High Stakes: The Fight for Legalized Sports Gambling and its Underlying Impact on Federalism

NICHOLAS DILTS—Every spring, the NCAA men’s basketball tournament becomes one of the largest events in the country as millions tune in to watch the fascinating and heart-wrenching action that is “March Madness.” During this past year’s tournament, it was reported that roughly $10 billion was going to be wagered on the tournament, but that only 3% of that would be through Nevada’s legalized sports books. As viewers came to grips with the fact that their participation in their neighborhood’s $20 bracket pool made them criminals in the eyes of most states, the spotlight on an activity that has become increasingly accepted in American culture despite being banned by the federal government burned ever brighter.

In an effort to preserve the integrity of professional sports and end gambling-related corruption, Congress passed the Professional and Amateur Sports Protection Act (PASPA) in 1992; PASPA created a federal ban on any state activity to sponsor, operate, advertise, promote, license or authorize sports betting. The legislation granted immunity to Delaware, Oregon, Montana, and Nevada—states that had previously allowed sports betting to occur within their borders. Critics of PASPA point to the $150 billion that Americans allegedly spend annually on sports gambling through illegal bookies and offshore online betting sites that have proliferated in the wake of its passing, the criminal activities those revenues fund, and the lack of consumer protections available for participants. To those advocates, society would be better off if state governments could regulate gambling and simultaneously use the tax revenues to support their respective government activities.

In late 2017, the Supreme Court of the United States listened to oral arguments in the consolidated cases Murphy v. NCAA formerly Christie v. NCAA prior to Governor Phil Murphy’s election) and NJ Thoroughbred Horsemen v. NCAA. The case arose when the NCAA and four professional sports leagues (the MLB, NFL, NBA, and NHL) filed suit against the State of New Jersey’s Governor, Assistant Attorney General, and Executive Director of the New Jersey Racing Commission in an attempt to prevent New Jersey, the current gambler’s champion, from passing a law that would repeal existing bans on sports betting in certain Atlantic City casinos and at its racetracks.

The main issue in Murphy v. NCAA seems to focus on whether the PASPA is in contravention of the rights afforded to the States in the Tenth Amendment. SCOTUS previously interpreted the amendment as preventing Congress from using the States as vehicles to implement its own regulations, thus commandeering the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program. The anti-commandeering doctrine preserves the individual accountability of federal and state governments and ensures each remains directly responsible and responsive to its people. The federal government has power to enact its own comprehensive regulatory scheme and pre-empt any conflicting state laws but has not exercised the right. New Jersey argues that due to this lack of federal action, PASPA functions as a direct command from the federal government to the States and their constituents, forcing them to keep in place regulations they do not want and have, in fact, decided to repeal.

Contrary to New Jersey’s interpretation, the NCAA and its allied parties have asserted that the PASPA is constitutional because it doesn’t compel the States to enact or enforce anything related to sports gambling—it simply bars them from authorizing the activity. The fact that New Jersey’s law repeals prohibitions for only select casinos and racetracks is effectively an authorization of sports gambling in violation of the Act. When pressed on this position, Deputy Solicitor General Jeffrey Wall stated that Congress’ intent wasn’t to confront all sports gambling, just schemes that were state-sponsored, and that New Jersey could repeal all sports gambling prohibitions within the state to have a completely unregulated betting market without being in violation of the Act. This prompted a response from Chief Justice Roberts, who took issue with the idea that it would be fine to create an environment where children could freely place wagers in casinos. The Chief Justice reasoned that if PASPA was putting states in a position where complete repeal was the only legal action they could take, they weren’t being given an actual choice.

The immediate focus of the Supreme Court’s upcoming decision is the potential legalization of sports gambling around the country. In fact, as many as twenty states have begun to formulate legislation to legalize the activity within their borders due to its economic potential. In any event, the far-reaching implications that any decision will have on the balance of power between states and the federal government might directly impact far-removed issues such as decriminalization of marijuana and concealed carry permits and therefore make Murphy v. NCAA one to watch in 2018.

Leave a Reply

Your email address will not be published. Required fields are marked *