Federal appeals court grants New Jersey rehearing in sports betting case

A U.S. federal appeals court on Wednesday granted New Jersey's request for a rehearing in the state's three-year battle with the major professional and amateur sports leagues over legalized sports betting.

The Third Circuit Court of Appeals announced that the majority of active judges voted for a rehearing en banc and vacated its Aug. 25 ruling in favor of the NCAA, NFL and other major sports leagues.

The rehearing has not been scheduled and will be relisted at the court's convenience, according to Wednesday's filing. New Jersey Sen. Raymond Lesniak, who has spearheaded the state's fight to bring Las Vegas-style sports betting to its struggling casinos and racetracks, expects it will be a "few months" before the hearing takes place.

"We are glad that the ruling -- which robbed New Jersey of the opportunity to benefit from the billion-dollar sports betting industry - will be reconsidered and heard by the full court," New Jersey congressmen Frank Pallone and Frank LoBiando said in a statement.

"Not only do the citizens of New Jersey overwhelmingly support legalized sports betting and the revenue that would come to the state with it, but existing federal law picks winners and losers, and is unconstitutional and arbitrary. Several states can already operate sports betting, but New Jersey has been shut out despite the will of our citizens. We remain committed to seeing sports betting become legal in New Jersey, and this reconsideration is a positive and important development."

It's the latest development in a legal battle that dates back to 2012. New Jersey Gov. Chris Christie signed legislation in 2012 legalizing sports betting at the state's casinos and racetracks. The NFL, NBA, Major League Baseball, NHL and the NCAA sued the state in August 2012.

The leagues have won every ruling throughout the case, but the ruling Wednesday is considered a big win for New Jersey.

"It's huge," Lesniak said. "Chances are, they wouldn't have vacated the ruling if they were only going to later on confirm it."

The NFL declined comment. The NBA and Major League Baseball did not immediately return requests for comment.

Daniel Wallach, an attorney with Becker & Poliakoff who has followed the case closely, said it is procedural for a court to vacate a previous ruling when granting a rehearing. Wallach said he believes New Jersey is the favorite to prevail in the rehearing but does not expect legal sports betting to take place immediately after the decision.

"It would not open the floodgates for sports betting at New Jersey's casinos and racetracks," Wallach said. "It is my expectation that a New Jersey victory would be followed by a sports league's request for a stay. I'm not sure if the Third Circuit would grant the stay, but there's nothing to lose. I do think New Jersey is the favorite."

The August 2-1 majority ruling in favor of the leagues was the second time the Third Circuit has heard New Jersey's case. A conflict between the two rulings emerged and likely prompted the rehearing to be granted, according to legal sources.

"The court is very concerned about the consistency of its published opinions and is likely looking to resolve any conflicts between the two," Christopher Soriano, an attorney for Duane Morris who also has followed the case closely, told ESPN.

The Professional and Amateur Sports Protection Act of 1992 (PASPA) prohibits state-sponsored sports betting in all but four states: Nevada, Delaware, Oregon and Montana.

The NBA has called for Congress to create a federal framework that would allow states to adopt regulations and offer legal sports betting. In a letter published in The New York Times, NBA spokesman Mike Bass said, "Bringing sports betting into the mainstream would not undermine the integrity of sports. To the contrary, legalization would bring new tools and resources to monitor unusual betting activity and promote responsible gambling."