Third Circuit, Once Again, Strikes Down New Jersey Sports Gambling

Published On September 10, 2015 | By Zach Lerner | General
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The U.S. Court of Appeals for the Third Circuit dealt another blow to New Jersey’s hopes of legalizing sports gambling in its casinos and racetracks. In a 2-1 decision, the Third Circuit sided with the plaintiffs, a collection of the four major sports leagues (the NFL, NBA, NHL, and MLB) and the NCAA, affirming a district court ruling that New Jersey’s 2014 law partially repealing prohibitions on sports gambling violates federal law.

New Jersey argued that its law complies with the Professional and Amateur Sports Protection Act (“PASPA”), 28 U.S.C. §§ 3701-3704, because it merely repeals existing state bans on sports gambling as opposed to affirmatively authorizing such practices. The Third Circuit disagreed, finding that the New Jersey statute authorizes sports gambling. The court asserted that, although “artfully couched” as a repeal, the law fundamentally authorizes what existing New Jersey sports gambling laws would otherwise prohibit. The court also found that, in its selective approval of where sports gambling can occur and which games can be bet on, the law functions as a state authorization of sports betting.

Despite the holding, the Third Circuit left the door open for future attempts at legalizing sports gambling in New Jersey, stating “had the 2014 Law repealed all prohibitions on sports gambling, we would be hard-pressed … to find an ‘authorizing by law’ in violation of PASPA.” (emphasis added). This is the second time the courts have struck down New Jersey’s efforts to legalize sports gambling, and it is unlikely New Jersey will simply repeal its prohibitions entirely and allow virtually unregulated sports betting.

For more information on the history of New Jersey’s effort to legalize sports gambling, see the related posts below.


About The Author

Zach Lerner’s practice focuses on a variety of legal matters impacting Internet-based companies. He helps companies in a wide range of industries, including education technology, financial technology, and fantasy sports/skill and chance gaming, with issues related to privacy, data diligence, e-commerce, copyright enforcement, advertising, and regulatory compliance. In addition, he has a deep knowledge of the practical considerations for implementing blockchain and smart contract technology.