Federal court rejects N.J. sports betting

Sports betting in Vegas. (File photo)
Sports betting in Vegas. (File photo)
Posted: September 19, 2013

A federal appeals court in Philadelphia on Tuesday rebuffed New Jersey's bid to boost the sagging fortunes of Atlantic City casinos by bringing sports gambling to the state.

A panel of judges for the U.S. Court of Appeals for the Third Circuit upheld a lower-court ruling that a 1992 federal law barring sports betting in all but four states, including Nevada, is constitutional.

New Jersey officials vowed not to give up.

"We will continue to fight this injustice by either appealing to the U.S. Supreme Court or to the entire Court of Appeals," State Sen. Raymond Lesniak (D., Union), a leading proponent in the legislature for sports betting, said in a statement.

Gov. Christie's office said he would pursue an appeal of the 2-1 decision.

"Gov. Christie has said all along this issue will likely be decided by the U.S. Supreme Court, and that's what he believes should happen next," said Colin Reed, his deputy communications director.

"There's no reason [sports betting] should be limited to only a handful of states. It's a fundamental issue of fairness, and Gov. Christie will not give up this fight," Reed said.

Christie signed New Jersey's sports-betting law in January 2012, after a question on the issue passed in a referendum in November 2011. The state wrote regulations, but a federal judge in Trenton blocked the state from implementing them in February by ruling in favor of the NCAA and four major sports leagues.

The NCAA has said that the spread of legalized betting would undermine the integrity of athletic competition.

The case has national implications.

"This was being watched throughout the casino industry nationwide and by political leaders in many other states" where expanded gambling is under consideration, said Joseph S. Weinert, an executive vice president at Spectrum Gaming Group, a consulting firm in Linwood, N.J. "Sports betting would have been a potential avenue for them."

The key for Atlantic City would not be the sports betting itself, which is only marginally profitable.

"The real significance of this is to get people in the door so that they are staying there, eating there, so they are shopping there and going to shows there," said Lloyd D. Levenson, chief executive of Cooper Levenson, an Atlantic City law firm and chairman of its casino law group.

For years, Atlantic City has been losing gamblers to Pennsylvania, New York, and Maryland, as those states legalized or expanded gambling. Through August, Atlantic City casinos won $1.77 billion from gamblers, down 9 percent from the same period last year.

There's no guarantee that the U.S. Supreme Court will accept an appeal, but a lawyer said the case might make the cut.

"In a case of this magnitude, when you have a judge who disagrees with the panel's decision, it certainly may make the Supreme Court more interested in the case," said Christopher L. Soriano, an associate in the Cherry Hill office of Duane Morris L.L.P.

Another possible path to the legalization of sports gambling in New Jersey runs through Congress.

U.S. Reps. Frank LoBiondo (R., N.J.) and Frank Pallone Jr. (D., N.J.) are pushing two bills that would amend the Professional and Amateur Sports Protection Act. One bill would add New Jersey to the list of states allowed to have sports wagering, while the other would open a four-year window during which any state could enact sports-betting legislation.

Key Dates

November 2011: New Jersey voters support sports betting in a referendum.

January 2012: Gov. Christie signs a bill legalizing sports bettting at casinos and racetracks.

August 2012: The NCAA and four major sports leagues sue in federal court to block sports betting in New Jersey.

February 2013: A U.S. District Court judge in Trenton upholds a 1992 federal law barring sports gambling in all but four states.

April 2013: New Jersey appeals to the U.S. Court of Appeals for the Third Circuit in Philadelphia.

Tuesday: The Court of Appeals upholds the lower-court ruling.

Contact Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.

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