New Jersey’s attempt to legalize sports betting has failed, at least for now. According to NorthJersey.com, the U.S. Third Circuit Court of appeals in Philadelphia upheld a federal ban on sports betting. The state was hoping to allow sports betting at state racetracks and inside Atlantic City casinos.

In a split-decision, an appellate panel ruled 2-1 against New Jersey, affirming the 1992 law that banned sports betting in all but four states in the U.S. Ironically, the one dissenting vote was the judge that wrote the opinion that upheld the same law back in 2013.

Panel determines 2014 law violates PASPA

New Jersey passed a bill in 2014 that authorized state racetracks and casinos to offer sports betting, a move that State Senator Ray Lesniak – a major supporter of New Jersey online gambling sites – believes was lawful. According to Lesniak, “We repealed a law for sports betting at casinos and racetracks, and that does not violate the federal ban. We are allowed to do that.”

Two out of the three judges in the appellate panel did not agree. The panel was comprised of Judges Marjorie Rendell, Maryanne Trump Barry and Julio Fuentes. Fuentes was the only judge on the panel back in 2013 when New Jersey last tried to legalize sports betting.

This time around, Rendell and Barry were the two in far of upholding the Professional and Amateur Sports Protection Act (PASPA). Rendell wrote the opinion and stated, “The issue presented in this appeal is whether [the 2014 New Jersey law] to partially repeal certain prohibitions on sports gambling, violates federal law. The District Court held that the 2014 Law violates the [1992] Professional and Amateur Sports Protection Act (“PASPA”). We will affirm. PASPA, by its terms, prohibits states from authorizing by law sports gambling, and the 2014 Law does exactly that.”

Judge Julio Fuentes was the dissenting panel member and to paraphrase his ruling, he did not believe that a partial repeal of the PASPA equaled the state authorizing sports betting. Rather, he believes that the state was lifting the prohibition of sports betting on casinos and racetracks and that the authorizations for those activities would come from the state regulatory body.

Summing up his opinion, “Because I do not see how a partial repeal of prohibitions is tantamount to “authorizing by law” a sports-wagering scheme in violation of PASPA, I respectfully dissent.”

What’s next for New Jersey sports betting?

Congressmen Frank Pallone and Frank LoBiondo issued a statement regarding Tuesday’s decision:

“We are very disappointed with today’s ruling, which arbitrarily robs New Jersey of the opportunity to benefit from the billion-dollar sports betting industry. Several states can already operate sports betting, but New Jersey has been shut out despite the will of our citizens. The fact is, the citizens of New Jersey passed a constitutional amendment by referendum and the state legislature acted to give it effect. The federal government should not stand in the way.

Legal sports betting will have a significant and positive impact on New Jersey, bringing tourism and tax revenue to the state and reinvigorating Atlantic City and our racetracks, including Monmouth Park.

The citizens of New Jersey have spoken loud and clear – they want the opportunity to share in the profits from professional sports betting. Furthermore, the existing federal law is unconstitutional and arbitrary, giving four states the opportunity to access the sports-betting industry, while shutting out the rest. We remain committed to seeing sports betting become legal in New Jersey, and today’s ruling strengthens our commitment to continuing our work to see this change occur.”

As far as what’s next for New Jersey, they have a couple of options. The first would be to appeal to the Third Circuit en banc, which means that the all active judges would hear the case. The other would be to try to appeal to the United States Supreme Court.

Senator Lesniak issued a statement urging that the fight must continue for NJ sports betting, stating:

“I’ve made that statement prior and I continue to make it today. This is an issue that strikes to the will of the people. After more than 60% of the citizenry approved sports betting and the Court provided contours for us to make it permissible, we did just that.

It is imperative for our horse racing and casino industries, which have struggled as of late, to have alternative revenue sources, and sports betting provided just that. Racing in New Jersey is an economic engine that accounts for tens of thousands of jobs and billions to the state economy, not to mention the open spaces and green acres that are accompanied with it. I won’t rest until this industry is on firmer footing.”