Goodwin Gaming
October 27, 2014

Not-So-Instant Replay: Restraining Order Granted Against New Jersey’s Updated Sports Betting Law

By Robert M. Crawford, Jr.

A little over a year ago, the Third Circuit upheld the New Jersey District Court’s permanent injunction against Governor Christie and others prohibiting New Jersey’s 2012 Sports Wagering Law as a violation of the federal Professional and Amateur Sports Protection Act (“PASPA”).  The suit had been brought by the NCAA, NBA, NFL, NHL, and MLB in front of U.S. District Court Judge Michael Shipp.  After a reboot of New Jersey’s sports betting law, the parties are once again in Court in front of Judge Shipp, with the professional sports leagues claiming that New Jersey’s 2014 Sports Wagering Law is still in violation of PASPA.  A temporary restraining order has been granted preventing New Jersey “from implementing, enforcing, or taking any action” regarding the new law, and specifically restraining New Jersey Thoroughbred Horesemen’s Association and New Jersey Sports Exposition Authority from conducting sports wagering and even advertising or promoting it.  And now the Court must determine if a permanent injunction should be issued, once again.

New Jersey’s updated law is attempting to capitalize on language from the Third Circuit’s decision, which held that PASPA prohibits states from authorizing sports betting, but “a state may repeal its sports betting ban, a move that will result in the expenditure of no resources or effort by any official.”  Rather than permitting sports betting, the 2014 Act partially repeals the State’s prohibitions on sports betting.  In its opposition to the temporary restraining order, New Jersey claimed this is “precisely what the Third Circuit held is permitted.”  The sports leagues said it “is nothing more than a de facto authorization of sports gambling,” particularly because it is only lifting its prohibitions on venues that are already state-licensed and regulated.

Atlantic City casinos and New Jersey racetracks were poised to begin taking sports bets as early as last Sunday’s football matchups, but the Court’s temporary restraining order stopped that play.  A ruling on the permanent injunction is expected next month, but the Court will be evaluating the same factors it did for the issuance of the temporary order:  likelihood of success on the merits; likelihood of irreparable harm in the absence of relief; whether harm to the moving party (professional sports leagues) outweighs harm to the non-moving party (New Jersey and gambling institutions); and whether relief is in the public interest.  The issuance of the temporary order demonstrates the Court’s determining for all of these factors in favor of the professional sports leagues and does not bode well for New Jersey’s success against the permanent injunction, but New Jersey could continue running the same play and take the fight back to the Third Circuit, and could even once again try to gain the Supreme Court’s attention.

Here is a re-cap of New Jersey’s battle for sports betting:

January 2012:  Following a 2011 referendum, Governor Chris Christie signed into law an act permitting certain sports betting at casinos and racetracks.

August 2012:  Several professional sports organizations, joined later by the U.S. Department of Justice, filed a complaint against Governor Christie and others alleging that the law was in violation of PASPA.  New Jersey responded that PASPA was unconstitutional.

February 2013:  U.S. District Court Judge Michael Shipp barred the implementation of the Sports Wagering Law, holding that PASPA was constitutional and New Jersey’s law was in violation of it.

September 2013:  After oral argument, the Third Circuit affirmed the district court’s ruling to stop the implementation of New Jersey’s Sports Wagering Law.

June 2014:  The Supreme Court denied New Jersey’s petition for certiorari, keeping intact the Third Circuit’s decision invalidating New Jersey’s law and leaving PASPA in full effect.

June 2014:  Inspired by language of the Third Circuit’s decision, the New Jersey legislature passed a bill paving the way for privately owned sports wagering.

August 2014:  Governor Christie vetoed the new bill stating that ignoring federal law would be “counter to our democratic traditions and inconsistent with the Constitutional values I have sworn to defend and protect.”

September 2014:  New Jersey Attorney General, along with Governor Christie, issued a Statewide Directive to allow casinos and racetracks to operate sports pools without fear of criminal or civil liability.

October 15, 2014:  New Jersey legislature passed a new bill (similar, but not identical, to the June 2014 bill) lifting the ban on sports wagering in New Jersey and allowing casinos and racetracks to begin taking bets on games immediately.

October 17, 2014:  Governor Christie signed the revised sports wagering bill.

October 20, 2014:  The professional sports organizations filed a new complaint against Governor Christie and others, alleging that the new law violates both PASPA and the Court’s February 2013 injunction.

October 21-23, 2014:  Briefs were filed by both sides before U.S. District Court Judge Michael Shipp.

October 24, 2014, 4:30 pm:  Judge Shipp issued the Temporary Restraining Order prohibiting any state action under the new law and prohibiting the advertising, promoting, operating or conducting of sports wagering or, prior to Monmouth Racetrack’s plans to offer sports betting starting on Sunday, October 26th.