By Jonathan Stempel
(Reuters) - A federal appeals court on Tuesday said New Jersey cannot enforce a 2014 law permitting sports betting, in a big defeat for the years-long effort to legalize such wagers.
The 3rd U.S. Circuit Court of Appeals in Philadelphia said the state law allowing sports betting at casinos and racetracks violated the federal Professional and Amateur Sports Protection Act, which limits the practice to a few states, including wagering in Nevada and lotteries in Delaware and Oregon.
"Because PASPA, by its terms, prohibits states from authorizing by law sports gambling, and because the 2014 law does exactly that, the 2014 law violates federal law," Circuit Judge Marjorie Rendell wrote.
The 10-2 decision is a defeat for Governor Chris Christie, who has seen courts void two state laws designed to raise revenue through sports betting, and a victory for national sports organizations that opposed them. The appeals court in 2012 voided an earlier version of the New Jersey law.
"We were relying on having sports betting to give a big boost to our ailing Atlantic City casinos and our suffering racetracks," state Senator Raymond Lesniak, a Democrat who sponsored the 2014 law and a 2011 voter referendum allowing sports betting, said in an interview. "It's just wrong for Congress to deny New Jersey what the state of Nevada has."
Reflecting the stakes, two former U.S. solicitors general were on opposite sides of the case.
Theodore Olson represented New Jersey, while Paul Clement argued for Major League Baseball, the National Basketball Association, the National Football League, the National Hockey League and the National Collegiate Athletic Association.
Neither lawyer was available for comment. New Jersey Attorney General Christopher Porrino's office had no immediate comment.
The 2014 law banned wagers on state college teams and limited bets to people age 21 and older at casinos and racetracks.
Rendell acknowledged the law's "salutary purpose" in trying to revive those troubled industries, but said PASPA nonetheless "does not commandeer the states in a way that runs afoul of the Constitution."
The sports organizations, backed by the U.S. government, called the law "yet another attempt" to allow sports betting "only under the conditions of the state's choosing."
One dissenting judge thought the 2014 law permissible despite PASPA. The other thought PASPA was unconstitutional because it violated state sovereignty.
"We do have two judges dissenting," Lesniak said, "and we certainly will take a shot at the Supreme Court."
The case is National Collegiate Athletic Association et al v. Governor of the State of New Jersey et al, 3rd U.S. Circuit Court of Appeals, Nos. 14-4546, 14-4568, 14-4569.