(Bloomberg) -- The U.S. Supreme Court will consider reinstating a New Jersey law that would legalize sports gambling at casinos and racetracks, agreeing to hear an appeal from Governor Chris Christie in a new test of states’ rights.
Christie contends the state is being unconstitutionally forced to prohibit gambling by a 1992 federal law that outlaws sports betting in most of the country. Nevada is the only state where single-game wagering is now legal.
“This federal takeover of New Jersey’s legislative apparatus is dramatic, unprecedented, and in direct conflict with this court’s Tenth Amendment jurisprudence barring Congress from controlling how the states regulate private parties,” Christie argued in his appeal.
The case was among several the justices granted on Tuesday for review in the nine-month term that starts in October. On Monday, they issued their last decisions for the current term.
The law is being challenged by the National Collegiate Athletic Association, the National Football League, the National Basketball Association, the National Hockey League and Major League Baseball. They have the support of the Trump administration, which says the federal law -- the Professional and Amateur Sport Protection Act, or PASPA -- is constitutional because it doesn’t require the state to do anything.
The law “neither compels states to regulate according to federal standards nor requires state officials to administer federal law,” acting U.S. solicitor general Jeffrey Wall argued.
New Jersey first tried to legalize sports gambling with a 2012 law that explicitly authorized wagering at casinos and racetracks. When courts struck down that measure, the state tried a less direct approach with a 2014 statute that repealed the state’s prohibition on gambling at tracks and casinos but didn’t explicitly say the practice was legal.
The Philadelphia-based 3rd U.S. Circuit Court of Appeals struck down the New Jersey law on a 10-2 vote.
“The court had to deal with this sooner or later, because eventually more states would have challenged PASPA,” said attorney Dan Wallach, a sports and gaming expert at Becker & Poliakoff in Fort Lauderdale, Florida. “I believe the court took this case to decide whether PASPA is constitutional.”
Christie’s appeal points to the Constitution’s Tenth Amendment and a 1992 Supreme Court decision that said the federal government may not "commandeer" a state’s regulatory power. The governor and his allies say New Jersey’s law would reinvigorate the state’s flagging gambling industry and generate as much as $1 billion in bets in the first year alone.
The sports leagues said New Jersey’s arguments “are irreconcilable with this court’s commandeering cases and would distort that narrow doctrine beyond all recognition.”
They added that “a federal law does not commandeer the states just because it limits their policy options.”
U.S. Senator Robert Menendez, a New Jersey Democrat, said he hopes that the Supreme Court will allow the state law to go into effect.
“While federal restrictions on sports betting are well intentioned, fans continue to place bets on their favorite teams regardless,” Menendez said. “By bringing sports gaming into the light, states can collect much-needed revenue as well as protect against underground and dangerous operations.”
The New Jersey Thoroughbred Horsemen’s Association is also appealing the ruling and defending the New Jersey measure.
The cases are Christie v. NCAA, 16-476, and New Jersey Thoroughbred Horsemen’s Association v. NCAA, 16-477.