The World Cup is in full swing in Brazil and soccer fans around the world have been glued to their TVs/social media platform of choice to follow the games. So far, Team USA is 1-0 in a tough division, but the country is ever hopeful.
Major sporting events such as the World Cup always create a global uptick in sports betting. In particular, Asia has seen a large increase in illegal sports betting (See here).
As you may be aware, sports betting in the United States is extremely limited. Currently, the only state that has legal sports betting is Nevada. However, in 2011, a sports betting referendum was passed by voters in New Jersey. Subsequently, the NCAA, NFL, NBA, MLB and NHL filed suit against New Jersey, attempting to block the state from allowing sports betting.
The District Court for the District of New Jersey held that the State's sports betting initiative was preempted by the Professional and Amateur Sports Protection Act ("PASPA") and that PASPA was constitutional. This ruling meant that New Jersey's implementation of sports betting was in violation of PASPA, which are a preexisting series of federal laws that were found to be legally created by Congress. Interestingly, New Jersey had the opportunity to become exempt from PASPA after its adoption, but failed to do so. New Jersey appealed the District Court's decision, but it was upheld by the Third Circuit Court.
New Jersey is now attempting to appeal the Third Circuit's decision to the United States Supreme Court, and is currently awaiting the Supreme Court's response as to whether they will take the case. The State is confident that the case will be accepted and that the Court will find in its favor.
However, if the case is not accepted by the Court, State Senator Ray Lesniak has claimed that he will introduce an amendment to state law that will allow "legal" sports betting in casinos and racetracks within New Jersey. On June 16, 2014, Lesniak appeared on a radio show and announced that the State will move ahead with its plans to implement sports betting should the Supreme Court decline to accept the case. During his interview, Lesniak went so far as to say that sports betting will be in place by Week 1 of the NFL season in September.
Lesniak likened New Jersey's challenge of PASPA to Colorado's legalization of marijuana, which is unfair. Marijuana reform had growing support across the country and within the federal government, whereas sports betting has been largely seen as an illegal activity outside of Nevada. In any event, it would not be surprising for the Supreme Court to take this case as a means of clarifying states' rights in the face of federal legislation.
Lesniak's latest comments have raised the stakes in this already interesting litigation, and it appears as if New Jersey is ready to defy federal law and the collective will of the major sports leagues. This litigation will certainly be interesting to follow, whether or not the Supreme Court decides to take the case.
One thing is for certain, should New Jersey legalize sports betting, its casinos stand to make even larger sums of money. Perhaps more importantly, if New Jersey succeeds in legalizing sports betting, other states may soon follow.
I will be following this story closely over the next several months.
Quiles Law is an esports and sports law firm based in New York City.
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