All Bets Are Off: Future of Sports Gambling in New Jersey in Doubt

By pgandhi [Thursday, May 8th, 2014]


The Professional and Amateur Sports Protection Act defines the status of sports betting throughout the United States. The federal law allows the states of Nevada, Oregon, Montana and Delaware to have various forms of sports gambling, while keeping sports gambling out of other states. These four above states all had some form of sports gambling at the time PASPA was passed and were allowed to continue the sports betting programs. However, the 3rd U.S. Circuit Court of Appeals in Philadelphia has ruled that New Jersey’s sports betting law conflicts with federal law and will not allow the state of New Jersey to proceed with sports gambling.

In the above case, the court halted New Jersey’s efforts to legalize sports gambling, upholding a ruling that New Jersey’s betting laws conflict with the PASPA and therefore cannot be implemented. The majority in this case held that as a matter of constitutional law, New Jersey’s betting laws must yield to the PASPA.  The Supremacy Clause of the U.S. Constitution states that federal laws shall prevail over state laws and that is the reason for the majority’s holding in this case.  Conversely, the dissent in this case stated that PASPA attempts to implement federal policy by telling the states they may not regulate an unregulated activity and Congress does not have that power.

The NFL, NBA, NHL, MLB, and NCAA all sued the state of New Jersey last year, claiming that the New Jersey betting law harmed the integrity of the game. The difference between New Jersey and the aforementioned states with sports betting laws is that unlike New Jersey, the other states had already implemented state betting laws prior to PASPA being passed.

Does the Federal Government have a specific interest in protecting the integrity of the game? Does the PASPA violate the authority of state legislatures under the 10th Amendment?

The 10th Amendment of the U.S. Constitution protects state sovereignty. State sovereignty is protected by granting states power that was not prohibited by the Constitution. The Supreme Court has declared laws in the modern era unconstitutional that compel states to enforce federal statutes. However, the Federal Government can regulate state activity under The Commerce Clause. The Commerce Clause authorizes Congress to regulate commerce in order to ensure that the flow of interstate commerce is free from local restraints imposed by various states. A state has the right under the 10th Amendment to regulate its domestic commerce. However, that right must be exercised in a manner that does not interfere with, or place a burden on, interstate commerce, or else Congress may regulate that area of domestic commerce in order to protect interstate commerce from the unreasonable burden.

New Jersey has the largest gaming capital on the east coast within its state border known as Atlantic City. Atlantic City is one of the most popular tourist destinations in the United States with over 30 million visitors a year and $1.7 billion dollars in investments in casino resorts. It is likely these casino resorts would produce even greater revenue to the state of New Jersey with the addition of sports betting in the casino resorts.

It would appear that the major sports leagues do not want the state of New Jersey to profit from their respective activities and the leagues claim integrity of the game would be harmed. Sports betting is a legal activity in states like Nevada and Congress has not acted under the Commerce Clause to invalidate Nevada state law. This can be considered as evidence that the Federal Government viewed sports betting as an activity that can be regulated by state legislature. Should the state of New Jersey be treated differently solely because it did not have state laws allowing sports betting prior to the enactment of PASPA?

Gov. Chris Christie has already appealed to the U.S. Supreme Court on behalf of New Jersey. However, the odds are not in Gov. Christie’s favor due to the fact only 100 arguments are agreed to be heard out of 10,000 petitions. Nevertheless, the Court of would have to decide where the line between Federal and State Governments is drawn, which has historically been a keen issue. By resolving this constitutional law issue, the Court can determine if all sports bets are off in the state of New Jersey.

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