With estimates of illegal sports betting in New Jersey going as high as $10 billion per year, it’s not hard to understand why the state has been fighting tooth and nail to get a big piece of the action—by legalizing sports betting at its casinos and racetracks. The 15 percent tax on those billions could significantly swell the state’s coffers, with all of those proceeds going to disadvantaged citizens.
The only problem has been the pesky lawsuits filed by the NCAA (which was joined by several professional sports leagues and the federal government) that so far have derailed the state’s plans. But that may be changing with the U.S. Supreme Court about to weigh in on the issue.
It all started back in 2012 when Chris Christie was governor. The New Jersey legislature passed, and Christie signed, a bill allowing sports betting in the state’s casinos and racetracks. The NCAA and others quickly mobilized and sued, arguing that the new statute violated a federal law, the Professional and Amateur Sports Protection Act (PASPA), which made it illegal for a state to “sponsor, operate, advertise, promote, license, or authorize by law” sports betting. The NCAA and company argued that New Jersey was “authorizing” sports gambling and that this would threaten the integrity of the sports being bet on.
Early in 2013, U.S. District Court Judge Michael Shipp sided with the NCAA. New Jersey appealed, but lost. Christie tried to get an appeal heard by the U.S. Supreme Court, which declined to hear the case (as it does in the vast majority of cases). It appeared that legalized sports betting was dead in New Jersey.
But then in 2014 the New Jersey legislature came up with an ingenious way to legalize sports betting that was designed to circumvent the PASPA problem. Instead of making a new law to allow sports betting (which might be construed as authorizing), they simply wrote a statute that repealed prohibitions against sports betting—but only in casinos and racetracks.
Once again the NCAA and company sued, arguing that the new legislation once again was illegal because it conflicted with the intent of PASPA. New Jersey argued that repealing old statutes affecting gambling wasn’t the same as creating new ones that specifically allowed betting. Further, Jersey suggested that PASPA itself was in violation of the 10th Amendment of the Constitution, which states that the federal government cannot force state legislatures to enact laws or require states to enforce federal laws, practices which the Supreme Court has in the past has labeled “commandeering.”
And once again Judge Shipp sided with the NCAA and was upheld by the appeals court.
But then something interesting happened. Christie and New Jersey appealed to the Supreme Court and the court agreed to review the case.
It’s clear that the new version of New Jersey’s sports gambling law and the federal government’s objection to it had caught the Supreme Court’s attention. For, if the federal government can prevent New Jersey’s repeal of gambling laws, it might also be able to stop states from repealing other laws, such as those pertaining to guns, marijuana and discrimination.
PASPA “is a weird federal law that instead of directly banning sports betting, prevents states from legalizing it,” said Ilya Somin, a constitutional law specialist and a professor of law at George Mason University. “The bottom line here, is this is an attempt by the federal government to make an end run around the usual constitutional restrictions that forbid the federal government from forcing states to ban things.”
Indeed, New Jersey argued that it was all over reach on the part of the federal government. And from the questions being asked by the Justices, during oral arguments back in early December, it was clear that this was something they were considering.
Justice Stephen Breyer, after noting that there is no federal law prohibiting sports betting, said PASPA was “telling the states what to do,” and that, he said “falls within commandeering.”
Justice Anthony Kennedy suggested that if PASPA prevents New Jersey from repealing its sports betting laws, then New Jersey citizens are forced by the federal government to obey state laws they object to. And that, Kennedy said, “falls within commandeering.”
Figuring out which side of the issue the Supreme Court will come down on based upon the questions the Justices ask may be like trying to read tea leaves, but Somin suspects that New Jersey will prevail. “The argument that New Jersey is making I think is right,” he said. “And while you can never be completely certain how it will come out, I would be very surprised if the federal government won.”
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