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Federal appeals court rejects New Jersey sports gambling law

The US Court of Appeals for the Third Circuit [official website] on Tuesday ruled [opinion, PDF] that New Jersey's sports wagering law conflicts with the Professional and Amateur Sports Protection Act of 1992 (PASPA) [text] and thus, should not be implemented. PASPA makes sports betting illegal nationwide except in Nevada, Oregon, Delaware and Montana. In the 2-1 holding, the Third Circuit reasoned that New Jersey's argument would compel the circuit to take "extraordinary steps" that include invalidating a law under the anticommandeering principle, disregarding the Supremeacy Clause in case of state activity contradicting federal laws and making it more difficult for Congress to enact laws under the Commerce Clause. New Jersey argued that by enacting PASPA, the Congress "impermissibly commandeers the states" and that PASPA was beyond Congress' authority under the Commerce Clause. However, the court held that state-licensed wagering on sports, activity PASPA addresses, is an economic activity that affects interstate commerce. Thus, Congress has, under the Commerce Clause, the power to regulate activity that is "quintessentially economic." The court also noted that PASPA is not against the anticommandeering principle because Congress, by passing PASPA, "is not telling the states what to do, it is barring them from doing something they want to do." The dissenting judge noted that PASPA does not directly regulate interstate commerce or activities substantially affecting such. Rather, it directs states to prohibit from authorizing sports gambling, an otherwise unregulated activity.

The recent decision affirmed the decision [JURIST report] of Judge Michael Shipp for the US District Court for the District of New Jersey [official website] who ruled that PASPA is constitutional, even though it is extremely unpopular in the state. Shipp rejected New Jersey's arguments that PASPA violates constitutional guarantees of state sovereignty and equal protection, saying that if New Jersey citizens disagree with the act, they should seek to have Congress repeal it rather than fight it in the courts. In October JURIST guest columnist Kathryn Young defended New Jersey's sports betting law [JURIST op-ed], arguing that gambling can effectively increase states' revenue and should be viewed outside of its negative connotations. There is a presumptive prohibition on most forms of gambling in the US, although restrictions on some forms of Internet gambling were loosened late in 2011 when the Department of Justice (DOJ) clarified that non-sports online gambling is presumptively legal [JURIST report]. In January 2012 Patrick Fleming [advocacy profile], Litigation Support Director at Poker Players Alliance [advocacy website], argued that the decision bolstered the legitimacy of Internet betting [JURIST op-ed], yet the gambling landscape remains a patchwork of many distinct standards and statutory definitions.

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