New Research Argues Federal Sports Betting Law Gives Sports Leagues Unconstitutional Powers

Written By

Updated on

NJ Sports betting amicus brief

Little original commentary is left available, it seems, on the Professional and Amateur Sports Protection Act. Trade groups, state and federal officials, major media companies and gaming attorneys have criticized the much-scrutinized federal sports betting ban ad nauseam.

But an amicus brief docketed Wednesday advances the arguments in the New Jersey sports betting case. Filed alongside the state’s appeal to the US Supreme Court of the Third Circuit’s August sports betting ruling, the brief comes as close as anything in recent months to achieving new insight on the law.

The brief’s author, Florida State associate professor Ryan Rodenberg, argues that PASPA unconstitutionally grants lawmaking powers to private actors — in this case, the sports leagues — by allowing those actors to be the primary, and oftentimes selective, enforcers of federal law.

While the law is already taking water over its bureaucratically fortified bow faster than it can handle, Rodenberg’s analysis helps demonstrate how how the hull was rotted from the core all along.

PASPA bestows regulatory authority on private entities

Rodenberg claims PASPA’s outsourcing of regulatory authority to the leagues runs counter to what’s referred to as the private nondelegation doctrine.

The doctrine flows from the first article of the US Constitution, which states that all legislative powers granted shall be vested in Congress.

The leagues’ power of authority, Rodenberg notes, is on par with that of the Department of Justice, a federal executive department of the United States government, and the only other potential enforcer of PASPA.

In the law’s 24-year history, the DOJ has never brought a PASPA proceeding against any state. The leagues have brought three in the past seven years.

The leagues’ enforcement capabilities allow PASPA to be selectively enforced to the benefit of the enforcers, he notes, and not to the benefit of states, businesses, or ordinary citizens.

PASPA did not intend for leagues to run sports gambling

Technological innovation, economic pressures and skyrocketing consumer demand are causing states to consider adopting forms of sports betting.

Rodenberg notes that the leagues’ positioning, illustrated via data deals with sports betting companies, Adam Silver’s op-ed, and other actions, indicates their clear attraction to the economic potential for sports betting as well.

In this sense, the leagues and the states are effectively competitors.

The Plaintiff Sports Leagues’ interests are adverse to the very entities PASPA’s regulatory scheme attaches – New Jersey and other States seeking to regulate and tax sports betting under state law. With today’s technology-fueled revenue-generating gambling opportunities for sports leagues, New Jersey and the Plaintiff Sports Leagues are actual or potential competitors. Indeed, the Plaintiff Sports Leagues posited that they have a proprietary interest in “the degree to which others derive economic benefits from their own games.”

While it might seem far-fetched, the leagues would do well not to enter into the business of wagering themselves, effectively creating a new monopoly.

Rodenberg’s research highlights a 1991 Senate report entitled Professional and Amateur Sports Protection, in which the Senate Committee on the Judiciary noted that PASPA “does not benefit professional sports financially” because the bill clearly prohibited leagues from instituting their own sports betting scheme.

What type of enforceable authority a 25-year-old Senate report holds is questionable at best. But to a federal judicial system clearly bent on fostering the intent of PASPA, the document would seem highly germane.

PASPA violates the ‘case or controversy’ clause

Rodenberg also argues that PASPA’s scope of enforcement extends beyond what is permissible under Article III, Section II of the US Constitution, known as the case or controversy clause.

The District Court, he writes, unconstitutionally extended the scope of the leagues’ power of injunctive relief beyond what this clause allows.

Rodenberg points to an exchange in October of 2014 during a teleconference ruling between an attorney for New Jersey and a district court judge who granted the leagues’ motion for a temporary restraining order.

The attorney asked whether or not the scope of the injunction being sought applies to betting on all sports contests across every league, or just to those of the four leagues and the NCAA seeking the injunction.

Initially, the judge said the injunction applied only to the games of the leagues bringing action. But a few hours later, the judge reversed his decision, saying “the scope of restraints is NOT limited to the games sponsored by the plaintiffs’ leagues.”

While PASPA grants all sports leagues standing to sue the states, no sports leagues other than the four major North American professional leagues and the NCAA have done so.

Under the judge’s about-face, which has not been reversed or overruled, leagues like the WNBA or Major League Soccer, which were not even in existence between 1976 and 1990, could sue New Jersey for operating an NFL betting scheme.

This reversal, and the precedent it sets for future PASPA cases, Rodenberg argues, is unconstitutional.

Leagues shunned idea of congressionally vested authority

Rodenberg’s research also unearthed a seemingly conflicting stance from the professional sports leagues on the issue of their own sports betting scheme enforcement powers. But it didn’t emanate from PASPA.

In 2007, Rodenberg notes, the leagues sent a letter to Congress that weighed in on a proposal to scale back terms of the Unlawful Internet Gambling Enforcement Act.

In the face of easing UIGEA’s restrictions for all online betting, the proposal would have allowed leagues to unilaterally decide whether to prohibit online betting on their respective sports.

But in addition to the DOJ, even the leagues — the potential beneficiaries of such vested powers — thought that assuming such an enforcement role could expose them to constitutional liability.

Attorneys for the four major professional sports leagues and the NCAA admitted in the letter that they could be subject to a court challenge on the grounds that Congress would have “unconstitutionally delegated its lawmaking power” to them.

The alteration of UIGEA went nowhere, as have several other attempts to curtail sports betting.

But the question remains: If the delegation of power to private entities was opposed even by the private entities themselves in the case of UIGEA, why wasn’t the delegation of power to those entities similarly opposed in PASPA?