The gripes vs the reality

(Bloomberg) — New Jersey is free to repeal its ban on sports betting; it just can’t authorize such gambling.

Confused? Don’t be, says the Garden State in response to a National Football League bid to block wagering this weekend.

The state said it can lift a prohibition on betting — allowing sports wagering to take place — without running afoul of a federal statute that restricts widespread gambling on games in all but four states.

New Jersey said this is possible in part because of a Philadelphia federal appeals court’s interpretation of the 1992 Professional and Amateur Sports Protection Act, or PASPA.

The appeals court “recognized that a federal law prohibiting states from altering their state-law restrictions on sports wagering would ‘raise a series of constitutional problems,’ so it construed PASPA’s statutory language to avoid those problems,” lawyers for New Jersey said in papers filed yesterday in federal court in Trenton, the state capital.

Governor Chris Christie signed a law Oct. 17 that would let racetracks and casinos in struggling Atlantic City offer sports betting. Monmouth Park Racetrack said that day it would take such bets as soon as Oct. 26. The NFL and three other professional sports leagues sued on Oct. 20, saying wagering would expose them to significant and irreparable harm.

Failed Attempts

Christie, a Republican, signed the law despite earlier failed attempts to circumvent PASPA, which bans sports betting in all but four states: Nevada, Delaware, Montana and Oregon.

Last year, the U.S. Court of Appeals in Philadelphia ruled 2-1 that a New Jersey law legalizing gambling was pre-empted by federal law. The court, however, narrowly interpreted PASPA to permit states to repeal their existing bans on sports wagering and determine for themselves “what, if any, ‘the exact contours of the prohibition will be’,” New Jersey said in its filing.

The court held “that there is no ‘equivalence’ between ‘repeal and authorization’ and that a repeal of prohibitions on sports wagering would not ‘authorize by law’ that activity,” according to the filing.

The bottom line: New Jersey’s new legislation effects a partial repeal of pre-existing prohibitions. That repeal is “entirely self-executing,” which means the state needs to do nothing else to permit wagering to occur legally, according to the filing.

The case is National Collegiate Athletic Association v. Christie, 14-cv-06450, U.S. District Court, District of New Jersey (Trenton).

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