On August 25, 2015, the United States Court of Appeals for the Third Circuit, by a 2-1 decision, affirmed a lower court ruling that held New Jersey's sports gambling law violates the federal Professional and Amateur Sports Protection Act ("PASPA"). The law, passed by the New Jersey legislature in 2014 (the "2014 Law"), was crafted after an earlier version of the same law was found to violate PASPA. In its previous ruling, the Third Circuit noted that it did "not see how having no law in place governing sports wagering is the same as authorizing it by law." The 2014 Law attempted to do just that by purportedly removing restrictions on sports gambling in certain places in New Jersey. Despite the legislature's best efforts to pass a sports gambling law that does not violate PASPA, the Third Circuit nevertheless ruled that "the 2014 Law violates PASPA because it authorizes by law sports gambling."
How does the New Jersey Sports Gambling Law Violate PASPA?
New Jersey Sports Gambling Law Violates PASPA
PASPA makes it unlawful for, among other things, "a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact . . ." sports gambling. The Court rejected New Jersey's argument that the 2014 Law does not provide authority for sports gambling because "[a]bsent the 2014 Law, New Jersey's myriad laws prohibiting sports gambling would apply to the casinos and racetracks. Thus, the 2014 Law provides the authorization for conduct that is otherwise clearly and completely legally prohibited." Additionally, the Court found that the statute violates PASPA because "the 2014 Law authorizes sports gambling by selectively dictating where sports gambling may occur, who may place bets in such gambling, and which athletic contests are permissible subjects for such gambling."
Protect Yourself
New Jersey State Senator Ray Lesniak has indicated that New Jersey will request an en banc hearing by the entire Third Circuit on this issue. As we have previously done, we will continue to post updates concerning New Jersey's continued attempts to decriminalize sports gambling.
If you are interested in learning more about this topic, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.
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