Supreme Court Takes on Sports Betting and Federalism

United States Supreme Court Takes on Federalism and Sports Betting

            Studies estimate that millions of Americans illegally bet as much as $150 billion annually on sports events, a sum exceeding the gross domestic products of nations such as the Ukraine, Ecuador, and Vietnam, as well as the combined revenues of Microsoft, Goldman Sachs, and McDonald’s.[1]

            In December 2017, the Supreme Court heard oral arguments in Christie v. NCAA, a case where New Jersey seeks to partially legalize sports betting under state law. On the other side, are the NCAA and the four professional United States sports leagues, the NBA, NFL, NHL, and MLB.

            In 1992, New Jersey Senator Bill Bradley, sponsored the Professional and Amateur Sports Protection Act. Congress passed the Act to preserve the integrity of sporting events. The Act makes it unlawful for “a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact…a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly, on one or more competitive games in which amateur or professional athletes participate, or are intended to participate…”[2] The Act exempted Nevada from the law and Delaware, Montana and Oregon were allowed to keep previously authorized sports lotteries.[3]

            Thirty years later, in 2012, New Jersey enacted legislation that legalized and regulated sports betting. The Leagues sued, and courts found the Professional and Amateur Sports Protection Act constitutional and that the state law legalizing sports betting violated the Act. In 2014, the New Jersey legislature passed a new, narrower, law allowing sports betting at New Jersey racetracks and casinos for people age 21 and older.[4] Again, the Leagues sued New Jersey to prevent it from going into effect, and the US Court of Appeals for the Third Circuit found that this law also ran afoul of the federal law.[5]

            The United States Supreme Court agreed to hear the case, Christie v. NCAA, in June 2017. The primary issue is whether the federal government, through enforcement of the Act, is commandeering and forcing states to adopt a stance on sports betting, which could be unconstitutional on federalism grounds.

            New Jersey claims that Act violates states’ rights. Our system is grounded in the bedrock principle of federalism that state governments and the federal government operate in tandem and respect one another. New Jersey contends that Act is unconstitutional because it violates the Tenth Amendment, which reads, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”[6]

Under this Amendment, Congress and the federal government may not compel the states to require or prohibit certain activities, a rule known as anti-commandeering. This anti-commandeering doctrine arose out of New York v. United States, a Supreme Court case that analyzed federal laws addressing how states dealt with low-level radioactive waste. The Court struck down federal laws requiring New York to take ownership of the waste or regulate the waste according to federal government instructions,[7] finding it inconsistent with the Tenth Amendment. In its opinion, the Court reasoned that the Constitution doesn’t give Congress the power to require states to govern and act according to Congress’ instructions. If the federal government could command the states to govern, it would be incompatible with the constitutional system of dual sovereignty.[8]

New Jersey argues that like the law in that 1992 case that commandeered states to regulate low-level radioactive waste, The Professional and Amateur Sports Protection Act commandeers states to police sports betting and prohibit it. New Jersey’s position is that Congress is preventing states from changing laws to fit their needs and effectively commandeering state resources to enforce a policy that a state may not favor.  

            The Leagues counter that the Act doesn’t commandeer and force the states to follow a course of action. Legislative history reveals that the Act’s purpose is to “keep sports gambling from spreading.” Under the Constitution’s Supremacy Clause, which provides that federal law is the “supreme law of the land,”[9] New Jersey is pre-empted from taking any action that would go against the federal law. In an amicus curie brief (which are briefs filed by non-parties who wish to weigh in on a case), Principal Deputy Solicitor General Jeffrey B. Wall wrote, “Congress may not require States to enact or maintain federally prescribed regulations. But it may, and routinely does, prohibit States from adopting laws that conflict with federal policy.” His position is that prohibiting a state from adopting a law is constitutional. So, unlike the law in question in the New York case, when Congress unambiguously required the states to take affirmative action with how they handled radioactive waste, the sports betting act doesn’t compel states to enact, maintain, consider, or enforce state-law prohibitions on sports betting.

            Robert Mikos, a professor at Vanderbilt University Law School, said, “Christie v. NCAA is probably the most important federalism case on the court's docket this year. It will have ramifications far beyond the confines of sports gambling in New Jersey and it could impact a broad range of other policy domains where the states are rolling back preexisting prohibitions in the shadow of stricter federal laws.”[10] Sports law analyst Andrew Brandt commented immediately after the completion of oral arguments, tweeting, “Hard to read tea leaves but initial impression: a good day for the future of sports betting in New Jersey and perhaps, other states behind them.”[11] Based on what occurred on Monday, several Supreme Court justices, including Chief Justice John Roberts, commented and asked questions that demonstrated skepticism of the Professional and Amateur Sports Protection Act and its constitutionality.[12] We won’t know if the Court will declare PASPA unconstitutional for a few months, but advocates for legalized sports betting feel as if they’re in the red zone and are about to pull off an upset.