Sports Betting Myth Busters: PASPA Is Part Of A Federal Framework Of Gambling Laws

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Editor’s Note: The US Supreme Court is currently deliberating the constitutionality of the partial federal sports betting ban embodied in the Professional and Amateur Sports Protection Act (PASPA). In a three-part series, Legal Sports Report takes a “myth buster” approach and probes several oft-mentioned aspects of PASPA. 

 This third installment in the series explores whether PASPA is merely one component of a broader framework of federal laws that preempt state regulation of sports gambling.  Part one of the series is here.  Part two is here.

Since November 2014, NBA commissioner Adam Silver has trumpeted the need for a “federal framework” for sports betting regulation nationwide, implying that there is no such framework now.

Major League Baseball commissioner Rob Manfred said such an approach sounded like “a pretty good idea” a few months later when speaking at the 2015 MIT Sloan Sports Analytics conference.

At the same time, Paul Clement — the lawyer hired by the NBA and Major League Baseball (along with the NCAA, NFL and NHL) to handle the pending US Supreme Court case — repeatedly argued that PASPA was just one part of the existing federal policy comprised of a web of laws that preempt state efforts in regulating sports betting.

Can the two positions be reconciled?

Not really.

A review federal statutes cited by Clement reveals that the other laws defer to states, accommodating different state policies on sports gambling. Only PASPA prohibits state lawmaking efforts by freezing them in place.  

Why the distinction matters

The words “preempt” and “preemption” were mentioned no fewer than 50 times at last month’s hour-long Supreme Court oral argument.

The focus on whether PASPA lawfully preempts New Jersey law or unconstitutionally commandeers Gov. Chris Christie is at the heart of the case.  

Clement has described PASPA as “unproblematic” and “commonplace.” And to make his description of PASPA stick, he has to position PASPA as merely one component of an overall federal policy in the sports betting field.  That is why Clement told Chief Justice John Roberts that it was necessary to look at other federal laws when “interpreting PASPA.”  

“[That’s] a very odd way to phrase something,” replied Chief Justice Roberts.

What other federal laws are at play?

“Congress has long recognized and sought to contain the harms that flow from various forms of gambling,” wrote Clement in his final court filing before the December 2017 oral argument in the Supreme Court case.

Clement then proceeded to flag four statutes as illustrative of the federal patchwork impacting sports wagering along with PASPA:

However, the four federal laws Clement highlighted differ markedly from PASPA in one critical respect: each defers to state law in some way. None of the four freeze state law in place forever like PASPA by prohibiting state lawmaking in the area of sports gambling.

Take the Sports Bribery Act, for example. The law makes it a federal crime to fix or attempt to fix any sports contest via bribery, but simultaneously declares that “this section shall not be construed as indicating an intent on the part of Congress to occupy the field in which this section operates to the exclusion of a law of any State.”

As an additional example, look at UIGEA. UIGEA generally bars payment processors from facilitating transactions involving illegal betting. But UIGEA’s rule of construction makes clear that “no provision of this subchapter shall be construed as altering, limiting, or extending any…State law…prohibiting, permitting, or regulating gambling…”   

Other views in accord

Noting the substantive difference between PASPA and the other federal laws that potentially touch upon sports gambling has deep roots.

“Congress might well adopt a comprehensive Federal scheme of gambling regulations, which could have the effect of preempting the field,” concluded a comprehensive report submitted to Congress in 1976.  “Congress has never expressed this intention; indeed, three of the Federal gambling statutes contain explicit antipreemption provisions.”

Two of the three laws analyzed in the report to Congress were the same statutes referenced by Clement.

The Department of Justice recently highlighted the apparent vacuum too.

“Congress did not adopt comprehensive regulations on sports gambling,” wrote Solicitor General Noel Francisco in an October 2017 brief filed with the Supreme Court.

Francisco submitted the federal government’s brief in support of the five sports leagues who initiated the PASPA lawsuit against New Jersey, but the DOJ’s position on this issue runs counter to the argument put forth by Clement.

Next steps for a one-size-fits-all approach

If Silver’s push for a federal framework to regulate sports wagering is premised on the lack of any current regulatory framework from Congress, his position is on solid ground.

Even Ted Olson — Gov. Christie’s attorney — has repeatedly acknowledged Congress’ power given the void, an argument that supports Silver’s apparent future plans.

“Congress may regulate interstate commerce directly, but it may not regulate states’ regulation of interstate commerce,” said Olson at last month’s SCOTUS oral argument.  “PASPA is a direct command to the states without any effort to regulate sports wagering.

“If [Congress] does regulate that field, which Congress has not chosen to do in this case, it then can preempt inconsistent state laws.”

All of this could lead to a deeply ironic result in the not-too-distant future.

If the NBA and the other sports leagues win the pending Supreme Court case, Clement’s arguments will have been validated and future lobbying efforts to alter the status quo will likely be more difficult.  

However, if Clement’s argument fails and New Jersey prevails in the case, the push for a federal framework to address sports betting nationwide will probably encounter considerably less resistance.  

Such is the paradox that is PASPA.