Brief In NJ Sports Betting Case: Leagues Have ‘Weaponized PASPA’ To Stop Wagering

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PASPA Weapon sports betting

The first amicus brief has arrived in the New Jersey sports betting case in front of the US Supreme Court, and it contains plenty of fodder to ponder.

Florida State associate professor Ryan Rodenberg argues for neither the state nor the plaintiffs — the NCAA and the pro sports leagues — in the brief. He does not say that the whole of the Professional and Amateur Sports Protection Act should be found constitutional or unconstitutional. Instead he contends that just distinct parts of the federal sports betting ban and the lower courts’ rulings should be struck down.

In particular, Rodenberg, an expert in sports gambling law, says that the leagues shouldn’t have the enforcement power that PASPA provides them with, and that states shouldn’t be grandfathered out of the law.

“Two PASPA-specific features — PASPA’s offloading of regulatory authority to private entities and PASPA’s unequal treatment among the States — raise constitutional issues,” Rodenberg wrote.

The brief is the first in what is likely to be a series of such filings from interesting parties in the case that has a chance to drastically alter the landscape for  sports betting in the US.

Why do the sports leagues have all the power?

Rodenberg questions why PASPA hands over regulatory power to the leagues in a manner he sees as unconstitutional, under the private nondelegation doctrine.

The way PASPA regulates — as demonstrated in this case with the Federal Government absent as a litigant and only Respondents furthering the PASPA claims against Petitioners — is by outsourcing a form of privatized regulatory power for unilateral use against the States. … Such a regulatory apparatus violates the private nondelegation doctrine.

This passage encapsulates it quite nicely:

What if Congress banned certain States from enacting or amending a minimum wage law and delegated follow-up regulatory efforts — via civil litigation seeking injunctive relief against state officials trying to boost wages among hourly workers — to private fast food companies who oppose high minimum wages? Or, what if Congress prohibited the vast majority of States from enacting laws to address hydraulic fracturing, with private oil and natural gas companies statutorily deputized to sue governors who signed fracking legislation?

Such hypotheticals seem absurd, but both mimic how PASPA operates in the sports wagering context. In this case, five sports leagues who claimed to have an anti-sports gambling stance twenty-five years ago have now weaponized PASPA to prevent some States from enacting certain forms of sports betting legislation.

How would the court go about fixing it? By taking that power away from the leagues.

Stop the grandfathering

The issue of equal sovereignty is one many expect to come up when SCOTUS hears the case, so Rodenberg isn’t alone on this front. The problem: PASPA, quite simply, doesn’t treat states the same, and there’s no good reason that it doesn’t:

First, PASPA differentiates favored grandfathered States and non-grandfathered States, with the latter completely barred from legalizing sports betting within their borders. Second, Nevada is treated more favorably than some of the other exempted States. Both tiers of state-level distinctions violate the equal sovereignty doctrine.

Rodenberg identifies nine states that theoretically have some sort of grandfathered status under PASPA. Nevada sports betting, of course, is the only example of legal single-game wagering.

Where Rodenberg’s analysis diverges is that he sees a case for the court ruling that Nevada shouldn’t be the beneficiary of the grandfathered status. This was also the subject of an academic paper penned by Rodenberg.

The daily fantasy sports issue?

Also in the brief, Rodenberg goes on to paint a scenario involving daily fantasy sports that could manifest if the broad injunctive relief given by the district court in the NJ case isn’t fixed.

Whether you believe DFS is a form of sports betting or not, there’s at least an argument that PASPA could be used against DFS laws, if SCOTUS doesn’t act:

With three of the Respondents owning equity interests in daily fantasy sports companies, certain plaintiffs in this case could become PASPA defendants in future cases under the portion of PASPA § 3702(2) that attaches to private sports-betting-related activities conducted “pursuant to the law or compact of a governmental entity.” 28 U.S.C. § 3702(2).

The lower court’s expansive reading of injunctive relief available via § 3703 invites other sports leagues to sue under PASPA as a means to further their own self-interested regulatory efforts. Likewise, sports leagues who have moved past any Semmelweis reflex and are now supportive of legalized sports betting — a growing group that includes one of the Respondents — will be incentivized to file “reverse PASPA” lawsuits in an effort to undo sweeping injunctions secured by other sports leagues in various jurisdictions.

The leagues and New Jersey are hoping for different outcomes

While Rodenberg is advocating for a narrow court ruling, it’s clear the plaintiffs and the defendant are hoping for a more sweeping finding from SCOTUS.

The NCAA and the pro leagues hope the court finds PASPA to be constitutional, and the status quo prevails. New Jersey hopes to show that PASPA violates the Tenth Amendment (states’ rights) or that the equal sovereignty doctrine is employed to allow any state to offer sports betting moving forward.

Who is right, and who will SCOTUS side with? Those are questions we can ponder until the case is finally resolved sometime in 2018.