Sports leagues target New Jersey sports betting law
Yesterday several sports leagues and the NCAA filed a civil action in federal district court in New Jersey against the state’s governor, Chris Christie, and other state officials. The complaint seeks to prevent New Jersey’s implementation of its sports betting regime (permitting sports wagering at licensed casinos and racetracks within the state), passed earlier this year. The New Jersey legislation, say the plaintiffs, violates the Professional and Amateur Sport Protection Act (PASPA). A copy of the complaint is here.
There are so many angles to this lawsuit, to the New Jersey regulations, and to PASPA that it’s hard to know where to begin. As reported in the press in the past 24 hours, the reaction of state and federal legislators in New Jersey has basically been: “bring it on.” On Twitter, there were some initial and articulate comments by Marco Valerio (@AgentMarco), Vin Narayanan (@casinocityvin), Brad Polizzano (@taxdood), and Joe Brennan (@joebrennanjr). (Separate and apart from the lawsuit and PASPA, if you’re not following these guys already, you should be.)
There was also a very good post by @Grange95 over on his blog yesterday. In it, he skewers the bad faith and casuistry of the sports leagues that seemingly allows them to try to thwart legalized sports betting in the US when that very wagering is, in his words, a cornerstone of their success. I’m largely in agreement with the policy arguments against PASPA and in favor of New Jersey’s present course on sports betting, in no small part because a very small number of states and their sports betting regimes were grandfathered in under PASPA while the rest of the states were effectively shut out.
The problem is that the issue brought forward by the plaintiffs is a legal one, not a policy one. These factors and others are clearly important to determining how far the states can go in allowing and regulating sports wagering, But the fundamental question raised by this action is whether PASPA is a valid exercise of federal power. Whether one agrees with the policy behind the law or not, does Congress have the right to regulate sports betting as it has under PASPA?
The answer to that question is beyond this blog post, and I’m sure that much will be said and written about the constitutional merits in the coming months, in any event. The answer, when it does come, will be interesting. It seems to me that the federal government has a legitimate basis for acting under the Commerce Clause of the Constitution and that the law does not commandeer the states in a way that offends the Tenth Amendment, but sports and entertainment attorney @DarrenHeitner disagrees; he thinks that PASPA is vulnerable on a Commerce Clause and on a Tenth Amendment claim. You can take a look at Darren’s very useful and good article on the PASPA constitutional issues here. Other constitutional claims may be asserted and will need to be addressed. A counterpoint to Darren’s piece is an article by Jason Ranjo in the Rutgers Law Journal here.
I would note that the Third Circuit has applied PASPA to invalidate an earlier attempt by Delaware to expand its lottery offerings. That decision (OFC Comm Baseball v. Markell) is here. While the court suggested that PASPA had altered the usual constitutional balance between the federal and state governments with respect to sports betting, it did not specifically and expressly address the constitutional questions around whether the federal law is intra vires Congress.
One issue that struck me as deserving some attention is the question of ripeness. Ripeness is one of several doctrines used by the federal courts to establish limits on the federal judicial power; among other things, a case must be “ripe” for determination when it comes before the court, i.e., that the plaintiffs will suffer hardship if the court does not act now and that the record before the court is fit for review. In this case, the plaintiffs acknowledge in paragraph 25 of the complaint that sports gambling can’t commence in New Jersey unless and until applicable regulations have been proposed and become effective. The complaint also states that applications for licensure won’t start to be accepted until the Fall. Much is made in the complaint of the fact that allowing New Jersey to go ahead will irreparably harm professional and amateur sports, so the question might become, essentially, whether this is the right time to seek declaratory and injunctive relief. Have the NCAA and the sports leagues suffered injury already or will they clearly be harmed if the case is not reviewed now? I tend to the view that, as licences have not even been issued yet — indeed, the regulations have not been finalized or any applications accepted — the ripeness requirement may not be met here. Then again, the court may find that it has everything it needs before it now to consider the merits. (As @taxdood pointed out yesterday, the court may raise the ripeness issue itself, even if the defendants do not an want to proceed to argue the merits.)
So, as with the sports betting file as it has rolled forward to date in New Jersey, continue to watch and see what happens. This action by the NCAA and the sports leagues is a small but important part of the betting policy puzzle being assembled in the Garden State.