NEW YORK (Reuters) - A U.S. appeals court on Tuesday ruled against a New Jersey law authorizing sports gambling in the state, upholding a lower court ruling that voided the state’s repeal of some prohibitions against betting on games.
Attorneys and advisors had predicted that had New Jersey won, it would have enabled the state to grab a slice of a national market that could be as much as $400 billion and would have had implications beyond the state.
New Jersey Governor Chris Christie, who is running for the Republican presidential nomination for 2016, in October signed legislation partially repealing a ban on sports wagering in the state.
The state has struggled financially, suffering from credit downgrades and underfunded pensions. New Jersey stood to gain about $10 billion if legal sports betting spread, according to Dennis Drazin, an advisor to two parties involved in New Jersey’s Monmouth Park Racetrack.
The decision by the U.S. Court of Appeals for the Third Circuit was by a 2-1 vote.
”Besides ruling against New Jersey’s plan to legalize sports betting, the Third Circuit did not offer a potential roadmap to legalization, as many had predicted, said Daniel Wallach, gaming attorney with Becker & Poliakoff in Florida.
Christie’s office did not immediately comment.
The National Collegiate Athletic Association, National Football League, National Basketball Association and other leagues sued after New Jersey lawmakers legalized sports betting in 2012. The leagues said that violated a 1992 federal law that banned the activity in all but four states, particularly Nevada, where it was already allowed. Betting also threatens the integrity of sports games, they argued.
New Jersey lost, but tried again last year with legislation that attempted an end-run around the federal ban prohibiting states from authorizing, sponsoring, operating or licensing the practice. The measure essentially removed state control and deregulated sports wagering at casinos and racetracks.
“We are pleased that the Third Circuit has adopted the position of the sports leagues and the NCAA,” said Major League Baseball in a statement.
The American Gaming Association (AGA) is assessing the implications of the court’s decision, according to a statement.
“With Americans betting at least $140 billion on sports illegally each year, it’s clear that (the) current law is not achieving its intended result,” said AGA President and CEO Geoff Freeman.
One industry, fantasy sports, stands to gain from the decision Wallach said, as it would “continue to have a monopoly in the sports gambling space.”
Reporting by Jonathan Stempel, Jessica DiNapoli and Megan Davies, writing by Megan Davies; editing by David Gregorio