By John Brennan
November 25, 2016
Five state Attorneys General, the American Gaming Association, the Cato Institute, and a sports law professor are among those who have filed “amicus” briefs backing New Jersey’s request to the U.S. Supreme Court to take up its so-far-unsuccessful effort to either have a 1992 federal ban on most sports betting in the U.S. found unconstitutional or to allow the state to repeal its gambling laws to leave the door open for privately-run sports betting at state racetracks and casinos.
(You may have read one or all of these in four separate blog posts at the old link for Meadowlands Matters. This is a one-post roundup that migrates the info to the new site.)
Five states – West Virginia, Louisiana, Arizona, Mississippi, and Wisconsin – have filed an “amicus” brief to the U.S. Supreme Court in a bid to bolster New Jersey’s chances of being heard on their six-year sports betting saga.
“The question presented is: Does PASPA’s prohibition on States repealing existing laws banning sports wagering commander the regulatory authority of the States, in violation of the Tenth Amendment?”
[PASPA being the Professional and Amateur Sports Protection Act of 1992, of course.]
The states say this case must be reviewed because “the Third Circuit’s split en banc decision below conflicts with two lines of this Court’s precedent concerning federal-state relations. In upholding the Professional and Amateur Sports Protection Act, the Third Circuit radically expanded the doctrine of federal preemption by holding that Congress may forbid the States from repealing their existing laws without affirmatively setting forth a federal regulatory or deregulatory scheme. In addition, the Third Circuit disregarded this Court’s anti-commandeering jurisprudence by requiring state legislators to maintain, and state executive officials to enforce, laws that would otherwise have been repealed.”
“The concern of Amici States — the States of West Virginia, Arizona, Louisiana, Mississippi, and Wisconsin—is not what Congress regulates but how it does so. Even where it has Article I authority to act, Congress may not force the States to act as the vehicle for implementing federal policy and thereby shift to the States political accountability for its actions.”
“Importantly, Amici States take no position on the wisdom of the state and federal sports wagering laws in this case. Some States may support the expansion of sports betting, while others oppose it. Amici States file this brief because they agree that the Third Circuit’s decision raises serious federalism concerns for all States.”
“If permitted to stand, the Third Circuit’s decision threatens the constitutional balance of power between States and the federal government. This Court’s review is needed to reinforce the proper line between permissible preemption and impermissible commandeering.”
Another day, another sports betting “amicus” brief backing New Jersey in its six-year-old effort to have racetracks and Atlantic City casinos empowered to offer Las Vegas-style sports betting if they choose.
Here are some of the highlights:
“The AGA is particularly concerned with the prevalence of illegal sports gambling in the United States, much of which takes place undeterred by the failed Professional and Amateur Sports Protection Act (PASPA)…”… rather than reduce sports betting, PASPA has simply allowed it to flourish underground, benefiting criminal elements and creating a thriving black market. …. Since PASPA’s enactment, trillions of dollars have been wagered illegally on sporting events. In the last Super Bowl alone, $4.2 billion was wagered, and 97% of those bets were made illegally. Much of this revenue generated by illegal sports gambling is used to fund organized crime and other illicit activity, such as drug and human trafficking, money laundering, and racketeering.
“The AGA — like the majority of sports fans and many leaders in law enforcement — believes it is time to reexamine the nation’s outdated sports-betting laws.”
“The fundamental legal question presented by these petitions is whether a federal court can, consistent with federalism and dual sovereignty, enjoin a State from passing a law that neither violates the Constitution nor addresses any matter preempted by federal law. The Third Circuit’s conclusion that federal courts have this unprecedented power is irreconcilable with this Court’s well-established anti-commandeering jurisprudence, and severely detrimental to state efforts to combat sprawling black markets for illegal sports gambling.”
“Not only is PASPA unconstitutional; it deprives States of vital tools needed to combat the thriving and violent black market for illegal gambling. As construed by the Third Circuit, PASPA forces States to maintain laws that were unwise in 1992 and are dangerously outdated today. This creates at least four significant problems:
“First, the Third Circuit leaves in place an unconstitutional law that has enabled a violent and expanding black market…..
“Second, the Third Circuit’s decision forces States to ignore the growing public consensus in favor of re-forming outdated sports-betting laws….
“Third, replacing PASPA’s top-down mandate with state-by-state regulation will benefit consumers, law enforcement, professional and amateur sports, and local communities…”
“Finally, the Third Circuit’s decision will deter other States from updating their sports-gaming laws. The Third Circuit’s en banc decision creates substantial uncertainty regarding what — if any — reforms to state law PASPA permits…”
I. PASPA FORCES STATES TO ENFORCE A FAILED FEDERAL PROHIBITION ON SPORTS BETTING.
“The Act enshrines a federal policy that, with a few grandfathered exceptions, makes sports betting illegal nationwide. But, rather than enacting this policy directly as a matter of federal law, PASPA prohibits States from “sponsor[ing], operat[ing], advertis[ing], promot[ing], licens[ing], or authoriz[ing]” sports betting. As interpreted by the Third Circuit, PASPA not only prohibits States from enacting laws that authorize sports gambling; it forces States to maintain laws (and accompanying enforcement apparatuses) that prohibit the practice. Although the Third Circuit left open the possibility that some repeals or amendments may be acceptable, it gave no guidance to States on what those acceptable revisions may be.”
“Under the Third Circuit’s analysis, PASPA not only prevents the State of New Jersey from enacting laws that implement the policy preferences of nearly two-thirds of its citizens on these important issues; it commandeers the State legislature by forcing New Jersey to maintain state laws consistent with PASPA’s federal standard. Thus, PASPA places the New Jersey Code in a time capsule of sorts, to be opened only by some future session of Congress. Until New Jersey receives such congressional imprimatur, the State must keep on its books a law it no longer wants and take responsibility for a policy it wishes to abandon.”
“The Third Circuit’s contrary holding rests on the mistaken premise that PASPA does not commandeer state sovereignty because the law “does not command [the] states to take affirmative action.” In other words, the Third Circuit suggests that prohibiting a State from repealing existing legislation is constitutionally different from requiring a State to enact new legislation. But this is akin to saying that shackles are not a restraint because they do not require the wearer to walk.”
II. PASPA PREVENTS STATES FROM COMBATING ILLEGAL GAMBLING AND ORGANIZED CRIME.
A. PASPA Has Enabled A Thriving And Dangerous Black Market For Illegal Sports Betting.
“The Third Circuit’s decision is not just wrong; it is dangerous because it deprives States of the authority to combat illegal gambling.”
“Taking the $149 billion figure as a conservative estimate, the market for illegal sports betting in the United States last year was greater than the revenue of 491 of the Fortune 500 companies, and roughly equal to the combined revenue of Microsoft, Goldman Sachs, and Bristol-Myers Squib.”
B. Public Attitudes Have Shifted In Favor Of Legalized Sports Wagering.
“Dramatic changes in technology, professional sports, and public opinion have occurred since PASPA was adopted nearly a quarter-century ago. The Act does not address any of these changes, and does not give the States the flexibility they need to do so. In-stead, States are made accountable for antiquated federal policy.”
“To be sure, if Congress wishes to enact a law that runs contrary to the interests of the public, it may try to do so. But enforcement mechanisms are constitutionally significant. And what the federal government cannot do is pass the buck to the States, commandeer their enforcement apparatuses, and make them responsible for a policy they wish to eliminate.”
C. A Blanket Prohibition On Sports Betting Interferes With States’ Traditional Authority Over Gaming.
“By compelling States to enforce a federal policy on sports betting, PASPA deprives States of any flexibility to address the mounting evidence and an emerging consensus that legalized sports betting is a more effective way to combat illegal gambling and associated crimes than the total prohibitions maintained by many States under PASPA’s framework today. This is not only unconstitutional but highly unusual.”
D. The Third Circuit’s Decision Creates Uncertainty That Will Deter States From Attempting Popular And Necessary Regulatory Reforms.
“Conducting sports betting in the open will also permit local law enforcement to access vital information necessary to identify and prosecute match-fixing and organized crime. Gaming operators can “provide an early warning system” of “irregularities” that may be evidence of corruption. Law Enforcement Summit, at 6 (statement of Karl Bennison, Chief of Enforcement for the Nevada Gaming Control Board). For example, during the 2016 Australian Open tennis tournament, a legal sports book in that country identified an unusual amount of bets being placed on a mixed doubles match. This discovery led to allegations that a pair of tennis players purposefully lost their match as part of a gambling conspiracy. This scandal may have never been uncovered without the large amounts of data generated by lawful sports-betting operations.”
The Cato Institute and two similar organizations invoked the recent end to the Chicago Cubs’ long championship drought in making a proposal to the U.S. Supreme Court that the justices need to take up the sports betting case that has pitted New Jersey against five major national sports organizations.
“The scope of the anti-commandeering doctrine is an important question that should be resolved by this court,” the attorneys write.
Here is my summary:
“Can the federal government circumvent this Court’s commandeering cases, including New York v. United States, 505 U.S. 144 (1992), by prohibiting states from repealing their own laws that promote federal objectives, long after states and their voters have rejected them?”
The organizations making the filing are:
– the Pacific Legal Foundation, which “defends limited government, property rights, and free enterprise in courts nationwide.”
– the Competitive Enterprise Institute, which is “dedicated to promoting the principles of free markets and limited government.”
– the Cato Institute, a “nonpartisan public policy research foundation dedicated to advancing the principles of individual liberty, free markets, and limited government.”
“The question presented is not merely important for academic or doctrinal reasons. PASPA [the Professional and Amateur Sports Protection Act of 1992 that is at the core of the case] reaches a broad range of sports gambling, with significant economic and social impacts. States need clear guidance from this Court about their valid regulatory options so that they may determine how best to protect and promote the interests of their residents.”
“The federal government has plenty of options in its play book to address pressing issues without eroding the Constitution’s structural protections for federalism. It can directly regulate the activity itself and preempt contrary state regulation. It can give states a choice of cooperating or ceding an area to federal regulation. Or it can use its spending power under appropriate circumstances to entice states to cooperate. These approaches do not lead to the same problems because any state participation must be truly voluntary. But the federal government cannot simply command states to regulate their citizens in furtherance of federal policy.”
“The Third Circuit’s lack of guidance to states threatens state sovereignty and could lead to absurd results. As Judge Fuentes [who wrote the 2-1 majority opinion in the first case but was the dissenter in this more recent 2-1 ruling] asked in dissent, “[w]ould the State violate PASPA if it [first repealed all its existing prohibitions, then] later enacted limited restrictions regarding age requirements and places where wagering could occur?’ The unfortunate answer to Judge Fuentes’ question is that no one knows.
“Similarly, it is unclear whether the decision’s odd interpretation of “authorize” extends beyond state legislatures. May state law enforcement officials focus limited resources on investigating and prosecuting only certain types of violations — for instance, bets involving minors or bets placed outside casinos and race tracks—without “authorizing” other gambling? Given this Court’s insistence on clear rules where federal law intrudes on state sovereignty, the Third Circuit’s lack of guidance is troubling.”
“Rather than provide much needed clarity, the Third Circuit threw a curveball at New Jersey’s commandeering concerns. ….. Equally troubling, the court’s decision is not consistent with the principles underlying the anti-commandeering doctrine.
“Restricting the anti-commandeering doctrine to instances where Congress requires states to act undermines political accountability. Voters are just as likely to errantly blame state politicians, since the unpopular prohibition is imposed under state law. In either case, the public officials will be punished in subsequent elections, even though they would be powerless to change the policy.”
“The Third Circuit’s narrow interpretation of the anti-commandeering doctrine could impact far more than sports gambling. It creates a significant loophole in the doctrine that would allow the federal government to overextend its constitutional authority. This could fundamentally alter the relationship between the federal government and the states. For instance, the federal government could compel states to continue implementing education policies well after they have proven unpopular. Previously, the need to convince states to cooperate has given them significant leverage to influence federal policy. It could also require states to continue enforcing their current bathroom policies, whatever those may be.”
“Perhaps the most politically salient issue which this narrow reading of the anti-commandeering doctrine could affect is marijuana legalization. Numerous states have experimented with decriminalizing marijuana, despite the federal prohibition against possession and distribution. This state experimentation is only possible because “the federal government cannot require states to enact or maintain on the books any laws prohibiting marijuana.” But under the Third Circuit’s rationale, the federal government is free to stop this process in its tracks, by forbidding states from any further liberalization.”
Then the parallel topic of Daily Fantasy Sports, or DFS, enters the picture, with a footnote for Meadowlands Matters mainstay Daniel Wallach, the Fort Lauderdale, Fla.-based attorney.
“Since this market began in 2006, daily fantasy sports has generated approximately $3 billion in entry fees, from nearly 41 million players in the United States and Canada. Although nonexistent when PASPA was enacted, this fantasy gaming may be subject to the statute’s restrictions. If so, states may be hamstrung in their ability to regulate it effectively. If a state imposes some regulations on daily fantasy sports, will it run afoul of PASPA by impliedly “authorizing” the activity that’s allowed?”
“The judge’s role has famously been analogized to an umpire calling balls and strikes. In this case, the Court is being asked to define the strike zone against which federal laws that appear to commandeer states will be judged. This question is of immense doctrinal and practical importance. The boundary must be clearly defined if the anti-commandeering doctrine is going to continue to protect federalism and individual liberty. While it took the Cubs 108 years to win another World Series, this Court need not wait that long to clarify this important doctrinal area. The petition for certiorari should be granted so that this Court can resolve the issue and provide needed guidance to states and the lower courts.”
Ryan Rodenberg, a professor of sports law at Florida State University, has filed an “amicus” brief backing New Jersey’s case for prevailing in its legal battle on sports betting against the NFL, NCAA, NBA, MLB, and NHL.
Rodenberg makes two arguments:
I. The Professional and Amateur Sports Protection Act Unconstitutionally Delegates Regulatory Power to Sports Leagues in Violation of the Private Non-delegation Doctrine
II. The Professional and Amateur Sports Protection Act’s Grant of Injunctive Relief to Non-Litigant Third Parties is Unconstitutional Under Article III’s “Cases” or “Controversies” Requirement
Officially, Rodenberg is “an associate professor at Florida State University with a research focus on forensic sports law analytics.”
Referring to the Professional and Amateur Sports Protection Act of 1992 that is at the epicenter of this multi-year saga, Rodenberg writes, “The purported purpose of PASPA was “to prohibit sports gambling conducted by, or authorized under the law of, any State or other governmental entity.” PASPA also aimed to “keep sports gambling from spreading.” Through the empowerment of certain sports leagues and the inclusion of a number of exemptions, Congress left PASPA’s reach to be determined, at least in part, by sports league executives. As a result, some forms of sports gambling covered by PASPA have been challenged, while other types have been ignored. Congress could have opted for a uniform federal ban on sports gambling and sought to preempt any conflicting state law. Congress could have also left PASPA enforcement exclusively to the DOJ. But Congress selected neither option, pushing PASPA into unconstitutional grounds vis-à-vis the private non-delegation doctrine.”
“The Court has largely allowed Congress to delegate rulemaking power to other government actors. However, since Carter v. Carter Coal Co. (1936), the Court has made clear that delegation of regulatory power to private, non-governmental entities is prohibited as “denial of rights safeguarded by the due process clause of the Fifth Amendment.”
“Plaintiff Sports Leagues have sued under PASPA three times – once against Delaware Governor Markell and twice against New Jersey Governor Christie. In sum, PASPA gives sports leagues a substantial role in determining what types of sports betting are either legal or illegal. For these reasons, PASPA is unconstitutional vis-à-vis the private non-delegation doctrine.”
“With today’s technology-fueled revenue-generating gambling opportunities for sports leagues, New Jersey and the Plaintiff Sports Leagues are actual or potential competitors. Indeed, the Plaintiff Sports Leagues posited that they have a proprietary interest in “the degree to which others derive economic benefits from their own games.”
“While the five Plaintiff Sports Leagues were strong supporters of PASPA immediately prior to its enactment, one or more of them may now be experiencing buyer’s remorse. Shifting stances on the morality of sports gambling have played a role in PASPA’s uneven enforcement. More importantly, some sports leagues are increasingly viewing the massive sports gambling market as an untapped revenue source. For example, a majority of the Plaintiff Sports Leagues own equity stakes in consumer engagement-enhancing fantasy sports companies. Further, at least two of the Plaintiff Sports Leagues use a third party to sell betting-relevant real-time data to sports gambling operators overseas.”
On another front, this was indeed a confusing moment in 2014: “Uninvolved sports leagues should not – indeed, cannot – be subject to any injunction based on Plaintiff Sports Leagues’ alleged individualized harms. The Plaintiff Sports Leagues obtained injunctive relief under PASPA for their own “protection,” not for others. Nevertheless, the District Court granted a blanket injunction against New Jersey’s offering of sports betting tethered to all sporting events, even those unrelated to the Plaintiff Sports Leagues. This expanded PASPA’s scope beyond what is permissible under Article III.”
“The District Court’s broad grant of injunctive relief to non-litigant third parties is particularly troubling given that it occurred within the context of a motion for a temporary restraining order. Injunctive relief “should be no more burdensome to the defendant than necessary to provide complete relief to the plaintiffs.” The Plaintiff Sports Leagues never claimed that they would be harmed if an operator in New Jersey were to offer state law-compliant intrastate sports wagering on tennis, golf, race car driving, mixed martial arts, or any other sporting event unrelated to the narrow categories of sports associated with the five Plaintiff Sports Leagues. If the lower courts’ ruling is left to stand, the impact would be profound.”
“This case is about Congress’ ability to bestow sports gambling-related regulatory power under PASPA, not merely whether New Jersey law can be partially repealed to permit sports betting in certain venues. What amicus curiae presents here is an alternative to Petitioners’ arguments. Amicus curiae is focused on (i) Congress’ unconstitutional delegation of regulatory power to sports leagues (to determine what types of sports gambling are permissible under PASPA) in violation of the private non-delegation doctrine and (ii) the District Court’s unconstitutional grant of PASPA injunctive relief to non-litigant third parties in contravention of Article III’s “cases” or “controversies” requirement. The Court should grant the petitions for writ of certiorari.”