Federal Court in New Jersey Finds PASPA Constitutional and Halts New Jersey’s Sports Betting Law

Published On March 1, 2013 | By Jake Sommer | General, Litigation
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Yesterday, February 28, the District of New Jersey, NCAA v. Christie, No. 12-cv-4947 (D.N.J. Feb. 28, 2013), upheld the Professional and Amateur Sporting Protection Act of 1992, 28 U.S.C. 3701, et seq. (“PASPA”) as constitutional in a response to a challenge by the State of New Jersey claiming PASPA improperly infringed upon New Jersey’s sovereign rights.  The court held that the federal law, which prohibits states from legalizing sports betting, had a rational basis, did not infringe on New Jersey’s sovereign rights, and was a rational expression of Congress’s commerce power because of the interstate nature of sports betting.

PASPA made it unlawful for states to authorize sports wagering, but grandfathered in Delaware, Oregon, Montana, and Nevada and allowed New Jersey one year in which to pass a law authorizing sports betting.  New Jersey did not do so until 2012.  The NCAA and other sports leagues sued New Jersey state officials immediately seeking an injunction preventing New Jersey from enacting a law that authorized gambling on sports, which the leagues argued was prohibited by PAPSA.

In response, New Jersey argued that PASPA violated the Commerce Clause, the Tenth Amendment, the Due Process Clause and Equal Protection Principles, and the Equal Footing Doctrine.  The Court rejected each argument, finding PASPA is a rational expression of power under the Commerce Clause, and it does not violate the Tenth Amendment because it does not require New Jersey to take any legislative, executive or regulatory action.  The Court found that Congress had a rational basis to enact PASPA in the manner it chose, and that grandfathering certain states was a rational decision based on the disruption that would have been caused by retroactive application of PASPA – it does not grant Nevada an unfair or unreasonable monopoly.

The tenor of the opinion is respectful to a law that has stood for 20 years and the presumption that acts passed by Congress are constitutional.  The Court’s opinion states that to the extent New Jersey disagrees with PASPA, its recourse is not through the judiciary, but through advocating a repeal of PASPA by Congress.  New Jersey probably will appeal to the Third Circuit, hoping an appellate court will be more willing to strike the law down than a district court judge.

About The Author

Jacob Sommer's practice focuses on legal issues related to Internet-based services and social networking, with a focus on protecting client's rights in litigation or government investigations involving the Copyright Act, Lanham Act, Digital Millennium Copyright Act ("DMCA"), Electronic Communications Privacy Act (“ECPA”), the Wiretap and Communication Acts, CAN-SPAM, FISA and federal and state laws governing Internet gambling. He also helps social networks, search engines, e-mail providers, ISPs and other clients fulfill their compliance obligations pertaining to the discovery and disclosure of customer and subscriber information.

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