Brief attacks New Jersey’s main argument against PASPA
Advocates of repealing the federal ban on sports wagering are facing a setback after the acting U.S. solicitor general submitted a brief to the U.S. Supreme Court recommending the court reject hearing the state of New Jersey’s appeal of its case challenging the 1992 ban.
The case before the Supreme Court originated when New Jersey Governor Chris Christie signed a bill into law in 2014 that would establish a self-regulated program of sports betting run by Atlantic City casinos and racetracks. The New Jersey law would allow Atlantic City gaming halls to establish Nevada-style race and sports books with full wagering on single events, along with in-game prop bets.
It is New Jersey’s second try at skirting the federal sports-betting ban, established with the Professional and Amateur Sports Protection Act of 1992 (PASPA). New Jersey residents voted in 2011 to legalizing sports betting, and Christie signed sports betting into law a year later. Sports leagues led by the National Football League and National Collegiate Athletic Association sued to block the law, citing PASPA.
The courts sided with the sports leagues in that case, and the U.S. Supreme Court denied to hear the state’s appeal in 2013, affirming lower-case decisions that the law violated PASPA.
New Jersey state Senator Raymond Lesniak, though, promptly drafted a new bill, which would allow private casinos and racetracks to offer sports betting as long as the state didn’t sponsor or regulate it. It was fast-tracked in the legislature and signed into law by Christie in 2014. The sports leagues sued again, citing the federal ban. New Jersey’s appeals have been based on the same argument as the first case—that PASPA violates the states’ rights provisions in the 10th Amendment of the U.S. Constitution.
The courts have again sided with the leagues, including in an en banc review by the entire Third Circuit Court of Appeals. With the issue once again before the U.S. Supreme Court, sports-betting advocates led by the American Gaming Association are supporting the appeal while calling on the U.S. Congress to repeal PASPA.
The AGA’s position has been that the sports leagues’ position (softening among most league leaders outside of the NFL’s Roger Goodell) that sports betting threatens the integrity of sports is no longer valid, as all that the federal ban has done is to push sports betting underground, supporting illegal, unregulated wagering that in the end supports organized crime.
The courts, though, are focusing on the language of PASPA and of the 10th Amendment in the New Jersey appeal. In the past, the U.S. Supreme Court has granted appeals in the majority of cases where the solicitor general has recommended a hearing. However, last week’s brief from acting Solicitor General Jeffrey Wall—a new SG is one of the many positions in President Donald Trump’s administration awaiting nomination and confirmation—means the high court is likely to again reject the appeal. In the past, the court has accepted the SG’s recommendation 80 percent of the time.
Wall’s 30-page brief to the U.S. Supreme Court goes directly to New Jersey’s central argument, agreeing with lower-court rulings that PASPA does not violate the 10th Amendment:
“Section 3702(1) (the law resulting from PASPA) does not violate the 10th Amendment because it neither compels states to regulate according to federal standards nor requires state officials to administer federal law,” said the brief. Instead, Section 3702(1) prohibits states from operating sports-gambling schemes themselves or affirmatively licensing or authorizing private parties to do so.”
Wall also noted that the relevant portion of PASPA “does not obligate states to enact any law or to implement or administer any federal regulatory requirement.”
In recommending the Supreme Court pass on the appeal, Wall noted that no other states have passed a law challenging PASPA as New Jersey has done twice:
“Indeed, although PASPA has been on the books for a quarter century, it has apparently given rise to only a handful of suits, all in the Third Circuit.
“No other state has enacted legislation claimed to conflict with PASPA, and even petitioners’ amici states do not profess any desire to enact laws comparable to the 2014 Act. The absence of a conflict on the question presented and the paucity of PASPA litigation of any kind counsel against this Court’s review. …
“The limited practical consequences of the question presented confirm that this Court’s review is unwarranted.”
The AGA reacted quickly to the published brief, releasing a statement repeating its long-held position on the issue.
“The 25-year-old ban on sports betting is fueling a thriving $150 billion illegal gambling market that deprives states of revenue that could instead pay for vital public services, such as education, infrastructure and law enforcement,” the AGA statement said. “While the Supreme Court has yet to decide whether to hear New Jersey’s case to overturn the federal ban, the casino gaming industry is building a diverse coalition of stakeholders who will work with Congress and the Trump Administration to lift the unconstitutional ban on sports betting and give states the freedom to regulate this increasingly popular American pastime.”
The Supreme Court will decide whether to consider the sports betting appeal before the end of June. In the meantime, New Jersey lawmakers are looking at alternative routes to sports wagering—mainly, daily fantasy sports. Last week, the state Assembly approved a bill to legalize and regulate paid-entry fantasy sports, including DFS sites such as DraftKings and FanDuel. Lawmakers had been unwilling to pass a DFS measure while the sports betting case is pending, but could now pass DFS regulations that give Atlantic City casinos something as close to sports betting as possible.
There is also what is being called the potential “nuclear option”—repealing the state prohibition on sports betting to allow anyone to set up sports books in defiance of the federal law. Few expect New Jersey lawmakers to explore this option.
