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Media Alerts - National Collegiate Athletic Association, et al. v. Governor of the State of New Jersey, et al. - Third Circuit
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August 28, 2015
  National Collegiate Athletic Association, et al. v. Governor of the State of New Jersey, et al. - Third Circuit
Headline: New Jersey Sports Gambling Not Allowed Under Federal Law

Area of Law: Sports gambling

Issue Presented: Whether New Jersey's law which partially repeals certain prohibitions on sports gambling violates federal law?

Brief Summary: In 2014, New Jersey's legislature passed a law which partially repealed New Jersey's statewide ban on sports gambling. The new law allowed sports betting at casinos and racetracks. Five sports leagues (the "Leagues") sought to enjoin New Jersey from giving effect to its law on the grounds that the partial repeal violated the Professional and Amateur Sports Protection Act ("PASPA"), a federal statute which makes it unlawful for a state to "authorize by law" sports betting. The Third Circuit Court of Appeals held that a partial repeal equated to an authorization in violation of PASPA. New Jersey has multiple laws prohibiting sports gambling that were not repealed by its 2014 law. The selectivity of the law partially repealing New Jersey's prohibitions on sports gambling permitted certain entities to engage in sports gambling while not permitting others to engage in sports gambling, resulting in an authorization by law for those entities permitted to engage in it. In addition, New Jersey did not enact a sports gambling scheme when Congress offered to allow New Jersey to do so within one year of PASPA's enactment.

Extended Summary: This case concerns New Jersey's partial repeal of its prohibitions on sports gambling. In 2014, New Jersey's legislature passed SB 2460 which partially repealed certain prohibitions on sports gambling. The law limited sports wagering to people twenty-one years or older and to casinos and racetracks. The law also prohibited wagering on New Jersey college teams and on any collegiate competition occurring in New Jersey. Five sports leagues (the "Leagues") sought to enjoin New Jersey from giving effect to its law on the grounds that the partial repeal violated a federal statute, the Professional and Amateur Sports Protection Act ("PASPA").

PASPA provides that a governmental entity cannot license or authorize by law sports gambling. In 2011, New Jersey amended its constitution to allow the state legislature to authorize by law sports gambling. In 2012, the New Jersey Legislature enacted the Sports Wagering Act, which established an elaborate licensing system for sports gambling at casinos and racetracks. The Leagues challenged this law as a violation of PASPA in National Collegiate Athletic Ass'n v. Governor of New Jersey (Christie I). The Third Circuit agreed, and the law was overturned. New Jersey had argued that PASPA was unconstitutional under the anti-commandeering doctrine, which prohibits the federal government from requiring state legislatures to keep existing laws in place. But the Court held that PASPA did not require New Jersey to keep its ban on sports gambling in place, but rather prevented it from passing new laws authorizing gambling. Because that is what the new law did -- authorize sports gambling through an elaborate licensing procedure -- the law was prohibited by PASCA. If New Jersey had repealed all of its laws on sports gambling, then the law would have been permissible.
In response to the Christie I decision, New Jersey tried once again in 2014 to allow sports gambling by passing SB 2460. Instead of setting up a system that regulated sports gambling, the new law repealed all state laws and regulations that authorized, licensed or prohibited sports gambling at casinos and racetracks in New Jersey. The Leagues challenged this new law, arguing that it authorized by law sports gambling in contravention of PASPA. New Jersey countered that the law was permissible under the decision in Christie I because it was a repeal of gambling laws, and Christie I specifically said that a repeal of all sports gambling laws would be permissible. If the laws are repealed, Christie I held that the authorization to gamble would come not from the state but from the inherent powers retained by the people.

The Court concluded that the 2014 law violated PASPA and Christie I because it was only a partial repeal of the sports gambling law in the state. Sports gambling outside of casinos and racetracks was still not allowed. And even at casinos and racetracks, the state continued to prohibit gambling on New Jersey collegiate athletics and for people under 21. The court reasoned that this selective repeal meant that the state was, in effect, authorizing gambling, because it was allowing sports gambling in some situations but not in others. Only if the state completely removed itself from gambling decisionmaking would it be in compliance with PASPA's prohibition on state authorization of gambling. But New Jersey had multiple laws prohibiting sports gambling that were not repealed by its 2014 law.
As further support for its decision, the Court noted that Congress had included an exception in PASPA that gave New Jersey the opportunity to create its own sports gambling scheme so long as it did so within one year of PASPA's enactment. New Jersey did not choose to do so. By offering to include a sports gambling scheme for New Jersey as an exception to PASPA, the Congress clearly believed that a sports gambling scheme in New Jersey would otherwise violate PASPA.
Judge Fuentes filed an opinion dissenting from the majority opinion.
To see the full opinion, please visit http://www2.ca3.uscourts.gov/opinarch/144546p.pdf

Panel (if known): Rendell, Fuentes and Barry, Circuit Judges

Date of Argument: March 17, 2015

Date of Issued Opinion: August 25, 2015

Docket Numbers: Nos. 14-4546, 14-4568, and 14-4569

Decided: District Court's grant of summary judgment and permanent injunction is affirmed.

Case Alert Author: Sarah Adams

Counsel: John J. Hoffman, Esq., Jeffery S. Jacobson, Esq., Geoffrey S. Brounell, Esq., Stuart M. Feinblatt, Esq., Ashlea D. Newman, Esq., Peter M. Slocum, Esq., Matthew Hoffman, Esq., Ashley E. Johnson, Esq., Theodore B. Olson, Esq., Matthew D. McGill, Esq., counsel for Appellants Governor of the State of New Jersey, David L. Rebuck and Frank Zanzuccki in 14-4546; Elliott M. Berman, Esq., Ronald J. Riccio, Esq., Edward A. Hartnett, Esq., counsel for Appellant New Jersey Thoroughbred Horseman's Association, Inc. in 14-4569; Michael R. Griffinger, Esq., Thomas R. Valen, Esq., Jennifer A. Hradil, Esq., counsel for Appellants Stephen M. Sweeney and Vincent Prieto in 14-4568; Paul D. Clement, Esq., Erin E. Murphy, Esq., William R. Levi, Esq., Taylor Meehan, Esq., Jeffery A. Mishkin, Esq., Anthony J. Dreyer, Esq., William J. O'Shaughnessy, Esq., Richard Hernandez, Esq., counsel for Appellees National Collegiate Athletic Association, National Basketball Association, National Football League, National Hockey League and Office of the Commissioner of Baseball; Joyce R. Branda, Esq., Paul J. Fishman, Esq., Scott R. McIntosh, Esq., Peter J. Phipps, Esq., counsel for Amicus United States of America.

Author of Opinion: Judge Rendell

Circuit: Third Circuit

Case Alert Supervisor: Prof. Mark Anderson

    Posted By: Susan DeJarnatt @ 08/28/2015 08:35 AM     3rd Circuit  

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