Highlights from new NJ sports betting brief to U.S. Supreme Court
John Brennan
8/31/17
UPDATE: Here is a reaction to the latest from longtime gaming law attorney Nick Casiello:
"What could happen? Several alternatives. The Supreme Court could simply affirm the constitutionality of [the Professional and Amateur Sports Protection Act of 1992], and the status quo remains. Further federal legislation would then be necessary for New Jersey or other states to have sports betting - which would likely take years.
"Or it could find that PASPA is unconstitutional, and states are free to allow and regulate sports wagering. That, too, could result in federal legislation and regulation at the insistence of the professional sports leagues.
"Or the Court could rule that PASPA is constitutional, but add that the New Jersey approach of not regulating sports wagering does not violate PASPA, which would result in unregulated sports betting. That also could result in a push by the professional sports leagues for federal regulation."
SEE BELOW the dotted line for highlights from two "amicus" briefs also filed for this case this week - both tackle the issue of "if this law is upheld, what ELSE might Congress do similarly):
Here are some key passages from the New Jersey sports betting briefs filed this week to the U.S. Supreme Court. The surprising decision by the nation's top court in June to take the case has many experts predicting an overturn by the Court of a 1992 federal law (PASPA) that bans most sports betting outside of Nevada, so these arguments have particular importance.
From the 57-page filing by Ted Olson on behalf of New Jersey:
- "Until recently, nearly all States prohibited wagering on sports. Nevada legalized sports wagering in 1949, but as of 1992, no other State had broadly permitted such wagering."
- "The American Gaming Association (AGA) estimates that Americans illegally gamble around $149 billion on sports events each year."
- "In short, under the 2014 Repeal, the State would have no role in licensing or regulating sports wagering that takes place at those locations where New Jersey’s prohibitions had been repealed. Sports wagering by adults at those locations would be as legal as buying a cup of coffee at Starbucks; New Jersey would regard it as a private transaction subject only to generally applicable state and federal laws."
- Proteus-like, the Leagues’, the United States’, and the lower courts’ construction of PASPA has changed again and again to avoid answering the question pressed by New Jersey’s citizens of what the State can do to legalize sports wagering within its borders. Indeed, the Third Circuit’s current permutation - that PASPA permits States to repeal their own laws unless the repeal has too much “authorizing effect" - is so slippery that the Third Circuit itself doubted that “a line whereby a partial repeal of a sports wagering ban amounts to an authorization under PASPA . . . could be drawn.”
- "To meet Congress’s objective of forestalling further legalization of sports wagering, PASPA directs States to maintain in effect their state-law prohibitions on the activity. Our constitutional structure does not permit Congress to regulate interstate commerce in that manner. Indeed, PASPA reflects precisely the method of governance—“ineffectual and provocative of federal-state conflict" - that the Articles of Confederation employed but that the Constitution’s Framers, after much debate, expressly rejected in favor of a federal government that could act directly upon citizens.
"Under our Constitution, if Congress wishes for sports wagering to be illegal, it must make the activity unlawful itself. It cannot compel States to do so. The decision of the court of appeals should be reversed."
....................................
From the filing by the New Jersey Thoroughbred Horsemen's Association, which is an intervenor in the case:- "The NJTHA believes that the only revenue stream that can save Monmouth Park at the present time is revenue from sports betting. ....Monmouth Park estimates that it is losing over one million dollars every week because of its inability to conduct sports betting."
- "While Monmouth Park and the New Jersey equine industry suffer because Monmouth Park is prohibited from conducting sports wagering, the Leagues have been profiting from fantasy sports betting, and especially daily fantasy sports betting Despite the fact that PASPA makes it “unlawful”for States to “authorize by law” betting on the “performances of such athletes” in the Leagues’ games, the Leagues have done nothing to stop the spread of Fantasy or DFS wagering."
- "There are two alternative ways to decide this case. First, if PASPA is given its most natural construction, it violates the Tenth Amendment and principles of structural federalism because it commands States to govern according to Congress’s instructions. Second, if PASPA is susceptible of a reasonable avoidance construction then it may be construed to allow States to repeal, in whole or in part, sports betting prohibitions. Either way, New Jersey’s 2014 Repealer is valid."
- "PASPA is an unconstitutional anachronism….. Because PASPA commands New Jersey to maintain an anti-sports betting body of law, it violates the Tenth Amendment and structural federalism.
Since States are commanded by PASPA not to permit sports gambling, then, logically, they are being commanded by PASPA to prohibit it. In so doing, PASPA puts a gun in the hands of private sports organizations, such as the Leagues, granting to them the unfettered discretionary power to target enforcement of PASPA against private parties, such as the NJTHA, sovereign States like New Jersey, or both.
If Monmouth Park conducted sports betting, the NJTHA members and Monmouth Park employees would be subject to arrest and hauled into state court by federally conscripted state executive officials, who have been compelled to enforce a federal command by federal injunction, obtained at the behest of the Leagues, to give effect to a repealed state law.
"And, if the state officials refused to make the arrests required by the federal injunction they would be subject to being hauled into federal court by the Leagues for their failure to obey an injunction requiring them to bring the state law prosecution under the repealed state laws in state court.
"This is absurd on every level. Yet, this is the reality that has confronted, and continues to confront, the NJTHA. It is a blatant abridgement of liberty. Why PASPA is said to exempt sports bets that are de minimis or made by those in a familial/friendly relationship is left wholly unexplained. Why PASPA bars state law repeals of less than 50% while allowing state law repeals of more than 50% is anyone’s guess.
"The en banc majority’s rewrite of PASPA is reminiscent of the proposition that sometimes lawmakers will permissibly seek a “Goldilocks solution – not too large, not too small, but just right.” But the way in which the en banc majority rewrote PASPA is the inverse of a Goldilocks solution: it would be as if Goldilocks were happy sitting in an oversized chair (such as Edith Ann’s rocking chair) or in a teeny chair (such as the ones in Derek Zoolander’s children’s center), but not in anything between these two extremes.
"It is difficult to see where a principle would come from to determine what is small enough to be permissible and what is large enough to be permissible under PASPA. But even if such lines could be drawn in a principled way, the en banc majority’s construction of PASPA produces the bizarre result that once a State passes the de minimis threshold, the more a State allows sports gambling, the closer it comes to compliance with PASPA.
"If allowing sports gambling in two of New Jersey’s twenty-one counties were found to be too selective and thus on the prohibited side of the PASPA compliance line, allowing it in 10 counties would move New Jersey closer to compliance with PASPA; if ten were not enough, allowing it in would be a step in the compliance direction; if fifteen were not enough, allowing it in 20 might be.
- "There is another way to decide this case. This Court can avoid deciding the constitutional question by construing PASPA to allow the States to repeal sports betting prohibitions, in whole or in part. Although construing PASPA this way is not the most natural construction of PASPA, such an approach has been championed by Judge Fuentes, and, at times, advocated by the United States as well as by the Leagues.The Court may determine that PASPA is susceptible of such construction and, if so, it avoids the need to decide the constitutional question."
- "Either PASPA allows States to repeal their sports betting prohibitions in whole or in part, or it is unconstitutional. Either way, New Jersey’s 2014 Repealer is valid."
Here are highlights from a joint amicus brief of the Cato Institute, the Pacific Legal Foundation, and the Wisconsin Institute for Law & Liberty:
- "Allowing Congress to hijack states’ law-making authority to prevent reform would undermine the two primary values underlying the anti-commandeering principle: federalism and political accountability."
- "The anti-commandeering principle does not limit what the federal government can do, only how it may do it. Consequently, this Court has steadfastly refused to balance the principle against short-term political expediency. “No matter how powerful the federal interest involved, the Constitution simply does not give Congress the authority to require the States to regulate."
- "Limiting the anti-commandeering principle to save PASPA would not only threaten marijuana or gambling reform, it could block any sort of state-level reform that federal politicians, rightly or wrongly, may oppose. The federal government could forbid states from authorizing state officials not to participate enforcing federal immigration laws.
"Congress could prevent the further spread of right-to-work laws or, if those laws someday prove unwise, require states to maintain them anyway. It could forbid states from increasing gun control or relaxing existing gun regulations. It could forbid states from modifying school curricula or testing requirements. And Congress could block states from altering controversial bathroom policies in light of local debates over social norms."
NEXT is the amicus brief from John Holden, a visiting scholar at Florida State University:
- "There is no Federal regulatory regime for States to default to in the case of sports gambling, making this case distinct from this Court’s prior anti-commandeering cases."
- "Indubitably, PASPA is a problematic statute. PASPA requires the States to utilize their police powers to enforce Federal policy and prohibits State legislatures from exercising their constitutionally protected autonomy.
"The Federal commandeering of New Jersey’s legislative process is being puppeteered through an illusory regulatory scheme that lacks a truly preemptive affect. PASPA’s authorization of Federal and private intrusion into the State legislative process is an affront to years of federally recognized State autonomy in the regulation and classification of gaming activities."
- "PASPA does not contain a clause expressly preempting State statutes that are inconsistent. Not even a broad reading of PASPA could be interpreted to expressly preempt State law. PASPA commands those non-exempted States, by the various exemptions in section 3704, to not commit one of the six PASPA sins (sponsor, operate, advertise, promote, license, or authorize), but is silent as to any intended express preemptive effect."
- "America’s reliance on gambling has been often overlooked in modern conversation. America was built on gambling and those decisions were executed by the States. The Jamestown settlement was funded through a lottery more than 150 years before the ratification of the Constitution.
John Brennan
8/31/17
UPDATE: Here is a reaction to the latest from longtime gaming law attorney Nick Casiello:
"What could happen? Several alternatives. The Supreme Court could simply affirm the constitutionality of [the Professional and Amateur Sports Protection Act of 1992], and the status quo remains. Further federal legislation would then be necessary for New Jersey or other states to have sports betting - which would likely take years.
"Or it could find that PASPA is unconstitutional, and states are free to allow and regulate sports wagering. That, too, could result in federal legislation and regulation at the insistence of the professional sports leagues.
"Or the Court could rule that PASPA is constitutional, but add that the New Jersey approach of not regulating sports wagering does not violate PASPA, which would result in unregulated sports betting. That also could result in a push by the professional sports leagues for federal regulation."
SEE BELOW the dotted line for highlights from two "amicus" briefs also filed for this case this week - both tackle the issue of "if this law is upheld, what ELSE might Congress do similarly):
Here are some key passages from the New Jersey sports betting briefs filed this week to the U.S. Supreme Court. The surprising decision by the nation's top court in June to take the case has many experts predicting an overturn by the Court of a 1992 federal law (PASPA) that bans most sports betting outside of Nevada, so these arguments have particular importance.
From the 57-page filing by Ted Olson on behalf of New Jersey:
- "Until recently, nearly all States prohibited wagering on sports. Nevada legalized sports wagering in 1949, but as of 1992, no other State had broadly permitted such wagering."
- "The American Gaming Association (AGA) estimates that Americans illegally gamble around $149 billion on sports events each year."
- "In short, under the 2014 Repeal, the State would have no role in licensing or regulating sports wagering that takes place at those locations where New Jersey’s prohibitions had been repealed. Sports wagering by adults at those locations would be as legal as buying a cup of coffee at Starbucks; New Jersey would regard it as a private transaction subject only to generally applicable state and federal laws."
- Proteus-like, the Leagues’, the United States’, and the lower courts’ construction of PASPA has changed again and again to avoid answering the question pressed by New Jersey’s citizens of what the State can do to legalize sports wagering within its borders. Indeed, the Third Circuit’s current permutation - that PASPA permits States to repeal their own laws unless the repeal has too much “authorizing effect" - is so slippery that the Third Circuit itself doubted that “a line whereby a partial repeal of a sports wagering ban amounts to an authorization under PASPA . . . could be drawn.”
- "To meet Congress’s objective of forestalling further legalization of sports wagering, PASPA directs States to maintain in effect their state-law prohibitions on the activity. Our constitutional structure does not permit Congress to regulate interstate commerce in that manner. Indeed, PASPA reflects precisely the method of governance—“ineffectual and provocative of federal-state conflict" - that the Articles of Confederation employed but that the Constitution’s Framers, after much debate, expressly rejected in favor of a federal government that could act directly upon citizens.
"Under our Constitution, if Congress wishes for sports wagering to be illegal, it must make the activity unlawful itself. It cannot compel States to do so. The decision of the court of appeals should be reversed."
....................................
From the filing by the New Jersey Thoroughbred Horsemen's Association, which is an intervenor in the case:- "The NJTHA believes that the only revenue stream that can save Monmouth Park at the present time is revenue from sports betting. ....Monmouth Park estimates that it is losing over one million dollars every week because of its inability to conduct sports betting."
- "While Monmouth Park and the New Jersey equine industry suffer because Monmouth Park is prohibited from conducting sports wagering, the Leagues have been profiting from fantasy sports betting, and especially daily fantasy sports betting Despite the fact that PASPA makes it “unlawful”for States to “authorize by law” betting on the “performances of such athletes” in the Leagues’ games, the Leagues have done nothing to stop the spread of Fantasy or DFS wagering."
- "There are two alternative ways to decide this case. First, if PASPA is given its most natural construction, it violates the Tenth Amendment and principles of structural federalism because it commands States to govern according to Congress’s instructions. Second, if PASPA is susceptible of a reasonable avoidance construction then it may be construed to allow States to repeal, in whole or in part, sports betting prohibitions. Either way, New Jersey’s 2014 Repealer is valid."
- "PASPA is an unconstitutional anachronism….. Because PASPA commands New Jersey to maintain an anti-sports betting body of law, it violates the Tenth Amendment and structural federalism.
Since States are commanded by PASPA not to permit sports gambling, then, logically, they are being commanded by PASPA to prohibit it. In so doing, PASPA puts a gun in the hands of private sports organizations, such as the Leagues, granting to them the unfettered discretionary power to target enforcement of PASPA against private parties, such as the NJTHA, sovereign States like New Jersey, or both.
If Monmouth Park conducted sports betting, the NJTHA members and Monmouth Park employees would be subject to arrest and hauled into state court by federally conscripted state executive officials, who have been compelled to enforce a federal command by federal injunction, obtained at the behest of the Leagues, to give effect to a repealed state law.
"And, if the state officials refused to make the arrests required by the federal injunction they would be subject to being hauled into federal court by the Leagues for their failure to obey an injunction requiring them to bring the state law prosecution under the repealed state laws in state court.
"This is absurd on every level. Yet, this is the reality that has confronted, and continues to confront, the NJTHA. It is a blatant abridgement of liberty. Why PASPA is said to exempt sports bets that are de minimis or made by those in a familial/friendly relationship is left wholly unexplained. Why PASPA bars state law repeals of less than 50% while allowing state law repeals of more than 50% is anyone’s guess.
"The en banc majority’s rewrite of PASPA is reminiscent of the proposition that sometimes lawmakers will permissibly seek a “Goldilocks solution – not too large, not too small, but just right.” But the way in which the en banc majority rewrote PASPA is the inverse of a Goldilocks solution: it would be as if Goldilocks were happy sitting in an oversized chair (such as Edith Ann’s rocking chair) or in a teeny chair (such as the ones in Derek Zoolander’s children’s center), but not in anything between these two extremes.
"It is difficult to see where a principle would come from to determine what is small enough to be permissible and what is large enough to be permissible under PASPA. But even if such lines could be drawn in a principled way, the en banc majority’s construction of PASPA produces the bizarre result that once a State passes the de minimis threshold, the more a State allows sports gambling, the closer it comes to compliance with PASPA.
"If allowing sports gambling in two of New Jersey’s twenty-one counties were found to be too selective and thus on the prohibited side of the PASPA compliance line, allowing it in 10 counties would move New Jersey closer to compliance with PASPA; if ten were not enough, allowing it in would be a step in the compliance direction; if fifteen were not enough, allowing it in 20 might be.
- "There is another way to decide this case. This Court can avoid deciding the constitutional question by construing PASPA to allow the States to repeal sports betting prohibitions, in whole or in part. Although construing PASPA this way is not the most natural construction of PASPA, such an approach has been championed by Judge Fuentes, and, at times, advocated by the United States as well as by the Leagues.The Court may determine that PASPA is susceptible of such construction and, if so, it avoids the need to decide the constitutional question."
- "Either PASPA allows States to repeal their sports betting prohibitions in whole or in part, or it is unconstitutional. Either way, New Jersey’s 2014 Repealer is valid."
Here are highlights from a joint amicus brief of the Cato Institute, the Pacific Legal Foundation, and the Wisconsin Institute for Law & Liberty:
- "Allowing Congress to hijack states’ law-making authority to prevent reform would undermine the two primary values underlying the anti-commandeering principle: federalism and political accountability."
- "The anti-commandeering principle does not limit what the federal government can do, only how it may do it. Consequently, this Court has steadfastly refused to balance the principle against short-term political expediency. “No matter how powerful the federal interest involved, the Constitution simply does not give Congress the authority to require the States to regulate."
- "Limiting the anti-commandeering principle to save PASPA would not only threaten marijuana or gambling reform, it could block any sort of state-level reform that federal politicians, rightly or wrongly, may oppose. The federal government could forbid states from authorizing state officials not to participate enforcing federal immigration laws.
"Congress could prevent the further spread of right-to-work laws or, if those laws someday prove unwise, require states to maintain them anyway. It could forbid states from increasing gun control or relaxing existing gun regulations. It could forbid states from modifying school curricula or testing requirements. And Congress could block states from altering controversial bathroom policies in light of local debates over social norms."
NEXT is the amicus brief from John Holden, a visiting scholar at Florida State University:
- "There is no Federal regulatory regime for States to default to in the case of sports gambling, making this case distinct from this Court’s prior anti-commandeering cases."
- "Indubitably, PASPA is a problematic statute. PASPA requires the States to utilize their police powers to enforce Federal policy and prohibits State legislatures from exercising their constitutionally protected autonomy.
"The Federal commandeering of New Jersey’s legislative process is being puppeteered through an illusory regulatory scheme that lacks a truly preemptive affect. PASPA’s authorization of Federal and private intrusion into the State legislative process is an affront to years of federally recognized State autonomy in the regulation and classification of gaming activities."
- "PASPA does not contain a clause expressly preempting State statutes that are inconsistent. Not even a broad reading of PASPA could be interpreted to expressly preempt State law. PASPA commands those non-exempted States, by the various exemptions in section 3704, to not commit one of the six PASPA sins (sponsor, operate, advertise, promote, license, or authorize), but is silent as to any intended express preemptive effect."
- "America’s reliance on gambling has been often overlooked in modern conversation. America was built on gambling and those decisions were executed by the States. The Jamestown settlement was funded through a lottery more than 150 years before the ratification of the Constitution.
