Legal Sports Betting Coming to a State Near You Soon?

On April 30, 2017, in SELS Blog, by Matthew Weiss

By: Pat Coyne*

With the recent announcement that the Oakland Raiders will be re-locating to Las Vegas in 2020, a notion that has long seemed inevitable is now becoming a reality: major professional sports leagues will call Las Vegas “home”.[1] The Raiders join the “Vegas Golden Knights,” who were added to an NHL as an expansion team on March 1st,[2] and became the first of the four major pro sports teams to be located in the city.[3]

The Golden Knights will begin playing in Las Vegas next season,[4] and the Raiders will follow suit in coming years, opening up their new, $1.9 billion-dollar stadium for the 2020 NFL season.[5] Big change is on the horizon in “Sin City,” a destination built on its tourist industry, resorts, night life, and, of course, its casinos. Since 1984, roughly $77 billion has been bet on sports in Nevada,[6] and in 2016 casinos on the Las Vegas Strip made almost $70 million in revenue from their sports books alone.[7] It is no secret: two out of the four major sports leagues are entering the only market where sports betting is entirely legal, and the reality that Americans gamble on sports can no longer be ignored by the leagues.

This begs the question: What is the current state of legal sports gambling in America, where can it be expected to go in the coming years, and how might the leagues react along the way?

Ultimately, the answer will probably not come from Las Vegas itself, but rather from New Jersey, where a battle to legalize sports gambling there has been taking place for the last five years, and may see a resolution in the coming months. Three pieces of legislation make up the core of sports gambling regulation in the United States. The Interstate Wire Act of 1961,[8] the Professional and Amateur Sports Protection Act of 1992 (PASPA),[9] and the Unlawful Internet Gambling Enforcement Act of 2006 (UIEGA).[10] PASPA is by far the most broad and prohibitive of the three statutes and essentially banned any form of sports betting nationwide, only making exceptions in a limited number of states that had some form of sports betting in place prior to the passage of the Act.[11] New Jersey was one of the states exempted under PASPA, but was only given one year from the passage of the Act to put its proposed sports betting plan into place and did not meet the deadline.[12] Sports betting has remained illegal in New Jersey and virtually every other state besides Nevada, since 1992.

For the past five years, however, New Jersey has been trying to change that. In 2012, Governor Chris Christie signed a bill into law that permitted wagering at casinos and racetracks on certain professional and collegiate sports.[13] The bill was immediately challenged by the NCAA, NFL, NBA, NHL, and the MLB to block it from being enacted, and on appeal from the United States District Court for the District of New Jersey the Third Circuit Court of Appeals held in favor of the leagues.[14] The court struck down the New Jersey law and held that PASPA was within Congress’s power under the Commerce Clause, that it did not violate the anti-commandeering principal, and that it was not invalid under the doctrine of equal sovereignty.[15]

The decision was not a death-knell for legal sports betting in New Jersey, however. In its opinion, the court of appeals stated that: “Just as PASPA once gave New Jersey preferential treatment in the context of gambling on sports, Congress may again choose to do so or, more broadly, may choose to undo PASPA altogether.”[16] Crucially for New Jersey, though, the court left the door open for further action in its efforts to show that PASPA was unconstitutional for commandeering. The court stated that: “We do not read PASPA to prohibit New Jersey from repealing its ban on sports wagering. . . . Nothing in [the words of PASPA] requires that the states keep any laws in place. All that is prohibited is the issuance of gambling “license[s]” or the affirmative “authoriz[ation] by law” of gambling schemes.[17]

The United States Supreme Court denied certiorari after New Jersey appealed the Third Circuit’s ruling, but the legal battle was only just beginning.[18]

In October of 2014, Governor Christie Signed Senate Bill 2460 into law, repealing portions of its sports gambling regulation at casinos and racetracks, and effectively permitting sports betting at willing casinos and racetracks for anyone over the age of 21.[22] The Third Circuit had left this possibility open to New Jersey and indicated that it could be a way around PASPA, but the new law was challenged by the same parties from 2013.[23] At the district level, the court found that New Jersey’s law violated PASPA, and entered summary judgment in the leagues’ favor, issuing a permanent injunction to prevent the law from being given effect.[24] On appeal, the Third Circuit affirmed the decision, however, New Jersey was given a rehearing en banc, a rare occurrence in which the entire circuit rules on the case, but judgment was affirmed and the state lost again.[25]

In its decision, the court ruled that the 2014 law violates PASPA because it authorizes sports betting by law.[26] Key to the court’s decision was that the law permitted sports betting at casinos and racetracks where it would otherwise be illegal, and selectively dictated where sports gambling may occur, who may place bets, and what they may be placed on. [27]

To date, New Jersey has passed two different laws that have lost before the court of appeals three different times. But its fight is still not over. New Jersey has appealed to the United States Supreme Court once again, and this time its chances of being granted cert look better than the first time around.

On Tuesday, January 17 of this year, the Supreme Court denied cert to 76 pending cases, and denied three other motions. It invited the acting solicitor general to file a brief expressing the views of the United States on just two cases: Christie, Gov. of NJ, et al. v. NCAA, et al., and NJ Thoroughbred Horsemen v. NCAA, et al. For New Jersey, its dreams of legal sports betting and the possibility it will aid its struggling economy live on for now.

If the Supreme Court is seeking to be briefed on the matter, that means that it has some interest in the case and that something about it, possibly the flip-flopping by the Third Circuit on whether PASPA commandeers, could warrant its highly valuable attention.

That a brief has been invited by no means indicates cert will be granted; but if the Court did not want to hear the case, and knew that already, it could have denied cert as it did to so many other cases that day. Whatever happens, there is no deadline for the federal government to file its brief and it likely will not come for months, meaning that the case, if granted cert, will not be heard until next the next term, sometime in the fall, at the earliest.

Why would the Court want to hear this case in particular, then? It is nearly impossible to tell how or why the Court will grant cert to some cases and not others, but perhaps the Court will want to clarify whether PASPA violates the principles of anti-commandeering before other states move farther forward on their own challenges to PASPA.


*Staff Writer, Villanova University Sports Law Society Blog; J.D. Candidate, May 2019, Villanova University Charles Widger School of Law.

[1] See Dylan Byers & Jill Disis, NFL approves Raiders’ move to Las Vegas, CNN Money (March 27, 2017), http://money.cnn.com/2017/03/27/news/nfl-raiders-las-vegas-move/.

[2] See Mike Coppinger, Vegas Golden Knights Officially Join NHL, USA Today Sports,(March 1, 2017), https://www.usatoday.com/story/sports/nhl/2017/03/01/vegas-golden-knights-officially-join-nhl/98596746/ (the addition of new Golden Knights will give NHL 31 teams, plus “expansion draft” in June to fill roster).

[3] See, e.g., NBA Media Ventures, NBA History in Las Vegas, NBA.com (last visited Apr. 22, 2017) http://www.nba.com/allstar2007/thomas_mack.html (noting that Utah Jazz played 11 home games in Las Vegas during the 1983–84 season).

[4] See Coppinger, supra note 2.

[5] See Byers & Disis, supra note 1

[6] See David G. Schwartz, Nevada Sports Betting Totals: 1984–2016, UNLV Ctr. for Gaming Res., 3 (2017), http://gaming.unlv.edu/reports/NV_sportsbetting.pdf.

[7] See David G. Schwartz, Trends for Big Las Vegas Strip Casinos, 2010–2016, UNLV Ctr. for Gaming Res., 2 (2017), http://gaming.unlv.edu/reports/bigstripcasinotrends.pdf.

[8]  See 18 U.S.C.A. § 1084 (West 1961) (prohibiting engaging in the business of betting or wagering through wire communication); see also In re Mastercard Intern. Inc., 313 F.3d 257 (5th Cir. 2002) (holding that statute only applied to sports betting).

[9] See 28 U.S.C.A. § 3702 (West 1992) (making it unlawful for “a governmental entity or a person to sponsor, operate, or authorize by law or compact a lottery, sweepstakes, or other betting, gambling, or wagering scheme, directly or indirectly, on one or more competitive games in which amateur or professional athletes participate, or are intended to participate”).

[10] See 31 U.S.C.A. § 5363 (West 2006) (prohibiting any person in business of betting or wagering from accepting credit, electronic fund transfer, or any other proceeds in connection with the participation of another person).

[11] See John T. Holden, Sports Gambling Regulation and Your Grandfather (clause), 26 Stan.L.& Pol’y Rev. 1, 4 (2014) (stating that Oregon, Delaware, Nevada, and Montana were exceptions; today only Nevada has fully legal sports betting, while other states were able to retain forms of sports-lotteries).

[12] See 28 U.S.C.A. § 3702.

[13] See N.J. Stat. Ann. §§ 5:12A-1–4 (West 2012).

[14] See Nat’l Collegiate Athletic Ass’n v. Governor of N.J., 730 F.3d 208 (3rd Cir. 2013).

[15] See id.

[16] Id. at 240–41.

[17] See id. at 232. The court continued to explain that it does not see how having no law in place governing sports is the same as authorizing it by law and that the lack of an affirmative prohibition of an activity does not mean it is affirmatively authorized by law. By indicating that Congress amending or repealing PASPA as another solution for New Jersey, the court essentially “punted” on the issue.

[18] See Christopher Baxter, Sports Betting at N.J. Casinos, Racetracks Will Not be Prosecuted, Acting AG Says, NJ.com (September 8, 2014), http://www.nj.com/politics/index.ssf/2014/09/nj_casinos_racetracks_will_not_be_held_liable_for_sports_betting.html.

[19] See id.

[20] See id. Governor Christie said that this was done because “ignoring federal law, rather than working to reform federal standards, is counter to our democratic traditions and inconsistent with the Constitutional values I have sworn to defend and protect.”  See id.

[21] See id.

[22] See N.J. Stat. Ann. §§ 5:12A-7 (West 2014) (repealing certain sports wagering provisions as applicable to casinos or gambling houses or running or harness horse racetracks).

[23] See Nat’l Collegiate Athletic Ass’n v. Governor of N.J., 832 F.3d 389 (3rd Cir. 2016), briefing required, 580 U.S. 1 (2017).  In its opinion, the Third Circuit stated that the District Court interpreted Christie I as holding that PASPA offers two choices to states: maintaining prohibitions on sports gambling or completely repealing them, and that the 2014 Law is not in line with PASPA because it is only a partial repeal, rather than a total repeal.

[24] See id.

[25] See id.

[26] See id.

[27] See id. The court also rejected the reasoning from Christie I that repeal cannot constitute authorization, and that District Court’s conclusion that PASPA presents states with a binary choice—either maintain a complete prohibition on sports wagering or wholly repeal state prohibitions, as dicta. This reasoning was part of a central, hardline stance that PASPA does not run afoul of anti-commandeering principles.

[28] See Nat’l Collegiate Athletic Ass’n, 832 F.3d 389, briefing required, 580 U.S. 1 (2017) (noting that latter is separate, but likely companion case to Christie if cert. is to be granted).

[29] See Amy Howe, No New Grants, but a Significant CVSG, SCOTUSblog, (Jan. 17, 2017), http://www.scotusblog.com/2017/01/no-new-grants-significant-cvsg/.

[30] See Dustin Gouker, Maryland Becomes Latest State to Eye Legal Sports Betting With New Bill, Leg. Sports Rep., (Feb. 9, 2017), http://www.legalsportsreport.com/13029/maryland-sports-betting-bill/. (noting that Maryland, New York, Michigan, Mississippi, Hawaii, and South Carolina are all states that have begun efforts that express interest in legal sports betting).

[31] The United States Supreme Court, The Justices’ Case Load (last visited Apr. 22, 2017), https://www.supremecourt.gov/about/justicecaseload.pdf.

 

Comments are closed.



Sports Law Publications

From the newest issues of the Jeffrey S. Moorad Sports Law Journal to insightful books by Villanova Law Faculty, there’s something for everyone. View...

Annual Jeffrey S. Moorad Sports Law Symposium

Every Spring, the Jeffrey S. Moorad Sports Law Journal holds its annual symposium on current issues and hot topics in the world of sports law. Past Symposia have covered issues with concussions in sports, agent representation, and more. Check back in the Spring for more information on the next symposium.

Events

Be sure to keep up with Sports Law events at Villanova School of Law and other Philadelphia-area law schools on our events page. View...