New Jersey’s long effort to overturn a federal ban on sports betting saw new light as the Third Circuit Court of Appeals has opted to hear the case again.
Dennis Drazin, adviser to the New Jersey Thoroughbred Horsemen’s Association, the operator of the Monmouth Park race track in Oceanport, said the Third Circuit has granted the state’s petition to have the entire panel of judges hear the case after a three-judge panel ruled in August that the state could not legally allow sports wagering.
“The entire court will entertain the case, so what they did was vacate the August decision,” Drazin said. “Now the court will go back and hear the case, which means the majority of the active judges voted that they wanted there to be a hearing. I am very optimistic. It’s a positive sign and it is not an open-and-shut case. They so rarely grant this, so this is a big step in our favor.”
In an Aug. 25 ruling, two of three Third Circuit Court of Appeals judges ruled in favor of four professional sports leagues and the NCAA when they said New Jersey’s 2014 law deregulating sports wagering violates federal law.
The case pits the defendants, including the New Jersey Racing Commission, the thoroughbred horsemen and the New Jersey Sports and Exposition Authority, against four professional sports leagues and the NCAA.
Drazin said depending on the court’s schedule, it may possible to have sports betting in place at Monmouth Park by the Super Bowl in February. However, he said that may be optimistic and a hearing would likely have to be set by December in order for that to occur.
According to Drazin, all parties involved had to submit briefs by Oct. 28.
“The court has asked us to refile the briefs that were submitted before,” he said. “Then the court will let us know whether they will entertain oral arguments. We believe they will and then they will decide the case.”
U.S. Rep. Frank Pallone Jr. (D-Monmouth), who has been a proponent of legalized sports betting and has sponsored legislation to end the federal ban on sports betting, said the court’s decision to hear the case is a major step forward.
“I think it is very important. I believe any prohibition on sports betting is unconstitutional,” Pallone said. “Otherwise, it actually violates the 14th Amendment for due process and equal protection because why should some states be allowed to have it and not others? So if we could get the court to recognize that, then we would not have to worry about passing any legislation to legalize it.”
Days after Gov. Chris Christie signed a bill into law in 2014 to allow sports wagering in New Jersey, the NFL, NBA, NHL, NCAA and Major League Baseball filed suit to stop Monmouth Park from accepting wagers on sporting events. On Nov. 21, 2014, a federal judge upheld the federal ban on sports wagering, leading to the state’s appeal to the Third Circuit. The Third Circuit also shot down a 2012 law legalizing sports betting with both rulings claiming the laws violated the Professional and Amateur Sports Protection Act, which bars sports betting in all but four states.
Monmouth Park’s development plans — including an indoor water park, a hotel and other amenities — are tied to the additional revenues projected from sports betting.
Drazin has estimated that $1 billion would be wagered each year at Monmouth Park if sports betting was legalized. That could net $75 million in annual revenue for the track, which is Oceanport’s largest taxpayer.
The federal government banned sports betting in 1992 and states were given a window of one year to legalize it. Only officials in Nevada, Delaware, Montana and Oregon chose to legalize sports betting.
Of the four states currently exempt, only Nevada has large-scale sports betting, while the other three states currently have limited wagering.
In the absence of traditional sports betting, Drazin said that Monmouth Park’s operators would offer daily fantasy sports wagering beginning Oct. 25.
In recent weeks, two major fantasy sports companies, who are not being used at Monmouth Park, have come under fire regarding their operations and whether wagering on fantasy sports should be considered sports betting, which it currently is not. “When all of the advertising (for fantasy sports) began at the beginning of the NFL season, I sent a letter to the chairman of the Energy and Commerce Committee saying we should have a hearing,” Pallone said. “I believe what (fantasy sports operators) Draft Kings and Fan Duel are doing should be considered gaming and are therefore violating the carve-out (in the federal law). I think what is happening in the last month or so is there is more and more realization that it is in fact gaming and therefore not allowed.”
Pallone called the professional sports leagues that are fighting New Jersey hypocrites for entering into partnerships with the fantasy sports companies and promoting fantasy sports while fighting against sports betting. He said that fantasy sports should be considered gambling and should be regulated by the states so consumers have a level of protection.
“The answer to it, in my opinion, is to allow sports betting in general and, if fantasy sports wants to compete with it, then fine,” Pallone said. “They are all gaming and they should all be allowed and they should all be regulated by the states. It would be transparent so you don’t have to worry that your bet is rigged in some way.”
Pallone pointed to a recent decision issued in Nevada which requires fantasy sports companies to obtain gaming licenses to operate as a clear indication that what they offer should be considered gambling.