Third District Court Judges Vote on New Jersey Sports Betting Case on Wednesday

Chris Christie Seeks to Legalize Sports Betting and Save Atlantic City

Chris Christie has been criticized for millions of dollars wasted in legal bills, but a win could revitalize Atlantic City casinos.

Twelve appellate judges meet on Wednesday to determine the fate of the Profession and Amateur Sports Protection Act of 1992. The State of New Jersey has been fighting for nearly 5 years to strike down the PASPA law, which bars all but four states from having sports betting of any kind.

After years of legal battles and law changes, New Jersey lost a three-judge appellate court decision in August 2015. That loss was in the Third District Court of Appeals in Philadelphia. The Third Court allows those who lose the 3-judge decision to appeal for an “en banc” ruling. In October 2015, a panel of Third Court judges agreed to hear that case. The Wednesday hearing should yield the results of that deliberation.

“En Banc” Court Decision

An “en banc” decision is offered by the full panel of sitting judges. It has been reported variously that the decision will be rendered by the 12 active judges, or an even wider panel of 24 judges — those 12 active judges and 12 semi-retired Third Distict Court of Appeals judges. Most reports this week indicate that the smaller “en banc” panel is expected to vote on the decision.

If so, New Jersey has solid odds of reversing the August 2015 decision. The decision to hear the case required a vote by these same judges back in October. In that case, a vote of 11 of those 12 appellate judges granted New Jersey’s request.

Hope for New Jersey

While the decision to hear the case is not the same as a decision in favor of New Jersey on the PASPA law, it is a sign that at least 6 of those 11 judges saw merit in New Jersey’s case. That is a far cry better than any previous legal ruling in New Jersey’s long fight to legalize sports betting.

In 1992, the NFL and the other major American sports leagues decided to lobby the U.S. Congress to pass a full 50-state ban on sports betting. Four states which had legalized sports gambling in one form or another — Nevada, Montana, Oregan, and Delaware — lobbied to preserve their rights to maintain their gambling industries. Of those four states, only Nevada legalized sportsbooks, while the other three states had legal “sports lotteries” or some other, more limited, sports betting industries.

1992 PASPA Law Passed

After months of political manuevering, the PASPA law was passed by Congress. The four states which had legal gambling already were “grandfathered in” to the law, meaning their prior gaming industries were allowed under the federal PASPA law. Essentially, Nevada was granted a virtual sports betting monopoly. Other states were given one calendar year to pass sports betting laws in their states, or told they would forever lose the right to operate legal sportsbooks.

Because of Atlantic City’s existence, New Jersey’s lawmakers made a push to legalize sports betting in that year, but the legislation could not agree on a law. The chance seemed to have passed. In 1992, Atlantic City casinos still had an East Coast monopoly on land-based gambling, so sports gambling did not seem that pivotal to the state’s fortunes.

Atlantic City’s Long Demise

Over the next 19 years, the landscape of gambling in America changed. Native American tribes gained the right to house casinos on their reservations in a late-80s US Supreme Court decision. By the mid-1990s, the Mohegan Tribe and the Mashantucket Pequot Tribe in Connecticut had built the Mohegan Sun and Foxwoods Casino, respectively.

The big tribal casinos began to draw customers from New York City, which hurt Atlantic City’s business. That was only the beginning. New York State and Pennsylvania each legalized tribal casinos, then allowed casino-style gaming at their horse tracks. Eventually, private casinos were authorized.

The Internet changed how players gambled, too. Where Atlantic City didn’t have competition for a thousand miles in 1992, it now had competitors everywhere. People stayed in-state to gamble. From a peak year of $5.4 billion in 2006, Atlantic City’s gambling revenues shrank to $2.4 billion in 2015. The Global Recession of 2008-09 and the devestation of Hurricane Sandy only made matters worse.

Political Leaders Seek Remedy

As this was happening, New Jersey’s political leaders launched several initiatives to save the Atlantic City casino industry. One of those initiatives was legalized online gambling. The other was an attempt to challenge the PASPA law and legalize sports betting in the state.

After a 2011 statewide vote authorized sports betting in New Jersey, the legislature sought to legalize sportsbooks in 2012. This led to a lawsuit by the NFL, Major League Baseball, NBA, NHL, and NCAA to stop the launch of legal sportsbooks.

Legal Losses Mount for New Jersey

From 2012 to 2014, that lawsuit made its way through the court of U.S. District Judge Michael Shipp in Trenton, the U.S. 3rd Court of Appeals in Philadelphia, and eventually to the U.S. Supreme Court. New Jersey lost each step of the way, culminating in a June 2014 decision by the Supreme Court not to hear its appeal.

New Jersey changed its law so that it did not legalize sports betting, but simply agreed not to prosecute sports betting at licensed gaming facilities like Monmouth Park. That led to a new lawsuit by the sports leagues in October 2014. Once again, that suit was successful in the court of Judge Michael Shipp. New Jersey appealed to the 3rd Circuit Court of Appeals, which led to the loss in August 2015.

The Key Day Has Arrived

Now, the pivotal decision is set for Wednesday, February 17, 2016. If the “en banc” court decides in favor of New Jersey, the PASPA law will be struck down and sports betting will be legal across the United States. If the judges rule in favor of the sports leagues, it might be the end of the road for Chris Christie’s attempts to challenge the PASPA.