WASHINGTON–Sports gambling may be illegal in nearly every state, but just like alcohol cascading through the streets during Prohibition, billions of dollars each year flow illicitly from bettors to bookies and online casinos.
If the state of New Jersey gets its way, however, the law banning sports gambling will join the 18th Amendment in unconstitutional heaven, opening up the doors to legalized wagering on all professional and college sports.
New Jersey state senator Ray Lesniak put forth a challenge to The Professional and Amateur Sports Protection Act, or PASPA, in his state’s legislature. If it passes, it will go on the ballot in November as a public referendum. Lesniak’s law firm also issued a suit against the Department of Justice calling for the repeal of PASPA.
At the top of Lesniak’s complaint is that PASPA allows states that had some form of sports gambling before its passage to continue offering that gambling. That means four states – Nevada, Delaware, Montana and Oregon – are permitted to engage in an activity the other 46 states cannot. Lesniak believes it violates the 10th Amendment, which grants the states all rights not directly enumerated to the federal government, and exceeds Congress’ commerce clause rights.
“I can’t imagine the courts saying a law that gives special privileges to four states has any type of reasonable and rational [basis in law],” Lesniak said. “There are significant states rights issues involved. We’re pretty confident we’ll ultimately win.”
Both arguments are easy to formulate. Whether they’ll stand up in court is a completely different beast.
Jeffrey Standen, a law professor at Willamette University in Salem, Ore., said New Jersey’s claim that PASPA infringes on the 10th Amendment stands a better chance of succeeding.
“The Federal PASPA statute essentially commandeers state authorities and requires them to do something that they otherwise do not want to do,” Standen said. “It requires state legislators to vote for a prohibition against sports betting.”
Lesniak first must get the measure approved within his state. If he can do that, Ryan Rodenberg, an assistant professor of sports management at Florida State University, agreed that New Jersey could make a legitimate case that PASPA breaches the 10th Amendment.
“It would be fascinating to see it litigated,” said Rodenberg, a lawyer himself. “I don’t think there’s anything directly on point [to refute the argument].”
Tony Cabot, a gaming lawyer with Lewis and Roca in Las Vegas, said New Jersey should focus on the equal protection law.
“I do think there’s discrimination among the states and I don’t know if there’s a rational reason for that,” Cabot said. “From a more practical perspective, if betting on sports is so against the public policy of the U.S., allowing certain jurisdictions the right to do it undercuts that policy.”
Cabot added that PASPA’s legitimacy is called into question by the sheer amount of illegal sports gambling occurring in the country daily.
“The volume of illegal sports wagering is such that the policy appears to not make any sense,” Cabot said.
Concerning the commerce clause, Standen said, “It’s weird to treat the states unequally with a uniform federal statute. The reason I think that claim loses is that the courts have long held that the commerce clause powers of the Congress are plenary,” or absolute.
PASPA recently withstood a battle with Delaware in which Gov. Jack Markell attempted to expand the state’s sports betting program. The case made its way up to the Supreme Court, but the justices declined Delaware’s appeal for writ of certiorari, thus confirming a Third Circuit Court decision that the state could not offer betting beyond the three-game NFL parlays already on its books.
Lesniak said Delaware’s loss does not affect New Jersey’s claim of unconstitutionality, as Delaware tried to get the courts to reinterpret PASPA. He and his supporters asked Gov. Markell to join them in their case, but Markell denied. There’s a belief that Delaware would prefer to be the sole proprietor of stripped-down sports gambling on the East Coast instead of opening the floodgates to everyone.
“I asked the governor of Delaware to raise [the issue of unconstitutionality] but he didn’t want to do that because that would have allowed New Jersey and other states to get in on their action,” Lesniak said.
Rodenberg agreed that while the two cases challenge the same law, their similarities end there.
“New Jersey’s claim is radically different than Delaware’s,” Rodenberg said. “Delaware thinks the law is constitutional and it’s kind of self-serving. I understand why they’d want to keep their monopoly.”
If New Jersey can overturn PASPA, the state estimates it could generate $60 million in tax dollars for the state. It first must survive a vote in the state legislature, which would be aided significantly if Gov. Chris Christie gives it his support. Former Gov. Jon Corzine was on board and Christie’s support would give both the bill and the lawsuit more weight. He has until July 15 to decide.
New Jersey actually had a one-year window to legalize sports gambling before PASPA went into effect, to no avail.
There has been speculation that the NFL awarded the new Meadowlands Stadium in East Rutherford, N.J., the Super Bowl in 2014 on the condition that the state would halt any efforts to legalize sports gambling.
Lesniak insisted that is not the case and that the state will vote on the measure this week.