New Jersey: Supreme Court hears oral arguments concerning legalization of sports wagering

In early December, the United States Supreme Court heard oral arguments in two cases that the court consolidated, Christie v. National Collegiate Athletic Association and New Jersey Thoroughbred Horsemen’s Association, Inc. v. National Collegiate Athletic Association. The suits directly concern a law concerning sports wagering in New Jersey. But as is footnoted in the cert petition in the first case, others, including Delaware, Illinois, Indiana, Michigan, Minnesota, Mississippi, New York, Pennsylvania, South Carolina, and Texas, also have an interest in this issue because they, too, are contemplating legalizing sports wagering.

That said, the dispute ultimately centers on the relationship between federal and state governments as defined by the 10th Amendment of the U.S. Constitution. The amendment provides that 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.”

In the above-mentioned cert petition, which SCOTSUBlog posted on-line, the petitioners are challenging the Third Circuit’s holdings that the federal Professional and Amateur Sports Protection Act of 1992 (PASPA) “bars New Jersey not only from licensing sports wagering, but also from enacting legislation repealing its sports wagering prohibitions in casinos and at racetracks.” PASPA prohibits the states from authorizing sports wagering.

Petitioners argue that the problems with the Third Circuit’s conclusions are two-fold. First, the conclusions conflict with that Circuit’s own decision just three years ago, which held that “PASPA was constitutional precisely because it did not prohibit States from repealing prohibitions on such wagering and therefore left the States ample room to define their own regulatory policies with respect to that type of gambling.” As a result, “New Jersey now is compelled by federal law and federal courts to maintain state-law prohibitions that its elected officials chose to lift.”

Second, according to the cert petition, the Third Circuit’s holdings serve as a dramatic “federal takeover of New Jersey’s legislative apparatus.” Petitioners declare that this violates, among other things, the Tenth Amendment, which has been interpreted as stopping “Congress from controlling how the States regulate private parties.” Such federal commandeering of a state’s control over its own laws regulating certain private conduct, which could range from “anything from recreational use of marijuana, to carrying concealed firearms, to working on Sundays,” is unprecedented, and moreover, constitutes not just a “minor intrusion on state sovereignty,” but a “sea change to our system of federalism.”

Background facts

In the fall of 2014, New Jersey lawmakers enacted SB 2460, which partially repealed certain civil and criminal prohibitions on sports wagering for professional, collegiate, or amateur contests or athletic events. When Gov. Chris Christie signed SB 2460 into law on Oct. 17, 2014, he released a statement in which he reasoned that while “PASPA represents an unsound and exclusionary policy,” he was nevertheless bound by it, and that SB 2460 “closely adheres to controlling federal law, [and] fully responds to the issues raised by the federal courts.” For instance, he noted, the bill “specifies that certain college sport contests or athletic events shall not be the subject of wagering, as the New Jersey Constitution mandates,” and SB 2460 applied only to those 21 and older.

In the Christie case, the National Collegiate Athletic Association, National Basketball Association, National Football League, National Hockey League, and Office of the Commissioner of Baseball sued various New Jersey officials, including Gov. Christie, the New Jersey Thoroughbred Horsemen’s Association, Inc., and the New Jersey Sports & Exposition Authority, alleging that SB 2460 violated PASPA. The federal district court agreed, twice, first as a panel, and then as the entire court, as did the Third Circuit Court of Appeals. The Third Circuit’s opinion declared that PASPA, “by its terms, prohibits states from authorizing by law sports gambling... We also hold that…PASPA does not commandeer the states in a way that runs afoul of the Constitution.”

In the New Jersey Thoroughbred Horsemen’s Association case, the National Collegiate Athletic Association, National Basketball Association, National Football League, National Hockey League and Office of the Commissioner of Baseball sued the New Jersey Thoroughbred Horsemen’s

Association, and various state defendants, including the governor.

The oral arguments

In a blog post, SCOTUSBlog characterized the early December oral argument as “an hour of spirited debate.” The crux of the petitioners’ position was that PASPA unlawfully represents a “direct command” to the states, despite the fact that the Founding Fathers wanted to regulate only people, not the states. Justice Kennedy appeared to agree, opining that “PASPA leaves in place a state law that the state does not want, so the citizens of the State of New Jersey are bound to obey a law that the state does not want but that the federal government compels the state to have.’ That’s commandeering.”

Similarly, Chief Justice Roberts “chimed in, pointing out that if Congress [had] wanted to impose a flat ban on sports gambling, it could have done so itself and included a clause that specifically indicated that conflicting state laws are pre-empted.” Likewise, Justice Alito suggested that “Congress could have prohibited sports gambling itself.”

On the other hand, the so-called “liberal” faction of the court theorized that PASPA falls within the “well-established doctrine of pre-emption, in which federal laws trump conflicting state laws.”

And Justice Sotomayor doubted “that PASPA requires the states to act. The law doesn’t tell the state that it has to enforce PASPA…’States make choices all the time’ about what laws to enforce; if they tried to enforce all of their laws all the time, they would go bankrupt.”

SCOTUSBlog predicted an outcome in which “a majority of the justices…agree with New Jersey.” The court is likely to release its decision next summer.