N.J. sports-bet dispute returns to federal court

For the second time in less than two years, the Christie administration was in federal appeals court Tuesday, trying to establish the right to have sports betting at ailing Atlantic City casinos and horse tracks.

Lining up against New Jersey were the NCAA and the four major U.S. professional sports leagues, which have attempted to block the state's sports gambling dreams since it authorized the betting in 2011.

Gov. Christie and legislators designed the law to comply with a 2013 appeals court ruling that suggested that federal law did not prevent states from repealing - fully or partially - laws that ban sports betting. The federal Professional and Amateur Sports Protection Act of 1992 (PASPA) prevents states from authorizing sports betting.

In questioning Theodore B. Olson, who represented the Christie administration, Judge Marjorie O. Rendell focused on what it means for a state to authorize an activity.

"We have to decide that," she said, clearly puzzling over whether a repeal of the sports-betting ban at certain locations amounts to authorization.

Her colleague, Judge Julio M. Fuentes, had written the 2013 Third Circuit opinion suggesting that New Jersey could comply with federal law by repealing its ban on sports betting. On Tuesday, Fuentes pressed Paul D. Clement, who represented the NCAA and four major U.S. professional sports leagues on how far a state's repeal would have to go to comply with federal law.

"It is not all or nothing," Clement responded.

That was a concession compared with what the leagues had argued in their brief, which said a repeal had to be all or nothing, said Daniel L. Wallach, an appellate lawyer who was at Tuesday's hearing in the U.S. Court of Appeals for the Third Circuit as an observer.

"The court is not buying that, so the leagues' counsel had to tap-dance and concede that point to some extent, but he couldn't articulate where the line is drawn," said Wallach, of Becker & Poliakoff in Fort Lauderdale, Fla., who contributes to his firm's KOZ on Gaming blog.

Under questioning, Clement did say it would be acceptable for a state to repeal a ban on sports bets under $100 among acquaintances or family members.

Clement also emphasized that New Jersey's law repeals the ban only at sites that the state licenses or has licensed for gaming.

The law signed by Christie in October repealed prohibitions on sports betting at Atlantic City casinos and at three active racetracks, Freehold Raceway, the Meadowlands, and Monmouth Park.

But a provision in the law allows sports betting at former racetracks, which are no longer licensed, supporting the state's position.

Those two sites are Garden State Park Racetrack in Cherry Hill, which had its last race in 2001, and Atlantic City Race Course, which closed in January.

"Without licensing as the hook to show that this partial repeal was essentially authorization, I think that leaves the [leagues'] argument wanting," said Alan C. Milstein, a Moorestown lawyer at Sherman, Silverstein, Kohl, Rose & Podolsky P.A., who attended the hearing.

Milstein predicted that the three-judge appeals court panel, which also included Maryanne Trump Barry, would rule in favor of New Jersey in the case often called Christie II. But he said the case will likely need to be resolved in front of a full nine-judge panel.

"I don't know what's going to happen when all nine judges get there," he said.