Sports Betting Wars, Jersey Style
In August, four professional sports leagues and the National Collegiate Athletic Association (NCAA) sued in New Jersey federal court to stop that state from launching sports betting at the state’s pari-mutuel facilities and in Atlantic City casinos. The Complaint in National Collegiate Athletic Ass’n v. Christie, No. 3:12-cv-04947-MAS-LHG (D.N.J), alleges that the state effort, based on legislation enacted in January, violates the Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. §§ 3701 et seq. The state has vowed to proceed with sports betting after December 1.
Adopted in 1992, PASPA barred sports betting for all but a few specific states, and then only if they actually offered such wagering within a year of the law’s enactment. The Complaint insists that since New Jersey has never before had sports betting, it cannot start offering such wagering now. To win a preliminary injunction, the leagues argue that legalized betting on their games will raise the risk of point-shaving and other corrupting influences.
The initial courtroom battles have been over largely procedural issues. In its motion to dismiss the Complaint, the state argued that the sports leagues do not have standing to challenge PASPA and that they can never prove the “irreparable injury” required to earn a preliminary injunction. With the illegal sports betting market estimated at $380 billion, and with some states offering forms of legalized sports betting (Nevada, Montana, Oregon, North Dakota, and Delaware), the state argues that any additional betting volume in New Jersey will have a negligible impact on the risk of corruption in the athletic contests. Moreover, since the corrupt individuals would be employees of the leagues (players and coaches), the state asserts that the leagues themselves would be responsible for any corruption.
This is the third recent lawsuit over PASPA in the mid-Atlantic states. In a 2009 faceoff, the leagues successfully limited the range of sports betting that Delaware could offer as part of its state lottery. The U.S. Court of Appeals for the Third Circuit held in Office of Commissioner of Baseball v. Markell, 279 F.3d 293 (3d Cir. 2009), that the state could offer only parlay bets involving three or more National Football League (NFL) game outcomes.
In addition, New Jersey State Senator Raymond Lesniak led a constitutional challenge to PASPA, but the action was dismissed in 2011 as premature since the state had no sports betting law in place at the time. In the current lawsuit, the state could pose the constitutional claims the court never reached in that case: that PASPA violates the Commerce Clause by favoring some states over others and that it intrudes on powers reserved to the states by the Tenth Amendment. Interactive Media Entertainment & Gaming Ass’n v. Holder, 2011 U.S. Dist. LEXIS 23383 (D.N.J., March 7, 2011).
