Many states have fantasy sports laws in place that are intended to create regulatory bodies within their borders for the purpose of overseeing and regulating fantasy sports operators. The big fantasy sports companies that come to mind are FanDuel and DraftKings, but many other corporate entities are doing business and thinking about launching gaming products for consumers to engage in different types of fantasy sports offerings.
As expected, this past week the state of New Jersey – along with the New Jersey Thoroughbred Horsemen’s Association – formally filed its request for the Third Circuit Court of Appeals to rehear arguments in the recently decided sports betting case. This Gaming Law issue comes on the heels of the state’s 2-1 defeat in front of a three-judge panel of the Third Circuit of Appeals last month. With its request of an en banc hearing, New Jersey hopes re-arguing in front of the entire panel of Third Circuit judges will enhance the chances of New Jersey State Senator Ray Lesniak’s bill being passed into law, which would allow casinos and racetracks to offer sports betting within the state.
En banc hearings are granted on rare occasion, and the percentage of requests granted has steadily dropped over the years. In 2000, 73 cases were decided en banc in the United States; however, in 2010, only 44 cases were heard. The drop in cases can also be seen in the Third Circuit, which have only issued 18 en banc rulings since 2010, granting rehearing en banc in about 1 out of 1000 cases. The reason for the low number of en banc cases – not only in the Third Circuit but also across the nation – can be seen in the stringency of the rule used to decide which cases deserve to be heard. Pursuant to Federal Rule 35 of Appellate Procedure:
“An en banc hearing or rehearing is not favored and ordinarily will not be ordered unless:
(1) en banc consideration is necessary to secure or maintain uniformity of the court’s decisions; or
(2) the proceeding involves a question of exceptional importance.”
According to the Third Circuit, exceptional circumstances are those that “include instances in which the panel overlooked or misapprehended points of law or fact that truly affect the outcome of the appeal, where the panel opinion directly conflicts with another panel decision, or where a pivotal point of the case has been affected by a new precedential decision or by a new statute that could not have been cited in the briefs or at oral argument (and was not cited in the Court’s decision).”
As grounds for its request, New Jersey claims that the recent decision reached by the majority is in direct conflict with a 2013 decision, in which the court ruled that the Professional and Amateur Sports Protection Act (PASPA) was constitutional. New Jersey claims that, although the 2015 court acknowledged the prior court’s decision, it did so in way that favored the reasoning of the dissenting judge in the 2013 decision, who believed that PASPA was unconstitutional. However, because the result of the two decisions appear to be in line, in as they both outlaw or prohibit sports betting, it does not appear that the state’s grounds fall under the first prong for an en banc hearing.
Therefore, the question appears to be whether the Third Circuit’s decision on sports betting is one that constitutes an extraordinary circumstance. While some believe the impact the decision carries is one of great public importance, according to the guidelines followed by the Third Circuit, the judges may decline to agree. As such, it appears New Jersey’s chances of allowing sports betting within its boundaries remain a long a shot. In the event an en banc hearing is not granted, the state may still appeal to the Supreme Court; however, the chance of the Court accepting the case is slim, as the Supreme Court receives approximately 10,000 petitions to hear a case per year, yet only hears oral argument in about 75-80, meaning New Jersey has a lower chance of arguing in front of the Supreme Court than it does in front of an en banc panel of the Third Circuit. Thus, it appears New Jersey’s best hope to legalize sports betting would be overturning PASPA, the federal law that prohibits it in the first place.
 The entire list can be viewed at http://thirdcircuitblog.com/judges/a-closer-look-at-the-third-circuits-recent-en-banc-cases/.
 NJTHA’s Petition for Rehearing En Banc can be read at http://www.legalsportsreport.com/wp-content/uploads/2015/09/NJTHA-Motion-for-Rehearing-En-Banc.pdf
Gamblers in New Jersey take note – November 8, 2011 may become a recognized holiday for you. On that day, New Jersey voters passed a state constitutional amendment to allow sports betting at casinos and racetracks. The measure was passed 64% to 36%. A New Jersey Senate state government and wagering committee has already cleared enacting legislation. New Jersey governor Chris Christie has stated that he will not have any problems signing the bill into law.
What is still standing in the way? Certainly the Professional and Amateur Sports Protection Act of 1992 (PASPA) and perhaps the NFL and its war-chest. PASPA is a federal law, which completely denies forty-six states (including New Jersey) from adopting any type of state-sponsored sports betting scheme. PASPA exempted four states (Nevada, Delaware, Oregon, and Montana), allowing those states to continue to operate the state-sponsored sports betting schemes that had been in place prior to PASPA’s adoption.
In 2010, I wrote an article titled, The Plight of PASPA: It’s Time to Pull the Plug on the Prohibition and published in the Gaming Law Review and Economics, which argues that PASPA’s original purpose is outdated and that the Act is in violation of the Tenth Amendment and Commerce Clause within the United States Constitution.
Will the constitutional amendment passed by the constituents of New Jersey and cleared by a New Jersey Senate committee be nothing more than a symbolic measure? Perhaps the state’s actions will add further proof that PASPA violates the Tenth Amendment. It shows that sports betting is not only something requested by New Jersey’s state government, but that the state’s constituents are also in favor of legalized sports betting. Most importantly, it should be enough to withstand a claim that there is lack of standing and/or failure to state a claim. A recent lawsuit that challenged the constitutionality of PASPA was dismissed for those specific reasons. The judge’s Order stated, “the proper party to bring such a claim would be New Jersey’s attorney general.” New Jersey’s current attorney general is Paula T. Dow.
In May 2010, my article, The Plight of PASPA: It’s Time to Pull the Plug on the Prohibition was published in the Gaming Law Review and Economics. The article focuses on the Professional and Amateur Sports Protection Act (PASPA), which has completely denied forty-six states from adopting any type of state-sponsored sports betting scheme. The Act, which became law in 1992, exempted four states (Nevada, Delaware, Oregon, and Montana), allowing those states to continue to operate the state-sponsored sports betting schemes that had been in place prior to the Act’s adoption. One of those non-exempt states is New Jersey, which would love to have the ability to operate state-sponsored sports betting schemes in order to have a new source of revenue. The article argues that PASPA’s original purpose is outdated and that the Act is in violation of the Tenth Amendment and Commerce Clause within the United States Constitution.
I focused an entire section on the State of New Jersey. Here are pieces of that section: Read more “New Jersey Making A Push For Legalized Sports Betting”