted Olson, and the four major sports leagues-National Football League (NFL), National Basketball Association (NBA), Major League Baseball (MLB), National Hockey League (NHL), and the National Collegiate Athletic Association (NCAA), represented by Paul Clement. In October 2015, the U.S. Court of Appeals for the Third Circuit granted New Jersey Government the petition for an en banc hearing for the lawsuit against the leagues that had been ongoing since 2012. The main point for the hearing was to decide the future of Sports Wagering Laws in New Jersey and allow them to remove certain restrictions against sports betting.

The PASPA issue

Under the 1992 federal law, the Professional and Amateur Sports Protection Act (PASPA), sports betting was restricted in 46 states; including New Jersey. A court ruling stating that these bans are unlawful would be required for NJ to break free of these prohibitions.

Betting on sports increases interest and popularity of a sport; Adam Silver, NBA commissioner, has declared his wish for the federal ban on sports betting to be lifted and replaced with a regulatory scheme. However, the sports leagues are opposed to NJ’s plans, as they believe that freedom of sports betting would increase match fixing and introduce other worrying aspects of gambling into the games. This is what separates sports betting from other forms of gambling; making regulation a tricky matter.

The possible outcomes and consequences

A win for NJ would initially only affect sports gambling within the state boundaries, however, The United States Court of Appeals for the Third Circuit

would likely eventually allow state-based wagering laws for Delaware, Pennsylvania and the U.S. Virgin Islands.

A victory for the sports league, on the other hand, would maintain Nevada’s dominance in sports betting and crush Atlantic City’s ambitions for entering into competition for them.

The Arguments

Olson argued about the unregulated nature of Sports betting in the country and that if total freedom for sports betting regulations were granted, NJ would be pleased with that outcome as there is more than enough business to go around.

NJ also argued that PASPA violates the Tenth Amendment and prevents the state from exercising their own powers. The amendment says that states do not want to be enforced into policies dictated by the federal government that are at odds with their own. Olson further argued that NJ has to use their own resources to uphold a federal ban that they want repealed.

Clemens counter argued that NJ is simply looking to authorizing sports betting for themselves, albeit only at specific locations.

The lawyers also mentioned the “equal sovereignty doctrine rules” which guarantees that all states are to be treated equally by the federal government; PASPA allowing four states to practice sports betting while banning the rest shows clear differential, unfair treatment.

While the question of daily fantasy sports legality did not come up in court, it touches on the broader issue. Joe Asher, CEO of William Hill US, stated that sports betting and DFS are not mutually exclusive issues for the state, therefore if one is being legalised the other should be made lawful too.

A decision for this case is unlikely to come quickly. However, if NJ is victorious, we can expect to see similar legislation being introduced in many other states. On the other hand, if the leagues are successful, NJ would have to petition the U.S. Supreme Court, which only accepts 1% of such cases and even then cannot guarantee ruling in their favour. The best course of action to come out of this, specially given the nationwide controversy over fantasy sports, might be to reconsider the overall federal laws on sports betting and establish new regulations altogether.

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