* Federal law blocks sports betting in most states
* Lower courts halted New Jersey sports gambling law (Recasts first paragraph, adds Christie and Breyer comments)
By Lawrence Hurley
WASHINGTON, Dec 4 (Reuters) - U.S. Supreme Court justices on Monday signaled a willingness to let New Jersey and potentially other states legalize sports betting, a lucrative source of revenue for state coffers that has been barred in most places.
The nine justices heard an hour-long argument in an appeal brought by outgoing Republican New Jersey Governor Chris Christie that aims to revive a 2014 state statute legalizing sports wagering. New Jersey’s measure, challenged by the biggest U.S. sports leagues as a threat to the integrity of competition, was struck down by lower courts as a violation of a federal law that prohibits most states from authorizing sports betting.
Christie, wearing a dark suit and a bright magenta tie, had a front row seat to the proceedings in the ornate courtroom.
“If we are successful here we could have bets being taken in New Jersey within two weeks of a decision by the court,” Christie told reporters after the argument. “We’re prepared in New Jersey. We’re ready to go.”
The law at issue would allow people age 21 and above to bet on sports at New Jersey casinos and racetracks, but would ban wagers on college teams based in or playing in the state. The ruling, due by the end of June, will likely come after Christie leaves office in January.
Chief Justice John Roberts and fellow conservative Justice Anthony Kennedy expressed skepticism about the restrictions that the federal law places on states. Liberal Justice Stephen Breyer also asked questions that indicated he could side with New Jersey. Some of the court’s liberals appeared less sympathetic to the state’s arguments.
New Jersey argued that a 1992 federal law, the Professional and Amateur Sports Protection Act, infringes upon state sovereignty as laid out in the U.S. Constitution by compelling states not to license or regulate sports betting.
That law effectively prohibits sports gambling in all states except Nevada and, to a limited extent, Delaware, Montana and Oregon by preventing them from lifting state bans on the practice.
Industry analysts predicted that upwards of 20 states would legalize sports betting if the federal law is voided. The current illegal sports betting market is worth billions of dollars annually, they estimated.
The conservative justices, who hold a majority on the court, often are sympathetic to arguments in favor of the assertion of the individual sovereignty of states at the expense of the federal government, a principle called federalism.
“It’s precisely what federalism is designed to prevent,” Kennedy said in reference to the 1992 law.
Kennedy’s forceful remarks suggested he believes that law is written in a way that unlawfully commandeers the states into carrying out federal policy.
Under the same theory, Roberts wondered whether the federal government could place limits on the amount of income tax that states collect. Roberts said such a law would implicate “the fundamental powers and prerogatives of a state to sort of function their own government.”
Liberal Justice Elena Kagan indicated she viewed the federal law as similar to measures passed routinely at the national level that regulate all kinds of commerce and prevent — preempt, in legal terminology — states from legislating on those issues.
“This sounds to me like the language of preemption,” Kagan said. Fellow liberal Sonia Sotomayor made similar remarks.
Breyer seemed to view the law as more akin as an unlawful exercise of federal power.
“That’s what this is about, telling states what to do, and therefore, it falls within commandeering,” Breyer said.
New Jersey’s sports gambling law was challenged by the National Football League, Major League Baseball, the National Basketball Association, the National Hockey League and the National Collegiate Athletic Association.
If the justices undercut or overturn the 1992 law, the court could set a precedent threatening other federal attempts to force states and cities to follow its lead on policy issues. That could include the Trump administration’s bid to crack down on so-called sanctuary cities that limit cooperation with the federal government on efforts to detain and deport immigrants who entered the country illegally.
Christie served as an advisor to President Donald Trump during the 2016 presidential race but was ousted as the head of Trump’s transition team after the election. Trump’s administration is on the opposite side of the case, opposing the New Jersey law championed by Christie.
Reporting by Lawrence Hurley; Additional reporting by Thomas Rowe; Editing by Will Dunham