A Philadelphia appellate court voted to reconsider a ruling against New Jersey in its federal sports betting case. The ruling means August's 2-1 decision in favor of the NFL's lawsuit against New Jersey could be overturned.
The 3rd Circuit Court of Appeals said back in August that New Jersey's attempt to legalize sports betting in casinos and at racetracks was against federal law. New Jersey had the right to ask for an "en banc" ruling, which would require all 24 of the 3rd Circuit Court's judges to rule on the case. The appellate court had the right to deny such an appeal. A panel of 11 active judges in the 3rd Circuit Court could decide whether the en banc judges would see the case. Today, they ruled that New Jersey will get another chance to argue its case in the Third Circuit Court.
Rare Legal Victory for New Jersey
It is seen as a victory by New Jersey's leaders. In a case where 5 consecutive rulings in 3 separate courts went against the state, any decision which goes its way is good news. There are real reasons for optimism in Wednesday's decision, though.
For the "en banc" ruling to go its way, 6 of 11 judges had to rule in New Jersey's favor. All eleven of those judges are among the 24 to rule in the wider decision. That means New Jersey is nearly halfway to getting a decision in its favor, with more than half of its judges still yet to vote. Presumably, the 2 judges in the August ruling were among the panel which ruled on Wednesday, because it is comprised of the sitting judges (and not those semi-retired).
"Precisely the Opposite" Court Decisions
Experts caution that a judge who ruled on New Jersey's behalf on Wednesday might not necessarily vote in favor of New Jersey sports betting. But the argument in New Jersey's filing before the Wednesday panel argued that the ruling by the 3rd Circuit Court of Appeals were at odds with one another. Enough agreed that it throws into question whether the two decisions--one in 2013 and one in August 2015--are not contradictory. If so, the judges are likely to overturn the decisions.
That is what 3rd Circuit Judge Julio Fuentes said in his dissenting opinion of the August ruling. He wrote that the 2013 decision and the 2015 decision were "precisely the opposite". Six of the eleven judges ruling on Wednesday seem to agree. Enough of a difference exists that it needs to be studied in great depth, it would seem.
After the 2013 ruling, New Jersey asked for the "en banc" court to rule on the case. At the time, the court declined the appeal. Thus, a shift in opinions has occurred in the intervening two years.
NFL and NBA Lawsuit
The case stems from a lawsuit brought by the NFL, NBA, NHL, MLB, and NCAA. When New Jersey moved to allow Monmouth Park to accept bets through its William Hill sports bar, the league sued to shut down that operation. The leagues argued legalized sports betting would undermine the integrity of their games, while New Jersey's attempt to punish bookies while allowing a racetrack to offers sports wagers was a backdoor way to regulate the industry.
District Judge Michael Shipp ruled on two separate cases that the sports leagues' arguments had merit. New Jersey appealed to the 3rd Circuit Court of Appeals, which is what brought on the August 2015 decision. In 2013, a similar lawsuit took the same path, with the case ending up being appealed by New Jersey to the U.S. Supreme Court, which declined to hear the case. In the earlier lawsuit, the sports leagues won every decision.
Charges of Hypocrisy
The leagues' arguments have brought charges of hypocrisy from the public and the punditry, though. Las Vegas sports betting has not been a danger to their sport, so it's hard to see why Monmouth Park wagers would be. The sports leagues have embraces traditional fantasy sports and the newer "daily fantasy sports", which require American sports fans to place wagers on the outcome of contests which use NFL stats (and other league stats).
Legality of Daily Fantasy Sports
While the DFS sites like FanDuel and DraftKings argue their hobby is not gambling, most people do not see it that way. Thus, they wonder why the NFL, NBA, and Major League Baseball embrace the one pasttime, while seeking to ban the other. Those people tend to see it as a matter of revenue--the leagues' television partners get big advertising dollars from the daily fantasy sports services. Increasingly, leagues and franchises are signing sponsorship deals with those services themselves.
Earlier this week, two New Jersey lawmakers asked the U.S. Justice Department to look at the legality of daily fantasy sports. In the wake of a scandal involving DraftKings and FanDuel, U.S. Senator Bob Menendez and Representative Frank Pallone called for a probe into the legality of DFS real money transactions. It has been a matter of faith that all fantasy sports, including the one-day version, has been legal under the 2006 UIGEA federal law.
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