A New Jersey State law that would legalize sports gambling in Atlantic City casinos suffered another major setback this week when the Third Circuit Court of Appeals agreed with the lower court and found the law to be illegal.

Lower Court Decision

As you may remember, earlier this year the United States District Court for the District of New Jersey struck down the New Jersey sports gambling law on the grounds that it was inconsistent with federal law.  Specifically, the proposed 2012 New Jersey State sports gambling law was held to be in direct conflict with the 1992 federal Professional and Amateur Sports Protection Act (PASPA).

Sports Gambling Law Appeal

New Jersey Governor Chris Christie immediately appealed the district court’s decision, claiming that PASPA, which outlawed sports gambling in all states other than Nevada, Oregon, Montana and Delaware, is unconstitutional and an unlawful usurpation of states’ rights.  Governor Christie had also previously expressed his intention to pursue the case to the Supreme Court of the United States, should his appeal to the Third Circuit Court of Appeals fail.  With the Third Circuit Court of Appeals ruling this week, Governor Christie now has his opportunity to do just that.

Despite the fact that Governor Christie claimed that PASPA wrongfully favored the foregoing states, which already had some form of sports gambling prior to PASPA being enacted, and encroached on the authority of state legislatures under the 10th Amendment, the Third Circuit Court of Appeals, affirmed the decision of the lower district court and stated that:

“We are cognizant that certain questions related to this case — whether gambling on sporting events is harmful to the games’ integrity and whether states should be permitted to license and profit from the activity — . . . But we are not asked to judge the wisdom of PASPA or of New Jersey’s law, or of the desirability of the activities they seek to regulate. We speak only to the legality of these measures as a matter of constitutional law. … New Jersey’s sports wagering law conflicts with PASPA and, under our Constitution, must yield.”

It remains to be seen if Governor Christie will appeal the Third Circuit’s decision to the U.S. Supreme Court.  The final disposition of this case should be of interest to all gaming and sports gambling attorneys.