The prospect of Vegas-style sports gambling in New Jersey now rests on the persuasiveness of a 45 page legal brief just filed with the U.S. Supreme Court.
In a petition dated February 12 but not publicly-released until Tuesday, lawyers for Governor Chris Christie formally asked the U.S. Supreme Court to review an adverse lower court ruling on the issue of whether New Jersey can offer sports wagering. The governor is requesting the Supreme Court to evaluate the constitutionality of the Professional and Amateur Sports Protection Act (“PASPA”), a 1992 federal law restricting certain forms of sports betting to Nevada, Delaware, Oregon, and Montana.
The underlying PASPA lawsuit was filed on August 7, 2012 by the NCAA and all four major U.S.-based professional sports leagues – the NFL, NBA, MLB, and NHL. The plaintiffs’ complaint seeks to prevent the implementation of a new law that New Jersey voters approved by a 2-to-1 margin in November 2011. New Jersey’s yet-to-be-applied law would allow regulated sports gambling in the state, but specifically exempts NJ-based colleges. In other words, bettors would not be able to wager on Rutgers football games or Princeton basketball contests.
The new legal filing, formally titled a “petition for a writ of certiorari,” makes two key claims. First, the brief argues that individual states, not the federal government, should regulate sports gambling. The filing describes this as a violation of the Constitution’s anti-commandeering principle. Second, the state posits that PASPA’s discrimination between states on sports gambling grounds is unlawful. The brief cites the equal sovereignty principle for this prong of its argument.
Stripped of legalese, Governor Christie is essentially saying that: (i) New Jersey, like Nevada, should decide for itself whether it should offer regulated sports gambling; (ii) the federal government should stay out of such decision; and (iii) Congress should treat all the states the same on the issue of sports gambling.
In addition to dense legal arguments, the petition also contains a quasi-snarky comment in the footnotes. Footnote No. 3 was added to support New Jersey’s contention that the sports leagues are being disingenuous on the issue of whether they are injured by sports gambling. The footnote reads:
“For years, the NHL, NBA, and MLB have located teams in Canada, where sports wagering is legal. The NBA hosted its 2007 All-Star Game in Las Vegas, and the NCAA has allowed [multiple conferences] to hold championship games in Las Vegas. The NFL has also hosted a game in London, which has legalized sports wagering, each year since 2007” (p. 8-9).
The stakes in the case are high. New Jersey’s desire to offer sports wagering in its regulated casinos and horse tracks is largely motivated by two factors – money and fairness.
The state sees a robust sports gambling industry as one that that would bring in millions of dollars in tax revenue. They forecast an increase in tourism as well. Visitors in Atlantic City keen to place a sports wager also eat, shop, and stay in hotels. After spending some time in their favorite sports book, they also may wander over to other parts of the casino and play table games or slot machines.
On the fairness issue, New Jersey fails to see how PASPA can explicitly allow sports gambling in a small number of states and ban the activity in all others. Could Congress restrict apple sales to Washington State? Peaches to Georgia? Potatoes to Idaho? To date, New Jersey’s legal arguments on this point have failed. But they aren’t alone – Georgia, Kansas, Virginia, and West Virginia filed a legal brief in support of New Jersey on this point.
Adding intrigue, the lawsuit pits two former Solicitor Generals for President George W. Bush against each other. Ted Olson is representing Governor Christie. Paul Clement is counsel for the sports league plaintiff quintet. Their presence underscores the important legal issues inherent in the case. Attorney General Eric Holder has also intervened in the lawsuit, with the Department of Justice opting in several months after the original plaintiffs brought the lawsuit.
The current filing follows a string of courtroom losses for the governor. The most notable include Judge Shipp’s ruling on February 28, 2013 finding PASPA to be a constitutional exercise of Congressional power on various bases. In addition, a three judge panel of the U.S. Court of Appeals for the Third Circuit ruled against New Jersey on September 17, 2013 in a split decision. Judge Feuntes penned the 2-1 majority decision over the course of 100+ pages and decreed: “we hold that nothing in PASPA violates the U.S. Constitution” (p. 105).
Why are the NCAA and the four professional sports leagues opposed to sports gambling in New Jersey? There are three main reasons. First, the status quo is lucrative. The value of teams, licensing fees, and broadcasting rights has steadily increased for decades. Expanded sports wagering brings in a possible unknown. Second, the current lawsuit provides the leagues with a vehicle to strengthen intellectual property rights when it comes to ownership of data. Third, sports leagues have historically been opposed to sports gambling on integrity-related grounds. Pete Rose and ex-NBA referee Tim Donaghy both come to mind in this regard. From NFL commissioner Roger Goodell’s declaration filed in the case:
“The spread of sport betting, including the introduction of sports betting as proposed by the state of New Jersey, threatens to damage irreparably the integrity of, and public confidence in, NFL football. An increase in state-sponsored sports betting would wrongly and unfairly engender suspicion and cynicism toward every on-the-field NFL event that affects the betting line” (p. 2).
Review of the case by the Supreme Court is discretionary. The so-called “rule of four” attaches, requiring at least four of the nine Supreme Court justices to agree to hear the case. It will take months before the nation’s highest court decides whether it will even hear the case. The Supreme Court receives thousands of petitions seeking review every year. Only about 1% of them are ultimately accepted.
Those are long odds for Governor Christie.
Ryan M. Rodenberg (@sportslawprof) works as an assistant professor of sports law analytics at Florida State University. His new co-authored academic article about legal issues in sports gambling can be found here.