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How New Jersey Can Crush PASPA … If the State Really Wants To

Tuesday’s ruling by the US Third Circuit Court of Appeals in favor of the existing Professional and Amateur Sports Protection Act, or PASPA, leaves the state of New Jersey pretty much where it was four years ago: Searching for a path through which the state can legally implement the statewide sports betting that its voters have already approved.

Welcome to New JerseyIt’s unlikely you’ve missed the latest news in the matter, but just to recap: With its 2-1 loss in the appellate court’s latest ruling, New Jersey now has two long-shot options regarding the current case.  The most likely first option is for the state’s attorney general’s office to request an en banc hearing from the hearing, which means asking all of the Third Circuit’s appellate judges to lodge an opinion, and thus hope that the overall decision of all the judges reverses the 2-1 decision from Tuesday.

The second option is to re-appeal the appeal, so to speak, but to the US Supreme Court.  The en banc option is a long shot, but the Supreme Court option faces even longer odds, since that court only hears a couple of percent of all the cases which are submitted to it for examination.  The first time New Jersey tried it, with an earlier version of its sports-betting legalization bill, the Supreme Court passed on a chance to hear it.  So there’s not much for precedent to wish for or wait on.

If both of those options fail, the third option is… back to the drawing board.  And, hard as it maybe to believe, that might be New Jersey’s best short-term bet for getting the wrong-headed PASPA bill overturned.

Here’s why: The current version of the bill that was passed by New Jersey’s legislature and later signed by Governor Chris Christie just might be a little bit intellectually lazy.  Though well-intended by the bill’s primary author and sponsor, NJ State Senator Ray Lesniak, the bill actual contains language that specifically mentions the state’s casinos and racetracks, rather than specifically excluding everything else.  The difference appears crucial, and appears to have given the two judges who ruled in favor of PASPA’s existing ban just enough legal leverage to keep PASPA intact and in place.

Judges do not like throwing out laws, even bad ones.  So they will search for ways to force that job back to the legislatures of both the states and the feds, forcing them to do their job.

Can New Jersey overturn PASPA by crafting and passing a better bill?  This writer says yes, but it involves two things: Taking the time to craft a comprehensive list of both business and non-business locations and categories, and then banning all of them from offering or hosting sports betting, and then allowing the possibility of whatever locations might remain to offer sports betting utterly free of supervision or taxation — if only for a very, very brief period of time.

In other words, New Jersey must play a game of chicken with the federal system if it wants to see the bad PASPA law overturned.  If New Jersey’s legislators are truly serious about, they could induce a panic in Washington D.C. that should have the US Congress rushing to rewrite PASPA on their own, just to keep New Jersey’s possible free market for sportsbetting from becoming reality.

Step 1 in this process is to take the same law which was just shot down on appeal, and remove the language which refers to casinos and race tracks not being covered by the law’s general prohibitions against sports betting.

Instead, the bill should expand upon the general prohibition by banning all non-business property in the state from offering sports betting services, ranging from churches to city streets to swamps, or any other such land.  Next comes a specific “business” prohibition listing all the categories of businesses that will be deemed ineligible to offer sports betting services, which would include all such business types, but omit casinos and racetracks, utterly without mention.  (Referring to a list of New Jersey business codes such as this would be a great start.)  Additional statute language would declare that newly added codes are also automatically ineligible to host such services.

The point of such a legal structure would be to leave the casinos and race tracks unaffected by a ban without specifically mentioning those facilities, which should free the bill from the legal limbo cited by the two appellate judges who ruled on Tuesday to uphold PASPA.

Unfortunately, that structural shift would also leave those casino and racetrack facilities unavailable for licensing or regulation, at least for the very short term; they’d be able to operate tax-free, in theory.  The bill could be passed with the understanding that a regulatory framework formally authorizing New Jersey’s casinos and racetracks would be passed within a very brief period (say, 48 hours) of the federal-level PASPA law being repealed or modified.

The idea, the game of legal chicken, is that the prospect of New Jersey allowing unregulated, untaxed sports betting to occur within its borders — but only at otherwise licensed casinos and racetracks — should be enough to get PASPA under a federal microscope in a big hurry.  Sure, that would come with big, big threats, including the likely vow from Roger Goodell to burn Trenton to the ground before the NFL lets another game be played in the Meadowlands.

Still, if New Jersey is truly serious about offering sports betting, and had the political will to follow through, it wouldn’t matter.  PASPA would go away in a hurry.

Do I really think this scenario will happen?  Of course not; it’s a theoretical exercise, a what-if pipe dream.  But it’s built on a sound concept: If New Jersey truly wants PASPA to go away, a legal path does indeed exist.

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