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Supreme Court to hear New Jersey sports betting case

The announcement comes months after an appeals court ruled against the state on the issue, saying its attempt to legalize sports betting breached federal law.

Gov. Christie speaks during a news conference in Trenton. The Supreme Court agreed Tuesday to take up New Jersey’s bid to allow sports betting at its casinos and racetracks.
Gov. Christie speaks during a news conference in Trenton. The Supreme Court agreed Tuesday to take up New Jersey’s bid to allow sports betting at its casinos and racetracks.Read moreSETH WENIG / AP

The U.S. Supreme Court on Tuesday said it would hear arguments in New Jersey's pursuit to legalize sports gambling at casinos and racetracks.

The U.S. Court of Appeals for the Third Circuit last August ruled against the state on the issue, saying the attempt to legalize sports betting breached the federal Professional and Amateur Sports Protection Act (PASPA), which banned it in all but a handful of states.

Given the limited number of cases the Supreme Court hears each year, Tuesday's announcement "is a very big deal," said Marc Edelman, a law professor at Baruch College's Zicklin School of Business in New York City who specializes in gaming and fantasy sports law.

"The fact that the Supreme Court will hear this case means the members of the court felt the issue was substantially important," he said.

Members of Congress from New Jersey on both sides of the aisle applauded Tuesday's announcement.

The state is hoping to get a slice of the estimated $150 billion that is illegally wagered on sports each year.

State Sen. Raymond Lesniak, a Democrat who has long pushed for legalized sports gambling, said a win in the Supreme Court would boost the fortunes of Atlantic City casinos.

"Atlantic City is going to be packed when we win this case," he said, noting that sports bettors likely would visit the Shore resort for more than just day trips during football season or events such as the NCAA tournament.

New Jersey Sen. Bob Menendez, a Democrat, said in a statement that he hoped the Supreme Court would rule in favor of the state after the case is heard this fall.

"New Jerseyans deserve nothing less, and they made their voices known by overwhelmingly supporting legalized sports betting in the state referendum," he said.

Rep. Frank LoBiondo (R, N.J.), who represents Atlantic City, called Tuesday's announcement one that was a "long time coming" and added that legalizing sports betting would have a positive impact on South Jersey.

"I remain committed to seeing sports betting become legal in New Jersey, and today's announcement strengthens that commitment," he said in a statement.

New Jersey voters amended the constitution in 2011 to permit sports betting at casinos and racetracks, while barring wagers on any collegiate events in the state. Gov. Christie signed a law in 2014 to allow sports betting, prompting the four major sports leagues and the NCAA to sue the state.

The NCAA's website displays a statement against sports betting: "The NCAA opposes all forms of legal and illegal sports wagering, which has the potential to undermine the integrity of sports contests and jeopardizes the welfare of student-athletes and the intercollegiate athletics community."

The Third Circuit struck down New Jersey's law last year, a ruling the Supreme Court will review. Christie said at a news conference Tuesday that he was "very optimistic" following the announcement.

"The fact that the Supreme Court granted cert in this case is a very good sign for sports betting having a future in New Jersey," he said. "I'm encouraged by it. We're not declaring victory, but at least we're in the game and that's what we want to be."

Sports gambling is allowed in Nevada, Montana, Delaware, and Oregon — states that had approved some form of wagering before the federal PASPA law went into effect. Nevada is the only state to allow single-game wagering.

In its August ruling, the Third Circuit acknowledged that New Jersey faces difficult times because of the casino industry's decline. But the appeals court said that PASPA's meaning was unequivocal and that no amount of legal or legislative finesse could overcome its restrictions.

Lawyers for the state argued that the federal ban infringed on states' rights and was unconstitutional.

Edelman said the case would center largely on the balance of state and federal powers and to what extent the federal government "can compel a state to allow or disallow certain behaviors." He also said the case would address the constitutionality of PASPA, which he said can reasonably be questioned since it doesn't apply to all 50 states.

Edelman, who declined to say which way he believes the court will rule, also noted that three of the four major professional sports leagues — the NBA, MLB, and NHL — in recent years have entered partnerships with daily fantasy sports companies such as DraftKings and FanDuel.

"So while  it was the professional sports leagues that pushed very hard for the PASPA in 1992 … they are now profiting from activity that in some ways is similar to the activities they are disallowing with PASPA," he said.

Geoff Freeman, president and CEO of the American Gaming Association, which supports legalizing sports betting in New Jersey, said in a statement Tuesday that the organization was "pleased the Supreme Court appears to have responded favorably to our arguments as to why they should hear this important case."

"The gaming industry, and the American Sports Betting Coalition, is committed to working with all relevant stakeholders to build a system that protects states' rights, fans, and the integrity of sports," he added.

This story includes information from the Associated Press.