Judge deals setback to N.J.’s sports gambling effort

NEWARK, N.J. — Gov. Chris Christie indicated Friday he would appeal a judge’s decision upholding a ban on sports gambling in New Jersey, a ruling that dealt a setback to the state’s efforts to save its struggling casino industry by tapping into a multibillion-dollar market.

In a ruling published late Thursday night, U.S. District Judge Michael Shipp sided with the four major pro sports leagues and the NCAA in rejecting the state’s constitutional challenge to the 1992 Professional and Amateur Sports Protection Act, a law that prohibits legal sports gambling in all but Nevada and three other states.

In December, Shipp denied New Jersey’s claim that the leagues and NCAA didn’t have standing to sue the state because they couldn’t demonstrate tangible harm to their products if New Jersey were to allow sports betting.

“We believe firmly in the principles of our position on sports betting and that the federal ban is inequitable, violates New Jersey’s rights as a state and is unconstitutional,” Christie said through a spokesman Friday. “Even the trial judge has noted that he was not likely the final arbiter in the matter. We are confident that the federal court of appeals will conclude that New Jersey should be treated equally with other states.”

New Jersey’s casino industry has seen revenues decline steadily over the last several years in the face of competition from neighboring states. Atlantic City’s newest casino, Revel, announced last week that it will file for Chapter 11 bankruptcy protection this month, about a year after it opened. Earlier in February, the Trump Plaza casino was sold for
$20 million, the lowest price ever paid for an Atlantic City casino.

The industry could get a lift from legislation signed by Christie this week that made New Jersey the third state in the nation to allow gambling over the Internet.

Billions of dollars are bet legally each year on sports in Nevada, and experts estimate tens or even hundreds of billions are wagered illegally through bookmakers. In oral arguments before Shipp last month, former U.S. Solicitor General Theodore Olson, arguing for New Jersey, decried the loss of sports gambling revenue to Nevada’s “permanent monopoly.”

State Sen. Ray Lesniak, the prime sponsor of the sports betting bill, called Shipp’s ruling a “patent misinterpretation of the Constitution” and said sports betting would provide immediate and long-term economic benefits.

New Jersey voters passed a sports betting referendum in 2011, and last year the Legislature enacted a law that limited bets to the Atlantic City casinos and the state’s horse racing tracks. Bets wouldn’t be taken on games involving New Jersey colleges or college games played in the state .

The NFL, NBA, NHL, Major League Baseball and the NCAA sued the state last year, and the NCAA has moved several of its championship events out of New Jersey because of the sports betting law. In a court deposition, MLB commissioner Bud Selig said he was “appalled” by Christie’s actions.

In a statement Friday, the NCAA said “the spread of legalized sports wagering is a threat to the integrity of athletic competition and student-athlete well-being. We hope the decision in this case is a step in the direction of preventing that from happening.”

NFL spokesman Brian McCarthy said the ruling “speaks for itself.”

New Jersey had attacked the 1992 law on several constitutional levels. It argued the law unfairly “grandfathered” Nevada, Oregon, Montana and Delaware, which already had some form of sports gambling, and said the law violated state sovereignty and equal protection provisions and trampled the authority of state legislatures under the 10th Amendment.

In arguments last month, U.S. Attorney Paul Fishman, representing the Justice Department, said the Constitution empowers Congress to regulate an interstate industry such as sports gambling and to treat states differently.

Attorneys for the leagues have said that the sports protection act doesn’t supersede the authority of state legislatures because it doesn’t require any affirmative actions such as enacting new laws.

In his ruling, Shipp said that although some of the questions raised in the case were novel, “judicial intervention is generally unwarranted no matter how unwise a court considers a policy decision of the legislative branch. As such, to the extent the people of New Jersey disagree with PASPA, their remedy is not through passage of a state law or through the judiciary, but through the repeal or amendment of PASPA in Congress.”

New Jersey Reps. Frank Pallone, a Democrat, and Republican Frank LoBiondo have sponsored bills that would give New Jersey and other states the option to approve legal sports betting. Congress gave New Jersey a chance to approve sports gambling at its casinos in the early ’90s, but the state didn’t do so.

Pallone said Friday he was “surprised and frustrated” by the ruling.

“The prohibition in New Jersey while allowing it in other states is unconstitutional, and ultimately I thought the court would throw that prohibition out,” he said. “But the fight is by no means over.”

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