The U.S. Supreme Court on Monday dashed New Jersey's hopes to institute sports betting at Atlantic City casinos and the state's racetracks by upholding a federal ban that limits the activity to four states and denying the state's appeal of a lower court ruling.
Last year, a three-judge panel of the U.S. Court of Appeals for the Third Circuit in Philadelphia upheld a trial judge's ruling that sided with the four professional sports leagues - Major League Baseball, the NFL, the NHL, and the NBA, as well as the NCAA - and shot down New Jersey's attempt to overturn the Professional and Amateur Sports Protection Act (PASPA), the federal law that limits sports betting to Nevada, Oregon, Delaware, and Montana.
The sports leagues and the NCAA, which had quashed Delaware's attempt to get sports wagering in 2009 (the state offers only parlay betting), moved vigorously to do the same with New Jersey. They argued that betting on sports would destroy the integrity of the games and put student-athletes at risk.
Lawyers for New Jersey argued that PASPA violated constitutional principles by commandeering the states' regulatory authority and was unlawfully discriminatory because it carved out an exception for four states.
The appeals court said then that it was not judging the wisdom or desirability of allowing sports gambling, but that "New Jersey's sports wagering law conflicts with PASPA and, under our Constitution, must yield." The panel split, 2-1, in the September 2013 decision that affirmed a U.S. district judge's earlier ruling. The Supreme Court let the lower courts' ruling stand and issued no further remarks Monday.
The four pro sports leagues declined to comment, but the NCAA embraced the decision.
"We are pleased the Supreme Court has denied New Jersey's final attempt for review," Donald Remy, chief legal officer for the NCAA, wrote in an e-mail. "The NCAA maintains that the spread of legalized sports wagering is a threat to student-athlete well-being and the integrity of athletic competition.
"We continue to believe that PASPA is incredibly important, valid, constitutional legislation that has appropriately halted the spread of legalized sports wagering in New Jersey and across the country," he wrote. "It is our hope that PASPA continues to protect the integrity of sport in America."
Gov. Christie accepted Monday's decision.
"Nothing more I can say," Christie said while participating in a charity softball event at Yankee Stadium. "They said no, so we have to move on."
The case has implications beyond New Jersey. Other states - including Pennsylvania - that now have casinos were watching closely, since a New Jersey defeat could stifle their own chances.
State Sen. Raymond Lesniak (D., Union), the Legislature's leading sports betting proponent, insisted the fight was not over. He introduced a measure Monday to repeal the state's laws adopted before 1992's federal PASPA law went into effect that prohibit sports betting.
He said PASPA does not obligate New Jersey to leave such state laws in place and could repeal them in whole or in part. He likened the approach to the legalization of marijuana in some states. It was unclear from legal experts how far Lesniak's measure could go.
"I expect that the U.S. Justice Department will refrain from intervening, as they have with Colorado and Washington when those states legalized marijuana," said Lesniak.
Monday's decision was a blow to New Jersey, especially struggling Atlantic City. The resort had banked on the region's legion of sports fans to place bets and fill rooms and restaurants during huge events, such as the Super Bowl and the NCAA men's basketball tournament, especially in the slow winter months.
Las Vegas has had sports books - theater-like set-ups lined with TV monitors - in its casinos since the mid-1970's. With the opening of casinos in nearby states, including New York and Pennsylvania, Atlantic City's effort to find other sources of revenue has intensified.
Lesniak and others estimated that sports betting could generate $225 million in annual revenue for casinos and the state's tracks in Mays Landing, Freehold, Monmouth, and the Meadowlands, and employ about 4,000.
"The economic impact that sports wagering can have on New Jersey is far too important to simply shrug our shoulders and move on," said Senate President Stephen Sweeney (D., Gloucester). "We will be working with our legal team . . . to determine the best course of action moving forward."
Barbara DeMarco, a lobbyist for the tracks, called the court's action "extremely disappointing."
"There is a real synergy between betting on horses and sports betting," she said. "Diversifying wagers is good for business."
In 2011, New Jersey residents overwhelmingly voted to amend the state constitution to allow sports wagering. The Legislature enacted a measure to permit such betting, and Christie signed it in mid-January 2012.
The NCAA and professional sports leagues filed a federal lawsuit in Trenton on Aug. 7, 2012, to challenge the new law, and the federal courts ruled in their favor, citing PASPA. New Jersey appealed.
After Congress passed PASPA, other states were given 18 months to enact sports-betting legislation and have it grandfathered. New Jersey missed its chance when a bill never made it out of committee in 1993. Republicans feared having sports betting on the ballot during the governor's race that year would increase turnout among Democrats.
"We're very disappointed," said Gino Garofalo, co-owner with his brother of the Atlantic City Bar & Grill at 1219 Pacific Ave. It features photos of former and current Eagles and Phillies, among others.
"With other states getting gambling, it's sucking the life out of the town, because now those people that would have driven 90 miles or 90 minutes to come here no longer do that," Garofalo said Monday. "At least we would have a chance with sports betting. They would make that drive."
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