A Third U.S. Circuit Court of Appeals panel has upheld the federal ban on sports betting in all but four states. The Professional and Amateur Sports Protection Act (PASPA) was enacted in 1992. Nevada, Oregon, Montana and Delaware were grandfathered in as exceptions to the ban.

Another exception was granted to New Jersey on the condition the state enact a sports gambling law within one year of PASPA’s enactment. New Jersey failed to do so and the exception expired. Fast forward to 2011. New Jersey voters voted to amend the New Jersey Constitution to allow sports gambling. In 2012, the Sports Wagering Act was enacted by the New Jersey Legislature. Five sports leagues (the NCAA, NFL, NBA, NHL and MLB) sued, arguing this law violated PASPA. New Jersey did not dispute the act violated PASPA. Instead, they argued that PASPA was unconstitutional. A Federal District Court held that PASPA was constitutional. New Jersey appealed and the Third Circuit affirmed (Christie I). New Jersey appealed to the U.S. Supreme Court who denied to hear the appeal. In 2014, New Jersey passed SB 2460, which prohibited sports betting everywhere except casinos and racetracks. Which brings us to the latest appeal. In a 2-1 decision, the Third Circuit panel ruled that this authorized by law sports gambling, which is prohibited by PASPA.

State Senator Ray Lesniak has vowed to appeal. Legal options for the state are both difficult.

Ask for a rehearing “en banc,” which would be heard by the entire bench instead of the 3-judge panel that rendered this decision. Such rehearings are rarely granted. A conflict with a prior decision or something of exceptional importance are reasons an “en banc” rehearing would be granted. The dissenting judge in this decision, Judge Julio Fuentes was against New Jersey in the Christie I decision. Does this create a conflict with the prior decision?;

Petition the U.S. Supreme Court. Only about 1% of all petitions are accepted for review. And the fact the Supreme Court denied to hear the first appeal doesn’t bode well for New Jersey.

But the Third Circuit decision did provide a way a state could offer sports wagering and still be in compliance with PASPA. In the decision, the court stated “We agree that, had the 2014 Law repealed all prohibitions on sports gambling, we would be hard-pressed, given Christie I, to find an “authorizing by law” in violation of PASPA. But that is not what occurred here.” So if New Jersey had repealed ALL prohibitions on sports betting, they probably would have won the appeal.

The fight is not over. Indiana, Minnesota, New York, South Carolina and Texas introduced sports betting legislation last year. Federal sports betting legislation has been introduced by New Jersey congressmen. The bills currently sit in a judiciary committee. There are no other current legal challenges to PASPA.