The U.S. Third Circuit Court of Appeals has granted an en banc rehearing in the New Jersey sports betting case, breathing new life into the possibility of legalized and regulated wagering on games in the state. [toc]
The sports betting rehearing will take place
Sports and gaming attorney Daniel Wallach broke the news on Twitter.
You an read the court’s order for the rehearing here:
A majority of the active judges having voted for rehearing en banc in the above captioned cases, it is ordered that the petitions for rehearing are GRANTED. The Clerk of this Court shall list the case for rehearing en banc at the convenience of the Court. The opinion and judgment entered August 25, 2015 are hereby vacated.
All active justices in the Third Circuit will now hear the case, as part of the en banc rehearing.
Granting of an en banc hearing is obviously a positive development for the state in its quest to allow sports betting. A majority of active judges had to grant the request, so is safe to infer that a number of them have questions about the case.
En banc hearings are generally very rare:
This is the third rehearing grant by the Third Circuit in the last six weeks. Last year only one was granted.
— Daniel Wallach (@WALLACHLEGAL) October 14, 2015
The backstory of the New Jersey sports betting case
The decision comes after New Jersey lost its appeal in the court to offer sports betting in August, in a 2-1 decision. New Jersey had requested an “en banc” rehearing, in which all the active justices would have been called upon to consider the case.
That request was not initially dismissed, as the court asked for the plaintiffs in the case — the major professional sports leagues in the U.S. along with the Department of Justice and the NCAA — to respond to New Jersey’s petition. In their response, the NFL and the other leagues noted it believed there was no conflict to address in the wake of a dissenting opinion on the original appeal.
In 2014, New Jersey had passed a law that would allow sports betting to take place at its brick-and-mortar gaming establishments. The leagues then banded together to challenge the law in court and prevent it from going into effect.
Reaction to the rehearing decision
Congressmen Frank Pallone and Frank LoBiondo made a joint statement on Wednesday:
“We are glad that the ruling – which robbed New Jersey of the opportunity to benefit from the billion-dollar sports betting industry – will be reconsidered and heard by the full court. Not only do the citizens of New Jersey overwhelmingly support legalized sports betting and the revenue that would come to the state with it, but existing federal law picks winners and losers, and is unconstitutional and arbitrary. Several states can already operate sports betting, but New Jersey has been shut out despite the will of our citizens. We remain committed to seeing sports betting become legal in New Jersey, and this reconsideration is a positive and important development.”
State Sen. Raymond Lesniak offered the following to ESPN:
“It’s huge,” Lesniak said. “Chances are, they wouldn’t have vacated the ruling if they were only going to later on confirm it.”
What’s next for the rehearing?
The news of the rehearing brings up lots of questions, some of which we won’t have answers to immediately.
When will the rehearing take place?
There is no schedule, yet, for oral arguments in the rehearing, although it is likely not imminent.
Wallach guessed the hearing would take place in December or January. How long it would take the justices to return a verdict is also an open question.
What is New Jersey’s argument in the rehearing?
New Jersey appears to have been granted the rehearing based on the justices disagreeing on the point of law.
Before passing a law authorizing sports in the state — which is the case currently in front of the Third Circuit — New Jersey originally argued that the Professional and Amateur Sports Protection Act (PASPA) was unconstitutional and lost. PASPA is the federal law that prevents sports betting throughout most of the U.S. — Nevada, Oregon, Delaware and Montana are the only exceptions to that law.
Judge Julio Fuentes, who sided with the majority in the original sports betting case that New Jersey lost, wrote a dissenting opinion in the 2-1 defeat of the current case. The conflict between the two rulings is likely at the core of what the court wants to address.
What are the odds of New Jersey prevailing?
Clearly New Jersey has better than absolutely no chance, but taking the pulse of the entire court will be difficult to do until arguments are heard.
The two judges who sided with the leagues — Marjorie Rendell and Maryanne Trump Barry — were not able to vote on whether the en banc hearing would take place. However, they have chosen to sit on the en banc panel, according to the order for the rehearing. One would assume those votes would go against New Jersey.
It appears that 12 judges will hear the case.
If New Jersey wins, can you immediately start placing bets?
State Sen. Raymond Lesniak, the sponsor of the original bill that became law, predicted New Jersey residents would be able to be able to wager by February of 2016. The assumption that New Jersey will prevail in the rehearing appears to be a bit premature.
But theoretically, yes, a victory in the case for New Jersey could mean sports bets could be taken immediately, although that’s not a given (see the next entry).
Sports bets, under the law, could be taken at Atlantic City casinos and racetracks in the state.
When a verdict is reached, is that the end of the case?
No matter what the outcome of the rehearing is, there is still the possibility of a Supreme Court appeal by either site. Given the dispute in the Third Circuit over this case, that would appear to have a non-zero chance of happening.
Should New Jersey’s opponents lose, they may also ask the Supreme Court to stay the Third Circuit’s ruling, which would stop sports betting from happening until the SC could consider the matter further.