[toc]WASHINGTON, DC — Did the odds of having legal sports betting in the US get better or worse on Monday, after the nation’s top court considered the constitutionality of a federal ban on sports gambling?
It appears like the state of New Jersey will get a good sweat out of its bid to legalize sports wagering, based on the justices’ questions. Several of the justices took avenues actively questioning the case against New Jersey, including Chief Justice John Roberts.
Backstory of the case
The justices listened to an hour of oral arguments Monday morning. On one side was the state of New Jersey — Gov. Chris Christie‘s name appears on the case — which has been actively trying to partially repeal its own state-level prohibition on sports betting.
On the other side are the NCAA and the major professional sports leagues in the US — the NFL, NBA, NHL and Major League Baseball. They have successfully argued, in the lower courts, that the Professional and Amateur Sports Protection Act prevents NJ from doing so. PASPA is the federal law that prohibits single-game sports wagering outside of Nevada.
The core issues in the case:
- Whether PASPA is constitutional in how federal law interacts with state law.
- If New Jersey’s partial repeal of its sports betting prohibition — allowing sports wagering at the state’s casinos and racetracks without governmental regulation — is legal if PASPA remains on the books as constitutional.
New Jersey and other legal analysts have long argued PASPA commandeers it into acting on the federal government’s behalf.
Who wins on sports betting?
The case now comes down to whether at least five justices agree with New Jersey’s stance that PASPA should be struck down as unconstitutional.
Based on the oral arguments on Monday, several expressed skepticism of PASPA and its constitutionality in their questioning of attorney Paul Clement, representing NCAA et al.
Those justices included Roberts, and justices Anthony Kennedy, Stephen Breyer and Neil Gorsuch. That’s not to say that they are definitively voting on NJ’s side, as listening to questions in court is largely reading tea leaves. But that was the tone coming from at least these four justices, along with Samuel Alito.
Those five would represent the majority needed to win, with possibly Clarence Thomas also voting with that majority.
Here is a story from the Associated Press, similarly projecting that a majority of the justices seemed to side with NJ.
What legal observers are saying
Here’s a look at what some of the people in the room felt after witnessing oral arguments.
Inside oral arguments
Most of the hour-long discussion between counsel for NJ, the leagues, the US solicitor general and the nine justices focused on whether PASPA forces states to act on behalf of the federal government.
Ted Olson, the lawyer for New Jersey, hammered away at PASPA being an unconstitutional law that commandeers or conscripts states to policesports betting for them. PASPA, he argued, does not ban sports wagering at a federal level, it just tells states what to do. Again and again, he hammered away at the intent of PASPA, from its very language, prohibits sports wagering only as a function of state law.
This is an argument it appeared that many of the justices found compelling, as they questioned Clement along these lines. Several questioned how PASPA does not force states to act on their behalf, especially if New Jersey can’t partially repeal its own law.
To commandeer or not to commandeer?
Near the end, Breyer tried to sum up everything succinctly in questioning deputy solicitor general John Wall:
BREYER: …there is no federal policy against authorizing sports gambling but for a federal policy that says a state can’t authorize sports gambling, and that is to commandeer. Have I got that right?
WALL: I think that is their argument, but I think it doesn’t make sense… If this Court finds that to be a latent commandeering violation, the government would respectfully submit it’s going to spend an awfully long time figuring out how to unblur the clear line between preemption and commandeering.
He then specifically asked Olson if he got the argument right, from his perspective.
Does PASPA regulate or not?
Justice Elena Kagan — who seemed to be one of the justices most dubious of New Jersey’s case — was eager to draw a line on whether PASPA was a regulatory law that is preempting state law instead of commandeering it:
KAGAN: I guess what I’m asking, Mr. Olson, is you’re suggesting that the federal government, in order to preempt state activity, has to itself enact some kind of comprehensive regulatory scheme; and the question is, you know, how — what would we be looking for if that — if that were our test?
When do we know that they’ve enacted a sufficiently comprehensive regulatory scheme in order to allow preemption of state rules?
OLSON: The only thing that I would say in response as a predicate to answering your question is that when you say “sufficiently comprehensive,” to the extent that the state — the federal government, Congress, has taken responsibility to regulate in that field, once it has done so, it can then preempt, under the Supremacy Clause, inconsistent or contradictory state laws. But the Supremacy Clause is where this preemption all comes from.
Ruling more narrowly on NJ
While justices were often questioning the constitutionality of PASPA, it’s unwise to discount other possible outcomes.
One of those would be New Jersey winning not on constitutional grounds, but instead that its partial repeal passes muster under PASPA.
Under this line of thinking, New Jersey’s “partial repeal” could take effect, and sports wagering could be offered at the casinos and tracks in the state, and PASPA could still stand. This would take place, hypothetically, without New Jersey’s government being involved in direct regulation of sports wagering.
Again, this is one possible outcome; it’s difficult to know what exactly the justices will opine when the verdict eventually comes down.
What we didn’t hear
The court did not talk about equal sovereignty during oral arguments. That was the idea that PASPA treats states differently, in that Nevada sports betting and limited forms of wagering in other states are not allowed in others. Some thought this could have been a reason SCOTUS took the case.
The fact that attorneys were not questioned on this matter makes it unlikely that the case is resolved on equal sovereignty grounds.
The full repeal?
Interestingly, Roberts brought up the possibility of doing a full repeal of NJ’s sports betting law — aka the “nuclear option” in discussing it with Wall. That led to this interesting back and forth.
ROBERTS: What if the repeal — what if the repeal is across the board, no exceptions?
WALL: If New Jersey just repeals its prohibitions, we have said we don’t have a problem with that.
ROBERTS: Well, is that serious? You have no problem if there’s no prohibition at all and anybody can engage in any kind of gambling they want, a 12-year-old can come into the casino and — you’re not serious about that.
WALL: I — I’m very serious about it, Mr. Chief Justice….
What’s next for NJ sports betting?
Of course, New Jersey has lost at every stop along the way in both district court and the Third Circuit Court of Appeals. A majority of the court would have to side with New Jersey after it has failed to convinced judges at lower levels.
We won’t know the answer of how the court will find until sometime in the first half of 2018, when the court will render its decision. A victory for New Jersey in which PASPA is found to be unconstitutional could lead to a rapid of expansion of legal sports wagering across the US.
A New Jersey loss would result in the status quo, in which offering single-game wagering remains illegal in 49 our of 50 US states, despite the fact that most Americans can easily place wagers at a variety of offshore sportsbooks, to the tune of hundreds of billions of dollars.
The possibility of Congress acting still looms — either by eliminating PASPA or by replacing it with some sort of federal regulation. Rep. Dina Titus of Nevada was the latest member of Congress to ask for hearings on sports wagering; read her letter here.