New Jersey Sports Betting Case: Examining The History And Potential Future

On May 14, 2018, the United States Supreme Court reversed a federal ban on state-authorized sports betting, opening the door for states to offer legal, regulated sports wagering to residents in their state. With that decision, several states are expected to be operating by the end of 2018, with more than a dozen likely to following by the end of 2019.

A debt of gratitude is owed to the Garden State. New Jersey – albeit with vested interests firmly at the forefront – exhibited impressive persistence in its mission to legalize the activity within its borders. The now near-decade-long quest for legal sports betting has crossed the finish line.

Earliest legalization effort dates back years

The origins of Murphy vs. NCAA (formerly Christie vs. NCAA) go back to almost the beginning of the decade. New Jersey residents first approved a sports-betting referendum back in November 2011 and did so by a wide margin. That led to the Sports Wagering Act of 2012, which was signed into law by Governor Chris Christie and authorized “wagering at casinos and racetracks on certain professional and collegiate sports or athletic events.”

Enter the quartet of the NFL, MLB, NHL and NCAA, which filed suit to block the legislation from going into effect. The leagues put forth the position that the Sports Wagering Act was in direct violation of PASPA (Professional and Amateur Sports Protection Act) of 1992. After successfully obtaining an injunction, they also prevailed on New Jersey’s subsequent appeal.

However, there was one silver lining that emerged from the latter hearing. The appellate court affirmed that New Jersey was free to repeal its own ban on sports betting at any time. The state would leverage this opinion to launch their next offensive.

If at first you don’t succeed…

On Oct. 17, 2014, Christie put pen to paper for a second time on NJ sports betting legislation. In this instance, his signature officially authorized casinos and racetracks to offer sports wagering outside of the official regulatory/licensing purview of the state. A somewhat unusual move to be sure. However, it was one that lawmakers believed could get them around the PASPA hurdle, given the Appeals Court’s aforementioned conclusion.

The leagues would prove to be an effective foil once more, however. With Monmouth Park Racetrack reportedly days away from initiating sports wagering based on the newly enacted law, an NFL-spearheaded petition for injunction was granted by the U.S. District Court. It was subsequently upheld by the U.S. Third District Court of Appeals in a 2-1 decision in August 2015.

The state countered by requesting an en banc hearing in front of all the justices on the circuit. The move was essentially deemed a Hail Mary attempt. Even so, New Jersey appeared to come down with the ball in the end zone, so to speak, when the request was granted in October of that year.

Yet again, the wave of optimism was short-lived. The February 2016 proceedings simply resulted in a reaffirmation of the decision by the Appeals court, and in seemingly resounding and potentially crippling fashion at that – the plaintiffs scored a 9-3 victory in terms of the judges’ opinions.

NJ scales tall buildings once more

The latest defeat left the state precariously short of remaining options. One option was another attempted tweak of legislative wording in hopes that it would be enough to pass muster in what would almost assuredly be another legal challenge on the part of the leagues.

The alternative represented yet another legal longshot – appealing the case to the highest court in the land. The consensus among experts was that this strategy was even more unlikely to succeed than attempting to gain an audience in front of the full roster of circuit justices.

To begin with, there was an absence of disagreement between the District and Appeals Courts on the matter – both had ruled in the leagues’ favor. Moreover, the margin of victory for the plaintiffs in the en banc hearing was such that it further dampened the prospects of the U.S. Supreme Court finding the matter worthy of its attention.

Prior history wasn’t on the Garden State’s side, either. They’d been unsuccessful in their February 2014 appeal to have the SC hear their arguments.

A subsequent 30-page brief from acting U.S. Solicitor General Jeffrey Wall — one that had been requested by the Court — arguing against the case going any further could have easily been the death blow.

Nevertheless, New Jersey ultimately beat seemingly bleak odds once again when it was surprisingly granted a Supreme Court hearing in June 2017. A total of 20 states, led by West Virginia, subsequently filed amicus briefs with the court in favor of the state’s position in September. The American Gaming Association mirrored that effort with its own brief that same month.