[toc]New Jersey was soundly defeated in its effort to legalize sports betting in court this week, and it was a blow to efforts everywhere in the US.
The only way sports betting was going to be legalized in the short term — either in New Jersey or elsewhere in the country — was with a victory in the U.S. Third Circuit Court of Appeals.
By a 9-3 margin, the court made it clear that wasn’t going to happen on its watch.
So where does that leave the New Jersey sports betting effort, and efforts elsewhere? Here are a few of the possible paths forward, along with their likelihood. (Odds are for entertainment purposes only.)
A Supreme Court appeal
The options for the current court case pitting New Jersey vs. the NBA, NFL, MLB, NHL, NCAA and Department of Justice are basically down to one.
New Jersey, if it wants to keep fighting, can petition the U.S. Supreme Court.
Given the relative lack of dissent — just two justices — the case is not exactly primed for a SCOTUS review. The court held that the New Jersey law runs afoul of PASPA — the federal ban on most forms of sports betting — in its construction.
And while the constitutional issue of PASPA vs. state’s rights (10th Amendment) have been raised, the Third Circuit certainly wasn’t buying that argument.
Still, government officials have told ESPN that an appeal will be made.
And even if the appeal is granted and heard, does it have a chance of being successful? That scenario faces really long odds.
Odds of a Supreme Court victory for NJ: 250 to 1.
NJ tries another ‘partial repeal’ of its sports betting law
The mostly likely scenario for New Jersey? It goes back to the drawing board, and tries for a third time to do a “partial” repeal of its prohibition on sports betting.
How exactly such a repeal would be crafted is up for debate. But the court at leaves open the door to some sort of partial repeal, beyond the two that NJ has tried so far in its unsuccessful court cases. From the majority opinion:
We need not, however, articulate a line whereby a partial repeal of a sports wagering ban amounts to an authorization under PASPA, if indeed such a line could be drawn.
That’s not exactly a ringing endorsement of a possible lawful partial repeal. But it’s at least a possibility, and a palatable one for the state.
Odds of happening: 5 to 1.
NJ does a full repeal of its sports betting law
Beyond a new partial repeal, there’s a chance for a full repeal of sports betting law in NJ.
What would that entail? Basically, it would create an entirely unregulated environment for sports betting, in which anyone who wanted to could offer wagering legally. The Third Circuit has on several occassions said that a full repeal would be allowed under PASPA.
And this is an idea that has already been floated in the wake of the latest decision. From NorthJersey.com’s John Brennan:
“While I respect the Court’s decision, I respectfully disagree with the majority’s reasoning,” said Dennis Drazin, advisor to Darby Development LLC, operators of Monmouth Park, in a statement. “We will now ask the New Jersey legislature and the Governor for a full repeal of all laws which prohibit sports betting, while simultaneously filing a petition for a writ of certiorari to the United States Supreme Court and asking the U.S. Congress to repeal [the Professional and Amateur Sports Protection Act of 1992] altogether. “
While the theory of a full repeal to force a PASPA challenge is an interesting one, it’s much more difficult in practice. Consider:
- Politicians will have to vote for a bill that would create unregulated gambling. This is a difficult position to support, no matter what the ends.
- Would Congress move to act on PASPA if NJ repeals its laws? That seems likely. How quickly would that happen? Nothing happens fast in Congress. Meanwhile, New Jersey would be left with an unregulated gambling environment for an undetermined amount of time.
- The tracks and casinos should be careful what they wish for. Yes, people would bet on sports at their establishments. But they wouldn’t have to. Sportsbooks could open up anywhere in New Jersey, creating competition for gambling dollars that didn’t exist previously.
All things considered, the “nuclear option” of a full repeal that is being bandied about is a great idea on paper. But it’s also a game of chicken that it’s hard to envision New Jersey playing.
Odds of happening: 100 to 1.
Another state tries an NJ-style PASPA challenge
How would this work? Another state passes a partial repeal, like New Jersey. Another state, however, would eventually reach another federal court, outside of the Third Circuit that struck down NJ’s appeal.
The Third Circuit would act as precedent, but it would not be binding in other circuits.
The state that has been the most aggressive on sports betting issues is Pennsylvania. But, that state is a part of the Third Circuit, so it won’t be going this route.
I would have said this whole scenario wasn’t very likely before today’s report from Gambling Compliance, in which Rep. Gary Pretlow said he would consider introducing sports betting legislation to force a PASPA case.
It’s still a long way to go from saying you plan to introduce a bill to passing it and challenging the professional sports leagues in court. So this avenue is no slam dunk either.
Odds of happening: 10 to 1
Congress repeals PASPA
The most straightforward solution is easy to identify: Taking PASPA off the books.
This, however, isn’t that easy. As stated above, Congress doesn’t move fast on anything, and right now there is no tangible momentum to repealing PASPA with a large number of lawmakers. Bills to do so have been introduced and have seen no action.
The American Gaming Association has said it plans to start lobbying Congress as soon as next year. But the NBA, regulated sports betting’s biggest proponent from the leagues’ side, has said it’s not going to do more than it has. (This, despite the dissonance of the NBA being a plaintiff against NJ in the ongoing case.)
In reality, all the US pro sports leagues probably all have to be on board with a PASPA repeal, if it’s to happen. And that doesn’t appear to be close to happening.
Congress acting on PASPA may happen given a long enough of a horizon, but it’s likely not a viable short-term solution.
Odds of happening (within three years): 100 to 1.