States looking to challenge federal sports betting law might be able to offer wagering during court case
Legal Sports Report

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

NFL sports betting harm argument

Editor’s note: This is the final in a series or articles about the NFL and other pro leagues’ case against legalized sports betting.

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

Part two: The NFL’s Move To Las Vegas May Be The Death Knell For ‘Irreparable Harm’ Argument Against Sports Betting

As I pointed out in the previous two articles, the words and actions of the US pro sports leagues hurt their argument that legal sports betting would “harm” them in any meaningful way.

Does this mean that the “irreparable harm” argument is dead and buried? Not necessarily. And this revelation creates a new blueprint for states wanting to challenge the federal prohibition on sports betting.

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 “[s]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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Daniel Wallach
- Wallach, of Becker & Poliakoff, is a leading U.S. authority on gaming law and sports law, and has counseled professional sports teams, fantasy sports operators, casinos, racetracks, sports betting companies, and other gaming industry participants on a wide spectrum of gaming-related matters.