The NFL’s Argument That Sports Betting Causes Harm Is Wearing Thin

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hacheman@therx.com
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The NFL’s Argument That Sports Betting Causes Harm Is Wearing Thin

Daniel Wallach, April 11, 2017

The National Football League’s longstanding opposition to expanded legal sports betting has been branded (correctly) in many quarters as “hypocritical.”

The backstory on the NFL and sports betting

Critics point to the league’s endorsement of daily fantasy sports — arguably a form of sports gambling — and its scheduling of annual games in London (where sports betting is legal) — as indicative of the leagues’ hypocrisy on the issue.

The NFL’s green-lighting of the Oakland Raiders to Las Vegas is just the latest example of how the league’s publicly stated opposition is often belied by its contradictory actions.

And, of course, let’s not overlook the fact that several NFL owners have an ownership stake in a leading daily fantasy sports company — Robert Kraft and Jerry Jones are investors in DraftKings through their other businesses. One prominent NFL family — the Rooneysowns a Florida racetrack (the Palm Beach Kennel Club), which is looking to expand its gambling footprint in Florida. The list goes on and on.


“Unclean hands” argument not a winning hand so far

But “hypocrisy” has not proven to be legally meaningful in a court of law — at least not yet.
In the litigation in the New Jersey sports betting case, New Jersey’s lawyers argued that the leagues’ embrace of DFS and hosting of games in London should prevent the leagues from enforcing the Professional and Amateur Sports Protection Act (PASPA). That’s the 1992 federal law that bans state-sanctioned sports betting.

The specific legal argument that New Jersey invoked to exploit the leagues’ hypocrisy on sports gambling was the “unclean hands” doctrine. That’s a legal principle that bars the entry of equitable relief — the leagues were seeking a permanent injunction, a form of equitable relief — where the parties seeking such relief are themselves guilty of “inequitable” or “unlawful” conduct.


The argument from New Jersey

As New Jersey argued in Christie II, “the Leagues are essentially hypocrites because they encourage and profit from sports betting” by scheduling games in London and Las Vegas, where sports gambling is legal, and by “sanction[ing] and encourage[ing] fantasy sports betting” (or DFSB™, as William Hill US CEO Joe Asher famously coined it).

Unfortunately for New Jersey, the Third Circuit U.S. Court of Appeals (the court which decided Christie II) rejected this argument. In the court’s view, the leagues’ actions did not involve the type of “unconscionable” conduct necessary for an “unclean hands” argument to succeed. Further, it was not “immediately related” to the type of sports betting that the leagues were trying to stop.

In other words, the court viewed the leagues’ association with DFS and legal sports betting as not reprehensible enough — or closely related to the type of unregulated sports betting that New Jersey was attempting to legalize — to trigger the unclean hands doctrine.
But this ruling does not necessarily foreclose future legal challenges targeting the leagues’ hypocritical stance against sports betting. The “unclean hands” argument can still be revived in other judicial settings — bolstered by some of the more recent gambling entanglements involving the leagues — perhaps finding the sweet spot in future cases.

But there is one other oft-overlooked argument that states could successfully employ to penetrate the leagues’ shaky hypocrisy fortress in a more legally meaningful (and effective) way: the doctrine of “irreparable harm.”


Lack of irreparable harm is the way to go

In my view, a more optimal approach for highlighting the leagues’ hypocrisy on sports gambling. It also strategically shifts the burden of proof onto the leagues. (That differs the “unclean hands” defense which must be proven by the state challenger to PASPA). The goal: Arguing that the leagues would not be “irreparably harmed” by state-promoted sports betting.

“Irreparable harm” is a legal concept that arises in the context of a motion for preliminary injunction. It’s a litigation device where one party (usually the plaintiff) asks the court — typically at the beginning of the lawsuit — to preserve the status quo for the duration of the case. That’s accomplished by entering an order enjoining (preventing) the other party — usually the defendant — from engaging in the conduct that is directly at issue in the litigation.

“Irreparable harm” refers to the harm that might occur if the preliminary injunction is not granted. It has been described as the type of harm that cannot be redressed adequately by money damages.


A preliminary injunction?

A party seeking a preliminary injunction (or a temporary restraining order, which often precedes a request for a preliminary injunction) must prove immediate and actual “irreparable harm.” It must also show that it would be “substantially likely to succeed” on the merits if the case were to proceed to a final judgment.

(The plaintiff must also show that the harm it would suffer without an injunction “outweighs” the harm that the defendant would incur if a preliminary injunction were entered, and that it would be “in the public interest” to impose such relief).

A preliminary injunction is considered an extraordinary remedy under the law because it temporarily provides the moving party with virtually all of the relief that it seeks before the actual merits of the case have been fully litigated. Such a ruling also represents a key turning point in any litigation because it “signals” the court’s views on the merits of a lawsuit at a relatively early stage of the case.

This is because, as noted, the party requesting the entry of a preliminary injunction must establish — in addition to showing “irreparable harm” — that it is “substantially likely to prevail” on the merits of the lawsuit. Thus, in ruling on a motion for preliminary injunction, the court is essentially “telegraphing” how it would likely decide the case — long before a trial has occurred. For this reason, the outcome of a motion for a preliminary injunction (or a temporary restraining order) can be a game-changer — for both sides.


Application to New Jersey

This remedial device has proven to be a powerful tool for the major US sports leagues in blocking New Jersey’s efforts to legalize sports betting.
In the recent Christie II case, the leagues were able to obtain a temporary restraining order (which is similar to a preliminary injunction). The successfully argued that their “irreparable harm” stemmed from “the negative effect” that state-sanctioned sports gambling “would have upon the perception of the[ir] games and their relationship with their fans.” In doing so, they cited the Third Circuit’s recognition in Christie Ithat “there is a proven ‘stigmatizing effect’ of having sporting contests associated with gambling.”

The leagues claimed that this “stigmatizing effect . . . is by its very nature irreparable.” The district court agreed, and granted the leagues’ motion for a temporary restraining order. That was later converted into a permanent injunction when the district court entered final summary judgment in favor of the leagues.

Changing the game for NJ sports betting?

But consider the alternative for a moment. What if New Jersey had been able to successfully negate the element of “irreparable harm” and thereby avoid a TRO or preliminary injunction?

In that scenario, New Jersey would have been able to offer sports betting at its casinos and racetracks right away without having to wait for the final resolution of the case on the merits. This would have been a historic achievement, resulting in New Jersey becoming the first state outside of Nevada to offer single-game sports betting — at least for the duration of the lawsuit.

Avoiding a preliminary injunction would have also enabled New Jersey to take fact discovery in the case. That would include the depositions of the sports league commissioners, in an effort to bolster its “unclean hands” defense and other potential arguments entered on the leagues’ hypocritical stance on sports betting.

For example, New Jersey’s lawyers could have examined the various commissioners or their surrogates about the leagues’ licensing of their “real-time” data to overseas sports betting operators. That arrangement highlights the leagues’ participation in — and direct benefit from — the wagering that takes place on their games.

Additionally, New Jersey could have explored the leagues’ “selective enforcement” of PASPA. To wit, they fail to object to state DFS laws which arguably violate PASPA (see here and here for my analysis of that issue), while steadfastly opposing New Jersey’s efforts to legalize sports betting.
Avoiding a preliminary injunction — through rebutting the element of “irreparable harm” — might have presented New Jersey with an avenue for ultimately overcoming PASPA.

Next: How the leagues’ recent statements and actions undermine the idea of “irreparable harm.”
 

hacheman@therx.com
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The NFL’s Move To Las Vegas May Be The Death Knell For ‘Irreparable Harm’ Argument Against Sports Betting

Betting

Daniel Wallach, April 12, 2017

The issue of “irreparable harm” (and, to a lesser extent, the related doctrine of “standing,” as highlighted in an article by the staff of Legal Sports Report) could emerge as a key battleground in future cases involving US sports betting.

Recent developments — consisting mainly of the leagues’ own words and actions — have, in my view, undermined any potential claim by the leagues that they would suffer irreparable harm from state-sponsored sports betting. (Remember, “no irreparable harm” means “no preliminary injunction.”

What the leagues are doing on sports betting

That could leave the leagues powerless to stop sports betting while a potential lawsuit plays out over several years, including appeals). It could also potentially negate the leagues’ “standing” to enforce PASPA (the federal prohibition on sports betting) in court.
Through their words, the major US sports leagues have slowly begun to embrace the possibility of expanded legal sports betting. This would certainly be the first line of attack against any claim by the leagues that they would be “irreparably harmed” by activity that they now appear poised to endorse.


The NBA

Along those lines, the recent statements by league commissioners would be fair game. Exhibit “A” in this approach, of course, would be NBA Commissioner Adam Silver’s New York Times op-ed in 2014 calling for the legalization and regulation of sports betting. Silver’s piece recedes from the NBA’s longstanding opposition to sports betting.

He acknowledges the obvious — that PASPA does done little to stop the spread of sports gambling in this country. It has only achieved the shifting of such activity to illegal markets, where it is untaxed, unregulated and bereft of any consumer protections.

Significantly, Silver’s pp-ed also appears to contradict any notion that there is a “stigmatizing effect” resulting from the fusion of sporting events and gambling. That argument was the cornerstone of the leagues’ “irreparable harm” argument in both the Christie I and Christie II cases in New Jersey.
Signaling that “[t]imes have changed” since the enactment of PASPA in 1992, Silver’s op-ed points to the increased public acceptance of gambling. Silver characterizes it as “a popular and accepted form of entertainment in the United States,” noting that most states now offer lotteries, over half have casinos, and three states (e.g., New Jersey, Delaware and Nevada) “have approved some form of Internet gambling, with others poised to follow.”


Dissonance from the NBA

These refreshingly candid comments — which conclude with a call for Congress “to adopt a federal framework that allows states to authorize betting on professional sports” — break sharply with the leagues’ courtroom narrative advanced just one month earlier. (The leagues filed their last brief, citing the “stigmatizing effect” of mixing sporting contests and gambling in October 2014. Silver’s piece ran in the New York Times on November 13, 2014, coincidentally— or not —one day after the NBA announced that it would become an investor in daily fantasy sports site FanDuel.)
Silver’s comments alone aren’t enough to crack the dike. After all, he is just one of five sports league commissioners represented in the Christie case. But his bold stance (albeit with no follow-up action) has lured other league commissioners into this debate, leading to even more contradictory statements.


Major League Baseball

In the nearly two-and-a-half years since Silver’s op-ed was published, the other pro sports league commissioners (and several team owners) have weighed in at various junctures with revealing comments that further lay waste to the leagues’ “irreparable harm” argument. They have either indicating support for repealing or modifying PASPA, or by insinuating that gambling on sporting events is an exaggerated problem or not a serious problem at all.

Among the other league commissioners, Major League Baseball’s Rob Manfred appears to be the most outwardly supportive of Silver’s proposal. In response to a question at the 2015 MIT Sports Analytics Conference, Manfred said that the federal regulation of sports betting “seems like a pretty good idea” to him.

Manfred’s more recent comments go even further:

  • During a February 2017 interview with Yahoo Finance, Manfred said that MLB was “reexamining [its] stance on gambling. It’s a conversation that’s ongoing with the owners.” Manfred acknowledged during that sit-down with Yahoo’s Daniel Roberts that betting on the games “can be a form of fan engagement, it can fuel the popularity of the sport. We all understand that.”
  • Less than month later, Manfred took another quantum leap forward on the issue, declaring that MLB “is ready to join in what I think is going to be a dialogue about how sports gambling regulation in the United States should be changed.”


MLB takes it even further

But it’s Manfred’s other statements that may have done untold harm to the leagues’ “irreparable harm” argument.
In an interview with Fox Business last month, Manfred rejected the notion that there was any “stigma” associated with placing a team in the Las Vegas market. He said that “[w]e’re past the stigma, as you put it, associated with Las Vegas.” He reasoned that “[t]he fact of the matter is, people can gamble even on sports wherever they want to, we know that. It’s a fact that we all live with.”

This comment, in particular, would seem to completely contradict MLB’s prior assertion in Christie II that there is a “proven ‘stigmatizing effect’ of having sporting contests associated with gambling.” Consider the stigma officially removed, and with it MLB’s ability to credibly maintain “irreparable harm” on that basis.


The NHL

Manfred’s hockey counterpart, NHL Commissioner Gary Bettman, has been somewhat more circumspect about the league’s position, insisting that hockey “doesn’t lend itself to gambling in the same way that football and basketball do.”

But even that statement would seemingly belie any future claim by the NHL — in legal filings— that it would be “irreparably harmed” by state-regulated sports betting. The NHL, of course, is putting a team in Las Vegas.

The NFL

However, the National Football League — the sport garnering the largest amount of illegal wagering activity in the US — remains vehemently opposed to changing the federal law.

At an NFL owners meeting in October 2016, Commissioner Roger Goodell declared that the league “remains very much opposed to legalized gambling on sports.” In a more recent interview, Goodell reiterated that the NFL “still strongly oppose legalized sports gambling,” adding that “[t]he integrity of our game is number one. We will not compromise on that.”

But cracks in the league’s publicly stated position are starting to emerge. The owners of two NFL teams — who are essentially Goodell’s employers — have seemingly contradicted the league’s public stance against sports betting

The owner of one AFC team recently told SI’s Albert Breer that it’s “a joke to even say” that wagering on the league’s games would be a problem, characterizing it as an “issue decades ago.” The unnamed AFC team owner insisted that “sports gambling is going to be legal. We might as well embrace it and become part of the solution, rather than fight it. It’s in everybody’s best interests for it to be above-board.”
Just as revealingly, another team owner (from the NFC) confided to Breer that the league’s concern about sports betting “is not 100 percent put to bed, but it’s relatively put to bed just because of technology today.”


Hurting the NFL’s case

With statements like these, the ability of the NFL to assert “irreparable harm” an essential element of a preliminary injunction — in future cases becomes severely compromised.

Courts often rely on a plaintiff’s out-of-court statements — even those that would otherwise constitute inadmissible “hearsay” evidence — to negate the element of “irreparable harm” and deny a party’s motion for a preliminary injunction. See Johnson v. Couturier, 572 F.3d 1067, 1083 (9th Cir. 2009) (“A district court may . . . consider hearsay in deciding whether to issue a preliminary injunction.”).

No doubt the lawyers in the New Jersey sports betting case are working overtime trying to keep tabs on the league’s contradictory positions. So too, likely, are lawyers representing other potential state challengers — and there may be several of those soon enough (West Virginia is one intriguing possibility. See here, here and here).

The NFL’s move to Vegas is important to any sports betting case

But it’s the NFL’s actions that truly expose the fallacy of its publicly stated opposition to sports betting, They severely weaken (if not doom) any potential future claim of “irreparable harm.”


What the NFL did before Vegas

While the NFL’s public statements may be carefully couched to protect the league’s flank, their recent actions paint a more revealing portrait of the league’s growing involvement in — and direct financial benefit from — wagering on the leagues’ contests.

The NFL has a data licensing deal with Sportradar US, a subsidiary of Swiss-based Sportradar, which reportedly provides real-time data and statistics to online gambling operators serving the US. The league also embraces daily fantasy sports23 NFL teams have marketing partnerships with either DraftKings or FanDuel (albeit, down from 29 nearly one year ago).

These are two oft-cited examples of the league’s hypocritical anti-gambling stance. This could be used to counter the league’s assertion that sports gambling harms its interests.

That brings us to the NFL’s latest action: approving the relocation of the Oakland Raiders to Las Vegas.


Now, there’s an NFL team moving to Nevada

For years, the NFL has shunned Las Vegas because of its legalized sports betting and casino environment, a historical aversion that has sometimes bordered on the farcical. As recently as 2015, the NFL was so spooked by any association with Las Vegas that it shut down a fantasy football convention featuring NFL players simply because it was being held in a convention center that was adjacent to a casino property.
But money talks — all $750 million of it. That’s the amount of public money financing the construction of a new football stadium to house the Las Vegas Raiders.

This is a dramatic turnabout for a league that not too long ago insisted in court papers that “there is a proven ‘stigmatizing effect’ of having sporting contests associated with gambling.” The placing of a team in Nevada — a state with an astounding 273 casinos and 196 licensed sports books — has the effect of unraveling so many of the league’s prior statements about the supposed “irreparable harm” that it would suffer from having any association with a gambling environment.

Consider, for example, the affidavit that Goodell gave in Christie I in support of the leagues’ request for a preliminary injunction. (The district court never ruled on the preliminary injunction motion, which was paired with a motion for final summary judgment, the latter of which the court granted).
What Goodell used to say on sports betting

In his affidavit, Goodell identified a number of “harms” that the NFL would suffer from New Jersey’s proposed sports betting scheme (In many ways, these concerns mirror the protections enshrined in Nevada sports betting regulations. Goodell spoke unfavorably of the link between the leagues’ contests and gambling. In particular, he decried the presence of “casinos and other gambling institutions”:

[C]asinos and other gambling institutions that permit betting on sports are often viewed unfavorably by a significant portion of the public. The NFL, on the other hand, strives to preserve and promote an image of fairness, and has invested mightily in maintaining this image. State-sponsorship of sports gambling threatens to confuse fans into believing that the NFL supports sports gambling, thereby allowing casino operators and other sports-betting operations to trade unfairly on the NFL’s goodwill and image of fairness.


In his affidavit, Goodell also warned that state-regulated sports gambling would harm the leagues by shifting fan loyalties from rooting for their favorite teams to “winning a bet.” Goodell asserted that state-sponsored sports betting

would . . . greatly increase the likelihood that the allegiance of certain fans will be turned from teams, players and high-level athletic competition, toward an interest first and foremost in winning a bet. . . . The core entertainment value of fair and honest competition between teams and athletes that is reflected in NFL games will be replaced by the bettor’s interest, based not on team or player performance, but on the potential financial impact of each on-the-field event.



NFL on harm

In articulating the NFL’s “irreparable harm,” Goodell’s affidavit also spoke of the threat to “the goodwill, character and integrity of NFL football” and the “bond” between fans and teams that would be “broken” if sports gambling were allowed:

The NFL cannot be compensated in damages for the harm that sports gambling poses to the goodwill, character and integrity of NFL football, and to the fundamental bonds of loyalty and devotion between fans and teams that the league seeks to maintain. Once the character and integrity of NFL football have been compromised, and the bonds of loyalty and devotion between fans and teams have been broken, NFL football will have been irreparably injured in a manner that cannot adequately be calculated in dollar.


What Goodell says now on sports betting

Now compare those dire warnings to Goodell’s more recent statements following the league’s formal approval of the Raiders’ relocation to Las Vegas.

At a press conference during the recent NFL owners’ meeting in Phoenix, Goodell sharply changed his tune regarding the NFL’s impending association with a sports gambling environment. In response to a question about whether the NFL would seek to have Nevada regulators take Raiders’ games off the board after their move to Las Vegas (expected in either 2019 or 2020), Goodell actually extolled the virtues of Nevada’s gaming regulatory environment, admitting that it “could be beneficial.”

With these three words, Goodell finally acknowledged what proponents of legal sports betting (including the American Gaming Association) have been saying for years. Robust regulation of sports betting — backed by consumer protections and close monitoring of the wagering that takes place on the leagues’ games — protects the integrity of sporting events. Or at least it does so better than simply allowing the activity to continue unabated (to the tune of $150 billion annually) in an unregulated and illegal environment. In the status quo, it is not as effectively monitored for suspicious wagering activity, is completely untaxed, lacks consumer safeguards, and allows criminal enterprises to flourish, thereby straining the limited resources of law enforcement.

We’ve heard this all before, but for Goodell and the NFL, it’s the league’s first public concession of the plainly obvious benefits of regulated — and legal — sports betting.


What this means for PASPA

From a purely legal perspective, the NFL’s “come-to-Jesus” moment may have serious — and deleterious — repercussions in a court of law (federal court) should the NFL and the other sports leagues find themselves in another battle over PASPA.

The leagues’ shopworn argument that the mix of sports and gambling poses an existential — and irreparable — threat to their product may have finally met its Waterloo. The leagues likely desire to reap the obvious financial benefits of sports betting, from:


All of that will also inure to their obvious detriment in one very critical area: the loss of the moral (or, rather, legal) high ground in resisting efforts by states to legalize it over the leagues’ objections.

The ability of the leagues to march into federal court and claim “irreparable harm” (or even a sufficiently “aggrieved” interest for purposes of establishing their legal “standing” to sue a renegade state that enacts a sports betting law) may have been forfeited (or at least severely compromised) by virtue of the leagues’ evolving stance on sports betting.
 

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Legal Sports Betting Could Happen Quickly In The US, If The NFL And Other Leagues Fall Flat On Proving ‘Harm’

Daniel Wallach, April 14, 2017

How does the threat of fixing games play in the ‘harm’ argument?

The NFL (and the other leagues) would likely pivot to the other supposed harm from expanded legal sports betting: the risk to the “integrity” of their games.

This issue is mentioned prominently in PASPA’s legislative history. A report by the Senate Judiciary Committee, the primary source of PASPA’s legislative history, identified a number of “harms” caused by sports gambling.

The committee believed that “ports gambling threatens the integrity of, and public confidence in, amateur and professional sports,” and reasoned that “[w]idespread legalization would inevitably promote suspicion about controversial plays and lead fans to think ‘the fix was in’ whenever their team failed to beat the point spread.” (Sen. Rep. 102-248, 102nd Cong., 1st Sess. 4, reprinted in 1992 U.S.C.C.A.N. 3553, 3556).

Along those lines, look for the NFL (and the other sports leagues) to dust off the following language from Commissioner Roger Goodell’s affidavit in the Christie I case in an attempt to articulate “irreparable harm” separate and apart from the “stigma” of gambling:

The spread of sports betting … threatens to damage irreparably damage the integrity of, and public confidence in, NFL football. An increase in state-promoted sports betting would wrongly and unfairly engender suspicion and cynicism toward every on-the-field NFL event that affects the betting line. If gambling is freely permitted on sporting events, normal incidents of the game such as bad snaps, dropped passes, turnovers, penalties, and play calling will inevitably fuel suspicion, distrust and accusations of point-shaving or game fixing.


But is the mere possibility of “point-shaving” or “game fixing” enough to establish the quantum of “irreparable harm” necessary to entitle the leagues to a preliminary injunction, which is considered an extraordinary remedy under the law? The legal standards governing irreparable harm in this specific context suggest that the answer is “no.”

Mere possibility of match-fixing does not rise to level of irreparable harm

As many federal cases have recognized, the threatened irreparable harm needed to secure a preliminary injunction must be “actual” and “imminent,” not remote or speculative. In other words, the “possibility” of irreparable injury is not enough; a “likelihood” is required. (see Footnote 1)
Under this exacting standard, the leagues will be hard-pressed to establish “irreparable harm” predicated on generalized fears that the public would begin questioning the outcomes of events whenever there is a controversial play or missed official’s call. Such an argument — to quote the cases cited above — is simply too conjectural or speculative to succeed in the normal course. It lacks the quality of an “imminent” and “actual” threat to succeed on a motion for preliminary injunction.

Moreover, the lack of recent point-shaving or match-fixing scandals involving the leagues’ games underscores the significant evidentiary obstacles that the leagues would face in trying to prove an actual and imminent threat to their product. (This comes with the backdrop that illegal wagering on U.S. sporting events has increased nearly five-fold — from $40 billion to north of $150 billion — since PASPA was enacted in 1992.)
It could even be credibly argued that a state-regulated landscape — with an emphasis on integrity monitoring and cooperation among bookmakers, regulators, the leagues and law enforcement authorities — would bolster, rather than harm, the integrity of the leagues’ games.
Certainly, the leagues — in an effort to prove irreparable harm — will trot out consumer surveys and public opinion polls to show that a sizable percentage of the public still believes that match-fixing is an issue in US sporting events.

Public concern about match fixing

Indeed, the leagues previously relied on consumer survey evidence to establish their “standing” to sue in the Christie I case.
One such study — the 2009 NBA Integrity Survey — found that 10 percent of respondents felt that “game fixing” most negatively affected the integrity of the leagues’ games. Even among who did not consider game fixing to be of “utmost concern,” 33 percent of NBA fans, 15 percent of NFL fans, 13 percent of MLB fans, seven percent of NHL fans, 18 percent of NCAA basketball fans and 15 percent of NCAA football fans thought that game fixing was “problematic.”

A new poll just out on the move of the Raiders to Las Vegas brings to light similar concerns.
But while such numbers — though not alarmingly high — were sufficient to establish the leagues’ standing to sue. That required only a showing of a “trifle” of an injury — they fall well short (both quantitatively and qualitatively) of constituting the sine qua non of an irreparable injury — that is, an “actual” and “imminent” threat of harm that cannot be adequately compensated by money damages alone.
On a motion for a preliminary injunction, the leagues will need to do better than stale consumer surveys.

Avoiding a preliminary injunction is the key for states on sports betting

The continuing erosion of the leagues’ “irreparable harm” argument provides an early entry point for states wishing to legalize sports betting but wary of the sizable legal fees and time investment needed to accomplish that objective through the uncertain vehicle of litigation.
Indeed, the “lawsuit-averse” crowd might point to the years-long New Jersey sports betting saga (now in its sixth year) in preaching patience — and courtroom inaction — by other states. However, New Jersey’s multi-year journey through the federal court system should not be viewed as a bellwether of the likely litigation path that other states would face.

New Jersey has spent more than $6 million litigating the two Christie cases over the course of six years, two appeals, one rehearing, and two Supreme Court petitions. But a prospective state challenger now has a “blueprint” (courtesy of New Jersey) for challenging PASPA on constitutional grounds, and likely wouldn’t need two cases to reach a resolution.

The arguments for challenging PASPA have already been developed and road-tested by New Jersey’s supremely-talented legal team (which includes former US Solicitor General Ted Olson) at three different tiers of the federal court system, aided by numerous “friend of the court” briefs.
Further, the dissenting opinions in the two Third Circuit Court of Appeals rulings provide additional ammo to a state considering a PASPA challenge in another federal judicial circuit. The same legal issues would be in play, just in a different court. A state that takes the baton from New Jersey would likely bear a much lower litigation cost, since so much of the heavy lifting has already been done.

Legal sports betting could happen quickly in this scenario

Moreover, it wouldn’t necessarily take years of litigation for a state to achieve legal sports betting within its borders. (On that score, it’s worth noting that both of the Christie lower court cases were over within a period of several months. The Christie I appeal to the Third Circuit was completed within six months — a factor largely attributable to the purely legal issues that were in play).

Ideally, winning the lawsuit on the merits is the obvious endgame for a state — even if it does take a few years to accomplish. But, in my opinion, the most important part of the case will arrive early — potentially within weeks of the lawsuit being filed — when the sports leagues ask the court to issue a preliminary injunction to block a state from implementing its sports betting law.

And it’s at that early stage when the all-important “irreparable harm” issue will come into play — quite possibly to the leagues’ detriment given the recent developments highlighted previously.

If a prospective state challenger can avoid the early entry of a preliminary injunction — and “irreparable harm” may hold the key — the upside would be enormous. That state would then be able to offer single-game sports betting within its borders immediately, subject only to the possibility of a later reversal following a trial or an appeal.
Of course, gaming operators licensed in multiple jurisdictions might understandably be reluctant to go full-steam ahead without the certainty of a final judgment. But for single-state operators, those concerns would not be nearly as acute.
And this could all unfold within a matter of weeks. Not five years or even one year —instead, instant gratification. And for that, a lucky state may have the Las Vegas Raiders and several glib commissioners to thank for their good fortune.

Footnote 1

See Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 22 (2008) (“Issuing a preliminary injunction based only on a possibility of irreparable harm is inconsistent with our characterization of injunctive relief as an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.”); Reuters Ltd. v. United Press Intern’l, Inc., 903 F.2d 904, 907 (2d Cir. 1990) (“Irreparable harm must be shown by the moving party to be imminent, not remote or speculative.); Caribbean Marine Service Co. v. Baldridge, 844 F.2d 668, 674 (9th Cir.1988) (“Speculative injury does not constitute irreparable injury sufficient to warrant granting a preliminary injunction. . . . [A] plaintiff must do more than merely allege imminent harm to establish standing, a plaintiff must demonstrate immediate threatened injury as a prerequisite to preliminary injunctive relief.”).
 

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