New Jersey’s Sports Betting Case in Supreme Court, Explained By Expert

By Brett Smiley | Published: October 9, 2017 at 8:15 am

(Note: This story was originally published on Aug 29, 2017)

New Jersey’s sports betting case against the NCAA and the major professional sports leagues still awaits its date for oral argument in the United States Supreme Court, which will occur sometime in the fall or winter. For observers and sports betting enthusiasts, it’s like waiting months for the Super Bowl, but at least we don’t get suckered into watching anything resembling the NFL Pro Bowl.

While New Jersey may represent the side that’s happy to be there, it just may be the slight favorite, too. But that’s certainly up for debate, just like the state’s and leagues’ arguments. (Case docket with the U.S. Supreme Court here).

For insight on the case, SportsHandle Editor-in-Chief Brett Smiley spoke to Marc Edelman, Esq., Professor of Law at the Zicklin School of Business, Baruch College, City University of New York. Professor Edelman specializes in and is a frequent speaker on sports law, antitrust law, intellectual property law, and gaming and fantasy sports law. (Emphasis added by SportsHandle).

SportsHandle: What do you think is the most important point that New Jersey needs to convey at oral argument?

Prof. Edelman: There really are two. One point needs to be that, albeit not explicitly stated in the Constitution, there is implicitly a principle of equal sovereignty. In treating New Jersey differently from Nevada it is implicitly problematic under the fiber of the Constitution. Second, New Jersey needs to make the argument that the Professional and Amateur Sports Protection Act, the way that it is written, forces particular action on a state and doesn’t simply encourage behavior of a state, nor does it implement directly a federal policy.

SportsHandle: Regarding equal sovereignty, where in the Constitution or under which amendment or is it most clearly implied?

Prof. Edelman: It’s interesting, there is not anything in the Constitution that directly talks about equal sovereignty. Kind of like the right to privacy that some courts have recognized under a penumbra of rights. Some believe there is a limited amount of precedent, including a case from the Supreme Court in the early 1900’s that simply implies equal sovereignty. There is no explicit clause in the Constitution requiring equal sovereignty, and the argument will be made more based upon case law than any particular amendment in itself.

SportsHandle: Do you think New Jersey has a better shot with the anti-commandeering or equal sovereignty argument?

Prof. Edelman: As a matter of public policy I believe the equal sovereignty argument should be the much stronger argument. It would seem easier for lawyers to argue the anti-commandeering point because lawyers will be able to point specifically to the 10th Amendment as well as two Supreme Court cases that directly address the 10th Amendment in the context of anti-commandeering. While as a matter of pure public policy it sounds incredibly reasonable that all states should be treated equally under federal laws but lawyers will not be able to point to a direct statute or language in the Constitution that is explicitly on that point.

SportsHandle: In Ryan Rodenberg’s [Florida State University Associate Professor of Law] amicus brief, I was intrigued by the argument about the nondelegation doctrine, talking about how PASPA basically outsources enforcement to the leagues. Unless I missed it, that issue didn’t come up in either the District Court or Third Circuit. If so, can that even be the basis of an argument in the Supreme Court?

Prof. Edelman: Ryan Rodenberg is a wonderful legal scholar who pays a lot of attention to detail and nuance and has been looking at the issues involved in sports gambling for many years. Any research that is conducted by Professor Rodenberg needs to be taken very seriously given his background and history. As for the particular question as to whether a court decision could turn on a point not initially raised by the parties, the simple answer is yes. In fact, in sports law jurisprudence, the 2011 case Brady versus National Football League that essentially ended the work stoppage in the NFL, the league was allowed to maintain its lockout based upon an obscure provision, one that was not cited by either party in the original brief given the parties had focused primarily on the nonstatutory labor exemption. Yes, it is theoretically possible that a case could be decided on an argument that was not in the briefing. Sometimes arguments that are not raised in the original briefing come up in the oral argument stage based upon questions that are asked by judges during the hearing of oral arguments.

SportsHandle: To me the nondelegation argument seemed equally if not more compelling than either equal sovereignty or anti-commandeering.

Prof. Edelman: To me the most interesting part of Ryan Rodenberg’s brief was the notion of the court upholding PASPA in its majority, but simply overturning the clause that allowed a grandfather to the four states that already allowed the sports gamble. That needs to be scary to states such as Nevada. If Rodenberg is right on that part, and Ryan makes a very compelling argument, it would leave PASPA in place but would end sports gambling in Nevada, at least for the moment.

SportsHandle: I realize that’s a real scenario, but I simply cannot imagine that happening. It’s the Court, not Congress, but they would just be demolishing an entire city and state’s established industry.

Prof. Edelman: It would need to make Nevada very concerned. In the long run, however, I doubt that after this all shakes out one would end up in an environment where there’s no sports gambling whatsoever. At the end of the day, irrespective of what the Supreme Court decides for this moment in time, the long term outcome of sports gambling, in any individual states or the states in totality, will likely be determined by whatever bill is passed next by Congress on the point.

SportsHandle: If New Jersey is successful and PASPA gets repealed, and they implement sports betting, how much do you think it helps the state monetarily?

Prof. Edelman: The problem is that New Jersey casinos are suffering because through Native American gambling and other states changing their laws, New Jersey’s neighboring states are now offering poker, slot machines, and other activities, whereas 20 years ago people were going to Atlantic City if they wanted to play poker or participate in slots. Now there’s opportunities to do that in neighboring and sometimes more desirable states such as New York, Pennsylvania, and Delaware. Should New Jersey win this case, it would have to recognize that it would not just open up the door for New Jersey to have sports gambling, but it would theoretically open up the door for these other states to do it as well.

SportsHandle: New Jersey should get a vig on bets placed in other states that may benefit from all they’ve invested in this quest.

Prof. Edelman: On that note let’s speak about New York for a moment. There have been some pundits suggesting that states such as New York and Mississippi should file similar lawsuits to New Jersey. My view has always been that that would be foolhardy and a waste of taxpayer resources. It makes sense to every state that’s interested in sports gambling that is not New Jersey to simply let New Jersey spend the money from New Jersey’s own coffers, and if New Jersey wins then to attempt to move forward.

SportsHandle: That seems to be the case with the legislation that we’re following. Every state is basically going to wait and see at this point because this is their biggest, best shot, it would seem.

Prof. Edelman: [New Jersey State Senator] Ray Lesniak believes he has this big ticket plan to revitalize Atlantic City. For him to succeed at revitalizing Atlantic City with sports gambling what he would need would be for New Jersey to be allowed to have sports gambling, but keep sports gambling out of the other states. That will not be the result. Much as the same way New Jersey has begun to lose market share in slots and poker to casinos based in neighboring states. It is very likely that the moment that New Jersey starts in sports gambling other states will change their laws and compete in this marketplace as well, taking away any competitive advantage that Atlantic City may have, again, had for a momentary basis.

SportsHandle: So, what kind of regulatory framework could you see taking shape at a state and possibly national level with respect to the betting on professional and amateur sports?

Prof. Edelman: I don’t think it would be feasible, at present, to have federal regulations given first there is no federal agency currently overseeing and regulating gambling. Second, even to the extent PASPA is overturned, there are some in, perhaps, many states that will continue to disallow sports gambling for public policy reasons. What does seem possible, however, is that an association such as the American Law Institute could propose a model law and many states will adopt that model law and recognize reciprocity for registration between the states.

SportsHandle: That’s interesting, because I saw in that the GAME Act proposed by New Jersey Representative Frank Pallone, which is a discussion draft at this point, the Federal Trade Commission would effectively become the enforcement arm. That seems unusual given that it’s all boiling down to federalism in this case.

Prof. Edelman: That seems to be shortsighted of the realities of our government. It is easy to understand why Pallone wants there to sports gambling in New Jersey. But the notion that the federal government is going to want to get involved in regulating sports gambling seems like that will not go too well. If we look at the current policy in this country, America has elected a president under the argument of smaller government, less tax spending, and greater states’ rights. The notion of now having a federal regulatory body to oversee gambling on a national level flies in the face of even the most reasonable aspects of the policies of this administration. It would be doubtful to that s plan come to fruition.

SportsHandle: This asks for complete conjecture, but if you had to guess, which Supreme Court Justices were the ones that wanted to hear the case?

Prof. Edelman: That’s very difficult to say. When it comes down to it, at the Supreme Court level, this case seems to be less about the public policy behind gambling and more about the balance between state rights and federal rights based on both the commandeering clause, the 10th Amendment, and the notion of equal sovereignty between states. With that much said, one could make a reasonable guess that judges that look broadly at states’ rights would be the most interested in hearing this case and perhaps reversing this case. It would not be surprising if Justices like Alito, Roberts, and Gorsuch were very interested in this case from the standpoint of broadening the notion of commandeering and further protecting states’ rights.

SportsHandle: Some final thoughts?

Prof. Edelman: Let’s go back to where the discussion began. If nothing else I think there are two points that readers should take away from this discussion. First, while there’s a very interesting and intellectual public policy discussion about the legalization of sports gambling, the case that is before the Supreme Court will likely be looked at by the justices more in terms of states’ rights versus federal rights, rather than a general referendum on sports gambling. Second, at the end of the day, whatever the Supreme Court decides, will likely only be binding for a moment in time. Irrespective of how the Supreme Court ultimately decides this case, Congress legally could vote in a new statute that would change the legal status of sports gambling. At the end of the day it’s unlikely that this matter will be put to bed by what the courts say, but ultimately by what Congress in the long run decides to do.

Check back here often for more discussion on this SCOTUS case and the intersection of  sports law and sports betting. And go “like” our Facebook page and follow us on Twitter.