NJ Supreme Court Case May Establish States’ Rights On Sports Betting By End Of June

Written By Joss Wood on April 12, 2017

New Jersey’s attempts to legalize sports betting have met with stiff legal and political opposition. But the Supreme Court could hear the state’s case as early as the end of June.

ESPN’s David Purdum has been following the case closely and recently tweeted:

He followed up with:

The Solicitor General’s view is influential

The Supreme Court of the United States (SCOTUS) chooses what cases it will rule on. Hundreds of cases are referred to the court every year, but the court only has time to hear a fraction of them.

It focuses on those which it considers to be the most significant for constitutional law.

In January 2017, SCOTUS asked the US Solicitor General to file a brief explaining his office’s position on the issue.

The meeting on Monday April 10 was Acting Solicitor General Jeffrey Wall’s first opportunity to personally take evidence on the issue from the interested parties.

Wall was appointed on March 10 this year. So this was be one of the first state’s rights issues to come across his desk.

It’s his job to determine the legal position that the United States will take in the Supreme Court. If he believes that the issue merits the court’s attention, that view will carry weight when the court decides which cases should go on its docket.

PASPA is the primary problem

New Jersey began the current legal spat by passing a law in 2014 which partially repealed the state’s own ban on sports betting.

Four major sports leagues opposed the law: NFL, the NBA, the NHL, Major League Baseball and the NCAA. They convinced US District Judge Michael Shipp to issue a temporary restraining order.

On issuing the order Shipp said, “More legal gambling leads to more total gambling, which in turns leads to an increased incentive to fix plaintiffs’ matches.”

He explained that this was exactly what the Professional and Amateur Sports Protection Act (PASPA) of 1992 set out to avoid.

PASPA prohibited any state from offering sports betting unless it had a sports betting scheme in place between 1976 and 1990.

Nevada qualifies, so sports betting is legal when licensed by the Nevada Gaming Control Board. Delaware, Oregon and Montana each have a limited exemption. In every other state, PASPA makes sports betting illegal.

New Jersey’s position is that gambling is an issue where each state has the right to decide for itself what laws it wants to put in place. This right is protected by the 10th Amendment to the Constitution 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.”

Since gambling is not a “delegated” power, New Jersey argues that its laws are legal. New Jersey also contends that PASPA is unenforceable.

It is the constitutional aspect of the case which makes it of interest to the Supreme Court.

SCOTUS could open the floodgates to state-regulated sports betting

New Jersey’s legal arguments have not managed to convince lower courts that they have merit.

In August 2016, the US Third Circuit Court of Appeals rejected the state’s appeal which it heard “en banc.” Twelve judges sat together to consider the case and then ruled 10-2 against New Jersey.

However, the Supreme Court judges a case on different grounds than lower courts. It is the only court which has the absolute authority to declare PASPA unconstitutional.

Should that happen, New Jersey will not be the only state to consider regulating sports betting. Those states that already have licensed casinos may be first in line think about adding a sports betting product.

Several states, including New York and California, are looking at legalizing online poker.

Pennsylvania and others may legalize a wider range of online gambling. This would include casino games and online slots.

And there is a growing list of states which have legislated to approve daily fantasy sports (DFS).

If states gain the freedom to legislate for sports betting, many states will be willing to create an argument for legislation that would generate significant additional tax revenues.

The losers from a SCOTUS decision in favor of New Jersey would be the offshore online sportsbooks. These sites currently have the market almost entirely to themselves.

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Joss Wood

Joss Wood writes for a number of publications in the online gambling sphere. With a special focus on international markets, he writes for LegalSportsReport.com, OnlinePokerReport.com, and others. He also centers on sports betting, esports betting, and the emergent regulated US online gambling industry.

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