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Judges skeptical of New Jersey sports betting bid

Chris Christie and New Jersey's hope for legalized sports betting appear to have taken a hit. AP Photo/Matt Rourke

New Jersey wants to allow its racetracks and casinos to offer legal, Las Vegas-style sports betting. The NCAA, NFL, NBA, NHL and Major League Baseball, along with the United States Department of Justice, are trying to stop it.

The two sides squared off once again Wednesday in federal appeals court in Philadelphia. After just over an hour of legal sparring, the consensus coming out of the packed courtroom was that the leagues likely will prevail.

A decision from the 12-judge panel of the 3rd Circuit Court of Appeals isn't expected for several months, and even then, this case, which dates back to 2012, might not be over.

New Jersey entered Wednesday's oral arguments hoping to come away with, at minimum, a blueprint on how it could offer sports betting and comply with the Professional and Amateur Sports Protection Act (PASPA), a 25-year-old federal statute that prohibits state-sponsored sports betting in all but a handful of states; Nevada is the only one allowed to offering wagering on single games.

New Jersey lead attorney, former U.S. Solicitor General Ted Olson, argued that PASPA is unconstitutional because it commandeers the state to enforce the prohibition. The leagues' lead attorney, former U.S. Solicitor General Paul Clement, countered by saying the state is not required to even maintain its laws banning sports betting.

Olson said that's exactly what the state is attempting to accomplish with its latest effort, the 2014 Sports Wagering Law, but only at racetracks and casinos. Based on their pointed questioning and skeptical tone and gestures, the majority of judges looking down on Olson from the bench didn't seem to buy it.

"So if you say it directly, it violates PASPA, but if you pass a broader law and then do a partial repeal that lands you in the exact same place, you don't violate PASPA?" Judge Thomas Hardiman asked.

The questioning directed at New Jersey's side tempered the confidence of even the state's most outspoken proponents.

"It's a squeaker," New Jersey Sen. Raymond Lesniak said after the hearing. "I think we're headed to federal regulation, which is fine."

Lesniak added that the state would not appeal to the U.S. Supreme Court if it lost. Two U.S. Congressmen from New Jersey -- Rep. Frank Pallone and Rep. Frank LoBiondo -- have introduced sports betting bills in Congress, but neither has gained any traction.

"As we have reiterated time and time again -- the existing federal law is unconstitutional and arbitrary; it picks winners and losers, while continuing to deny New Jerseyans the right to participate in this billion-dollar industry," Pallone and LoBiondo said in a joint statement released after Wednesday's hearing. "We are hopeful that today's hearing signals the start of a new era in our state, and we intend to see this fight through to the end."

There has been a groundswell of interest in legalizing sports betting, with even NBA commissioner Adam Silver suggesting that the underground market estimated to be worth hundreds of billions of dollars be "brought into the light" and regulated at a federal level. (The NBA remains opposed to New Jersey's efforts, because it believes a federal approach will be more effective.)

The interest in the New Jersey case was evident from the standing-room-only crowd in the Ceremonial Courtroom at the 3rd Circuit. A line of a few dozen people formed hours before the hearing kicked off at 11 a.m. ET. Court security officials working the area said the number of people waiting to get in was unusual.

"The momentum for legalization is hard to deny," Joe Asher, CEO of William Hill's Nevada sportsbook, said after the hearing.

But unless New Jersey pulls the upset, it appears we're years, not months, away from expanded legal sports betting in the U.S. Meanwhile, illegal sports betting continues across the country.

Outside of the downtown courthouse, a man at one of the surrounding retail stores wasn't aware of what was at stake across the street, but said he knew how to place a bet. Asked how long it would take him, he said, "One call."