Leagues Can Pick And Choose When To Enforce Sports Betting Ban
Legal Sports Report

PASPA’s Problem With Selective Enforcement For US Sports Betting Could Be Larger Than First Thought

PASPA selective enforcement
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This is the first in a series of articles taking a closer look at the federal law that bans sports betting in most of the US.

Recent court rulings on the Professional and Amateur Sports Protection Act, as well as new research scrutinizing actors’ ability to unfairly enforce those laws, are priming the conversation surrounding the New Jersey sports betting appeal to the US Supreme Court.

They indicate that the Third Circuit Court of Appeals is just as concerned with the intent and effect of state laws attempting to repeal sports betting prohibitions as it is with the actual letter of those laws. (The Third Circuit has heard three PASPA cases.)

This opens law enforcement, the courts and the sports leagues up to a series of irreconcilable contradictions. All of these fuel the sports leagues’ ability to selectively enforce America’s sports betting ban.

What is selective enforcement?

NYU law professor Michal Tamir defines the selective enforcement doctrine as the “uneven enforcement of neutral law.”

For PASPA, it refers to enforcement parties enjoining sports betting when it is advantageous for them to do so. They do not enjoin in instances where it is disadvantageous for them to do so. This is despite the fact that all instances of said sports betting are against the law.

PASPA empowers only two enforcement authorities:

  • The Department of Justice;
  • and those who sponsor, organize, schedule, or conduct a competitive game in which professional or amateur athletes play.

Effectively, this refers to the sports leagues and the NCAA, but could theoretically refer to any sports league or organizer in existence.

Leagues’ enforcement powers could be unconstitutional

One of several recent amicus briefs in New Jersey’s sports betting appeal to the US Supreme Court highlighted how federal law unconstitutionally vests leagues with powers of enforcement in the first place.

The brief, by law professor Ryan Rodenberg, argues that the leagues have the power to enforce PASPA. That federal law exempts a few gambling schemes from its remit, to their own benefit, in violation of what’s called the private non-delegation doctrine.

Rodenberg also notes that PASPA grants sports leagues the ability to bring enforcement action against games that don’t pertain to the sports they organize. (That came during a 2014 ruling in the New Jersey sports betting case.) Major League Baseball, theoretically, could sue to stop a website from offering betting on tennis.

The brief also revealed that the leagues recognized the unconstitutionality of their enforcement powers. They rejected a similar offering of those powers, in a 2007 letter to Congress pertaining to a related gambling law, the Unlawful Internet Gambling Enforcement Act.

PASPA court rulings put focus on defendants’ intent

The legal and legislative origins of PASPA help illustrate why the leagues get to selectively enforce what they do.

The three federal court cases pertaining to PASPA demonstrate how the court can put heavy emphasis on the nature and intent of the state efforts that the leagues are trying to enjoin.

In each instance, the court characterized the intent of these state sports betting laws as different from the laws’ self-defined intent. 

MLB v. Markell

The origins of the leagues’ selective enforcement date back to a Third Circuit Court of Appeals PASPA case: MLB v. Markell.

In 2009, Delaware governor Jack Markell attempted to institute a single-game sports betting scheme. The rationale: The state had already approved the scheme in 1976. PASPA exempts from prohibition sports wagering schemes that were already in existence between 1976 and 1990.

Third Circuit Judge Thomas Hardiman ruled that Delaware could not institute the single-game element the act sought to authorize. Why? Because the state only “authorized” such a scheme between 1976 and 1990, and did not actually “conduct” such a scheme. The latter verb is the one PASPA hinges on.

But instead of stopping at the authorize/conduct determination, Hardiman went further. 

This foreshadowed the nature of his court’s rulings against New Jersey in the coming years. Hardiman expressed just as much concern with what Delaware’s law would actually result in, as he did with whether it violated PASPA.

The court noted that Delaware intended to commence its sports betting scheme in time for the start of the NFL season the following month. (The ruling came in an expedited, late-August ruling stemming from a motion filed two weeks prior.)

Hardiman noted the exceptionality of such an expedient ruling for a case involving oral arguments, but understood that in this case, “the stakes are high, and time is of the essence.” The could issued the ruling 11 days before Delaware was to offer betting on NFL games.

The court also cited Delaware’s own counsel as admitting the state intended to conduct widespread betting on sports.

These remarks appeared to work against the state. Hardiman used them to show that Delaware’s law ran counter to the defined intent of PASPA — “to limit the spread of state-sponsored sports gambling and maintain the integrity of sports” — as much as it did the defined letter of PASPA.

NCAA v. Governor Of New Jersey (Christie I)

The leagues filed for another August injunction in 2012 to stop the implementation of New Jersey’s sports betting law. The law would have allowed for casinos and other entities to operate sports pools, and apply for a license to do so. 

The Third Circuit’s hearing of the case hinged mostly on PASPA’s constitutionality. But Judge Julio Fuentes noted that the court’s duty was not to judge the wisdom of PASPA. Nor would it touch on the desirability of the activities New Jersey sought to regulate with its law. Instead, he said, the court’s duty was to say “what the law is.” Such an interpretation would seem to advocate for a strict reading of the letter of the law.

But Fuentes’ ruling made several references concerning what New Jersey’s law would actually result in. It was not just an analysis of the extent to which the state should be allowed to repeal its prohibitions.

Fuentes remarked on New Jersey’s long established desire to “stanch the sports-wagering black market” and generate revenue for its failing casinos. “We are [not] glib with respect to one of the main purposes of the law: to use the Leagues’ games for profit,” he wrote.

The leagues also invoked intent, saying the law, “would increase the total amount of gambling on sports available, thereby souring the public’s perception of the Leagues as people suspect that games are affected by individuals with a perhaps competing hidden monetary stake in their outcome,” Fuentes wrote.

Thus, a case that was about the extent and nature of New Jersey’s ability to repeal sports betting prohibitions was as much about what the prohibitions would result in as it was the state’s ability to make them. 

NCAA v. Governor of New Jersey (Christie II)

The most overt example of the court considering intent came in the Third Circuit’s most recent PASPA ruling. That was the en banc decision rendered this past August in the case regarding New Jersey’s second sports betting law. 

It pointed to comments by New Jersey state Sen. Raymond J. Lesniak that indicated the law would generate sports betting commerce, create jobs and help revive Atlantic City’s flagging casino industry. Again, these remarks seemed to work against the state. They contradicted its innocuous, hands-thrown-up characterization of a partial repeal of its own betting restrictions.

Like PASPA, the 2014 New Jersey law had a specifically prescribed intent. It said it was not to be construed as authorizing sports betting. The Third Circuit, though, didn’t appear to give that “intent” the same credence it gave to PASPA’s.

“The presence of the word ‘repeal’ does not prevent us from examining what the provision actually does, and the Legislature’s use of the term does not change that the 2014 Law selectively grants permission to certain entities to engage in sports gambling,” Judge Marjorie Rendell wrote for the majority.

“While artfully couched in terms of a repealer, the 2014 Law essentially provides that, notwithstanding any other prohibition by law, casinos and racetracks shall hereafter be permitted to have sports gambling. This is an authorization.”

Rendell’s comments indicated the court decided New Jersey was up to more than an honest repeal of policy. It was as if to say, “We know what you’re really doing here, New Jersey.”

New Jersey’s 2016 sports betting bill

There’s a slim but plausible chance we could be heading for a third federal case. That would come in the event yet another sports betting legislative effort passes through New Jersey’s General Assembly.

New Jersey legislators have introduced a sports betting bill. Instead of opting for full authorization or a partial repeal, the legislation would repeal all sports wagering restrictions statewide.

In addition to likely resulting in mass deregulatory chaos, its effect would be to allow single-game wagering throughout the state. The leagues would assuredly challenge such a law in court.

Were that challenge to happen, there’s already public statements from lawmakers that the court, and the leagues, can use in a similar pattern to establish the true character of what New Jersey is trying to achieve.

“Right now this bill would wipe out everything,” said the bill’s sponsor, Assemblyman Ralph Caputo, speaking with the NJ Law Journal last month.

“That would allow anyone to open in [a betting operation] in a storefront,” he continued, adding that the state would need to find a way to “regulate” new operators. “Regulate” is not one of the verbs PASPA literally hinges on. But the state admitting it’s going to regulate sports betting could be interpreted as “operating” or “authorizing” sports betting, which PASPA prohibits. 

Caputo’s bill also contains a disclaimer identical to the one in the previous sports betting law that Judge Rendell invalidated. 

Tomorrow at Legal Sports Report: The Scope Of PASPA: Parsing The Intent Of The Federal US Sports Betting Law

Will Green
- Will formerly worked as a writer and producer at Sports Illustrated, where he covered the sports gambling and daily fantasy sports industries, and moderated several panels with industry experts on the future of gaming in America. He is now a contributor at SI, as well as Fortune.com, Legal Sports Report, and many other destinations. His weaknesses are wine, coffee and college football.
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