Supreme test: Inside the opening arguments in New Jersey's sports betting case

New Jersey’s Supreme Court battle to decriminalize sports betting in the state is officially underway. Late in August the state submitted its 57-page brief to the Court, along with a brief from the NJ Thoroughbred Horsemen’s Association (a defendant and appellant alongside the state).

These documents were quickly followed by seven amicus briefs at the time of writing submitted in support of New Jersey, including filings from the American Gaming Association, Congressman Frank Pallone, sports law professor John Holden, the Pacific Legal Foundation and the European Sports Security Association (ESSA).

The briefs will not be anything ground-breaking to those who have followed the case closely over the years with the argument for state’s rights and against commandeering front and center. Pallone’s submission is typical of the submissions, arguing: “By ordering New Jersey to maintain prohibitions on sports gambling that its State legislature has considered and repealed before, Congress is coercing New Jersey to govern according to Congress’s instructions.  As this form of coercion is unconstitutional pursuant to the guarantees to the States in the form of the Tenth Amendment, this court should hold that PASPA is unconstitutional.”

Beyond the constitutional question, Pallone also writes that the 2014 New Jersey law to repeal sports betting prohibitions does not violate PASPA.

“The 2014 Repeal Law carefully modified and repealed state sports betting prohibitions and restrictions so as not to conflict with PASPA’s negative requirements,” Pallone says. PASPA prohibits states from “authorizing” wagering on sporting events but New Jersey would argue it is not authorizing it, but decriminalizing it.

Another key point is that of private non-delegation, as pointed out by Ryan Rodenberg in his brief. Essentially Congress has handed the power to enforce PASPA to “self-interested private parties”, i.e the sports leagues. In turn they are arguably selectively enforcing it by suing New Jersey but allowing DFS firms to continue to operate freely.

Coast to coast

Perhaps the most important brief on the New Jersey side though came from the state of West Virginia, with the filing co-signed by high-ranking officials from 19 other states, including three governors and 17 attorney generals.

Supporters include states like Mississippi which has already passed legislation that would allow sports betting should it get federal approval, along with states like Utah, which doesn’t even have a  lottery. That support stems from the wider importance of the case when it comes to the preservation of states’ rights, say sports law professor John Holden.

“This has implications way beyond gambling,” Holden says. “It could extend to things like states’ rights to legalize medical marijuana or so-called sanctuary cities, where cities are refusing to enforce federal immigration laws. That’s referred to as the slippery slope. This case might be about gambling but it has huge implications for federalism.

“I don’t want to speak for those states and attorney generals, but Utah has no interest in sports betting but they want the ability to regulate their own state as they see fit.”

Regardless of the reason behind it, the support of 40% of the states in the union can only help New Jersey’s efforts. As Geoff Freeman of the AGA put it: “This group of bipartisan states includes representation from every corner of the country, from states with and without gaming and includes signees from state AG’s offices, as well as governors’ offices.

“It also includes the president of the National Association of AGs, both co-chairs of the NAAG gaming committee, and chair of the Conference of Western Attorneys General.

Michelle Minton, a senior fellow at the Competitive Enterprise Institute, says these states could indeed sway the court, explaining: “The Justices are reluctant to invalidate a law without knowing how the states would respond. The support of these 20 states would go some way to allaying those fears.”

But Holden also warns of overstating the importance of the briefs, especially with the other side still to make their arguments. The sports leagues trying to enforce PASPA will submit their briefs no later than October 16, and their supporters will have a week after that to file their own submissions. Anti-gambling campaigners are likely to be well represented.

Holden adds: “There’s a trend of increasing numbers of amicus briefs and there’s an argument to be made that they’ve become less influential, just because so many are making similar arguments. It absolutely could provide some influence but when you look at the lawyers arguing this case, they’re some of the most talented lawyers in the history of the United States and they won’t miss much.”

Indeed, as befits a case that could decide the fate of a reputed $90bn industry, the lawyers on both sides resemble a “dream team of legal professionals,” according to Holden. Ted Olson and Paul Clement representing New Jersey and the leagues respectively are both former solicitor generals, while Ron Riccio, representing the Horsemen, is also a “hugely respected lawyer.”

What next?

So while the battle lines have been drawn, on one side at least, there are then a whole variety of outcomes still on the table. The Supreme Court could simply affirm the constitutionality of PASPA, allowing the status quo to continue. The court could also find PASPA to be unconstitutional so states would be free to regulate sports wagering. The third option is the court ruling that PASPA is constitutional, but the New Jersey approach of not regulating sports wagering does not violate PASPA, which would result in unregulated sports betting.  That could result in a push by the professional sports leagues for federal regulation.

Holden also points out there are several grey options, where the court strikes down individual clauses of PASPA. “That’s a big grey area because we don’t really have any idea what they might strike down,” he says.

But according to Minton, there is one big favorite among the potential outcomes. “I would be very surprised if the court did not side with New Jersey in allowing it to repeal its laws prohibiting sports betting,” she says.

“The principle of commandeering says Congress may tell the states what to do but it can’t force them to use its resources to enforce Congress’s laws.”

What happens after that ruling would be anyone’s guess, but it would undoubtedly be a major step towards turning the US into the world’s largest regulated sports betting market.