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Indiana joins bid to upset prohibition against sports gambling

December 1, 2017

Eighteen states, including Indiana, have joined New Jersey at the United States Supreme Court in crying foul over a 25-year-old federal statute that prevents them from legalizing gambling on collegiate and professional basketball, football, baseball and other sporting events.   

The case, Governor Christopher J. Christie, et al. v. National Collegiate Athletic Association et al., calls into question the constitutionality of the Professional and Amateur Sports Protection Act of 1992. New Jersey charges the federal law violates the anti-commandeering doctrine, but the Indianapolis-based NCAA and other athletic groups counter the statute is not unconstitutional because it does not mandate the states to do anything. 

Matthew Johns, of counsel at Bingham Greenebaum Doll LLP in Indianapolis, noted just agreeing to hear the arguments could indicate the Supreme Court is favoring the Garden State in this contest and may strike down the PASPA. Such an upset would likely ripple beyond New Jersey’s borders and induce other states to allow sports wagering.

The Supreme Court will hear oral arguments Monday.     

Indiana Attorney General Curtis Hill, Jr., joined an amicus brief by West Virginia and 17 other states along with the governors of Kentucky, Maryland and North Dakota in support of Christie. In a statement from his office, Hill framed his decision to sign the brief as one asserting states’ rights.

“By limiting the involvement of the federal government in the internal affairs of states, the Tenth Amendment provides indispensable protections against all sorts of congressional mischief that otherwise would erode the rightful roles of state legislatures and agencies,” Hill stated in an email. “Even with this important bulwark in place, states continually must stand to defend their legitimate regulatory authority. That’s what New Jersey is doing, and that’s what we are supporting.”

Johns does not see anything unusual in Hill’s action even though Indiana’s top attorney is taking the side opposed by the NCAA.  

“I don’t view the state attorney general’s position to necessarily be contradictory to the NCAA,” Johns said, explaining the state is taking the stance that federal statutes much comply with the 10th Amendment. “This challenge is not directed at the NCAA.”    

The PASPA was enacted in 1992 by Congress to prevent the potential harm on sports by gambling. Capitol Hill noted the revenue from wagering on athletics could be substantial but the potential payout was not worth the risk gambling posed to the one of the nation’s popular pastimes.

The final bill prohibited all states, with the exception of Nevada, from sponsoring and operating their own sports-gambling schemes as well as from licensing or authorizing a third party to run a sports wagering program. It also contained a caveat for the handful of states that already had some form of sports gambling by exempting them from the PASPA prohibitions. In addition, it included a special provision that gave New Jersey one year to allow sports betting at the casinos in Atlantic City.

New Jersey did not take advantage of the year-long window and, instead, maintained its prohibition of sports gambling.

That changed in 2012 when the New Jersey Legislature passed a bill licensing casinos and racetracks to take bets on athletic contests. The Garden State claimed it was motivated to act because of the booming illegal gambling industry.

In response, the NCAA and several professional sports leagues filed a lawsuit, asserting the 2012 law violated the PASPA. New Jersey countered the PASPA was unconstitutional because, in mandating how states regulate gambling, the federal law ran afoul of the anti-commandeering doctrine.

The district court granted summary judgment to the sporting groups in the case now known as Christie I, and the 3rd Circuit Court of Appeals affirmed. While the majority of the appellate panel acknowledged constitutional problems with PASPA, it reasoned the federal law sidestepped such entanglement because it only prohibited the licensing or authorization of sports gambling. In fact, the majority noted, the PASPA did not prohibit New Jersey from repealing its ban on sports wagering.

In 2014, the New Jersey Legislature did just that. It passed a bill that repealed its sports wagering ban but the sporting groups again went to court on the grounds the new legislation was essentially authorizing gambling on athletic events.

Again, the 3rd Circuit panel and, later the entire court, in Christie II affirmed that the 2014 measure violated PASPA.

In its petition for a writ of certiorari, New Jersey argued the en banc decision from the 3rd Circuit contradicted its earlier decision in the first Christie lawsuit. “The majority thus reached the remarkable and unprecedented conclusion that the Constitution’s federal structure affords to Congress the power to prohibit States from repealing their own laws,” the petition stated.   

The Supreme Court has just two times in the last 55 years struck down federal legislation as violating the 10th Amendment’s anticommandeering doctrine. Those cases were New York v. United States, 505 U.S. 144 (1992) and Printz v. United States, 521 U.S. 898 (1997).

Johns believes a ruling by the justices in favor of New Jersey would be a “watershed decision.” It would be the first time the Supreme Court abolished federal legislation on anti-commandeering grounds even though the statute did not specifically require the states to act.

The NCAA echoes that point in its briefs to the Supreme Court. In part, the collegiate athletic association argued commandeering concerns arise only when Congress mandates states do the federal government’s bidding. With the PASPA, Congress is just prohibiting states from establishing sports-gambling operating.

The American Gaming Association has submitted an amicus brief supporting New Jersey and urging the Supreme Court to reverse the 3rd Circuit’s ruling. In particular, the AGA contended states are prevented by the PASPA from combatting the black markets for illegal sports gambling. It estimated Americans are illegally gambling $149 billion annually on sporting events and much of that revenue is going into the pockets of organized crime.  

Sara Slane, senior vice president of public affairs at the AGA asserted the PASPA is not stopping sports wagering nor protecting the integrity of athletic contests.

“Sports betting is taking place right now but it’s just happening illegally,” she said.

Moreover, allowing the betting windows to open in all states would not corrupt the sporting games or lead to players and coaches purposefully tanking. Slane pointed to Nevada as providing a model for other states to follow in how to license and regulate sports gambling.

Already, Slane said, 15 states are preparing to legalize sports betting in anticipation of the Supreme Court overturning PASPA. The AGA is bolstering its arguing for a repeal by citing an economic impact study completed by England-based Oxford Economics. For Indiana, the study concluded that allowing sports gambling at the states’ casinos would create 2,565 new jobs, bring an increase of $110.1 million in wages and pump up the GDP by $195.2 million.

Christie v. NCAA has been consolidated with New Jersey Thoroughbred Horsemen’s Association, Inc. v. National Collegiate Athletic Association. Oral arguments are scheduled to start at 11 a.m.

 

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