New Jersey’s attempt to legalize sports betting has failed at every level of the U.S. federal court system.
But experts who have followed the ins and outs of the nearly seven-year-old case said the previous results don’t necessarily mean the state is doomed when the nine justices of the U.S. Supreme Court take up the matter sometime before the current term ends.
“None of us really believe the court would have taken the case just to tell the Third Circuit ‘good job,’” Florida-based attorney Daniel Wallach said of the most recent loss New Jersey suffered. Wallach, an expert on gaming law and sports law, has closely monitored New Jersey’s efforts.
“The court will make a ruling. I think that’s pretty clear,” Wallach added.
New Jersey is challenging the 25-year-old Professional and Amateur Sports Protection Act (PASPA), which limits legal sports wagering to four states. Nevada is the only state with full-scale sports books and a sports gambling industry that took in a record $4.5 billion in legal wagers in 2016.
What might happen after the Supreme Court rules inspires a variety of opinions. Most observers believe the justices will loosen PASPA in some manner, but not completely throw out the law.
“I do not believe the Supreme Court will give an all-or-nothing decision,” said sports betting journalist David Purdum, who has closely covered the New Jersey case for ESPN.com. “I would be equally surprised if they completely struck down PASPA and allowed any state to legalize sports betting as I would be if PASPA was kept fully intact. I expect a nuanced decision that everyone will have to be ready to review and react.”
Interest in New Jersey’s case has increased. The American Gaming Association filed a brief in support of New Jersey’s efforts. More than 20 states have thrown their support behind New Jersey. Several of those states have also begun the process of drafting legislation to allow sports betting, should PASPA end.
The National Indian Gaming Association has also tossed its weight behind New Jersey’s efforts.
“A lot of states have been willing to let New Jersey carry their water,” Wallach said.
Next week’s Global Gaming Expo will host several educational break-out sessions covering the potential legalization of sports betting, including the ramifications of New Jersey’s efforts. Discussions about the case will likely be a hot topic at the Sands Expo in Las Vegas.
“From our viewpoint, the hope is the court will carve out some middle ground that allows us to move forward,” said AGA President and CEO Geoff Freeman. “We’re hoping there will be a reasonable work-around that will give all the parties some clarity.”
Freeman said a favorable ruling for New Jersey, even if PASPA remains, could allow the state’s Monmouth Park Racetrack at the Meadowlands to offer sports betting.
No matter what happens, however, all sides believe Congress will make a final decision regarding PASPA.
“Any ruling is going to spur some type of Congressional action,” Freeman said.
The major professional sports leagues and the NCAA have challenged New Jersey’s efforts, but several of the leagues have softened opposition to legal sports betting since the case began in 2011.
NBA Commissioner Adam Silver voiced support of legal sports betting in a 2014 New York Times op-ed piece. The NFL voted 31-1 in March of this year to allow the Oakland Raiders to move to Las Vegas. The opening of the NHL season in October will feature the expansion Vegas Golden Knights. The walls are slowly crumbling.
According to research from GamblingCompliance.com, the Supreme Court has twice mentioned PASPA – in a gambling advertising case in 1999 and a 2013 voting rights case. In both cases, the justices were not favorable toward PASPA.
Purdum believes the sports leagues would “almost immediately” begin lobbying for a federal regulatory framework governing sports betting if PASPA is tossed.
“The leagues would attempt to gain ownership over the data that comes out of the games,” Purdum said.
The journalist also said New Jersey has another hand to play should PASPA remain – lawmakers could repeal all the state’s laws addressing sports betting if the Supreme Court rules that is the only option.
The AGA says legal sports betting would all but end a $150 billion illegal gambling market. The new industry would support up to 152,000 jobs, create $26 billion in economic output, and generate to $5.3 billion in tax revenue nationwide, according to research from Oxford Economics.
Wallach is hopeful the Supreme Court will end any ambiguity concerning PASPA.
“We haven’t gotten clarity in any of these court decision,” Wallach said. “We hope the court will deal with the question of PASPA in a clear and cohesive way.”
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