First Oral Arguments Presented in SCOTUS Sports Betting Case

The long-awaited Supreme Court case that will decide the fate of legal sports betting in the United States is officially underway. Lawmakers representing New Jersey in its challenge of the federal prohibition of sports betting presented oral arguments in front of the Supreme Court of the United States this morning.

Former Solicitor General Ted Olson is representing New Jersey and had a long conversation with Supreme Court Justices this morning as he presented the case for allowing New Jersey to legalize sports betting. You can read the nearly 80-page transcript here, but the gist of what was discussed today relates to the 10th Amendment.

The 10th Amendment states that “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.”

New Jersey is arguing that the federal prohibition violates the 10th Amendment and should therefore be overruled. While PASPA is often referred to as a ban on sports betting, it does not technically prohibit sports betting. Instead, PASPA simply tells the states that they cannot regulate or authorize sports betting.

At the same time, PASPA itself fails to regulate or even set a clear policy regarding sports betting. Again, all it says is the states are not permitted to regulate sports betting. This is a crucial detail in the case as New Jersey argues that the way the law is written constitutes illegal federal commandeering of the states.

NPR also has a helpful review of the main points made by both sides today that you can read here.

There is still a long way to go in this case with a ruling not expected until next year – possibly not until June. However, this first day of arguments should inspire optimism in the hearts of sports betting fans. Today’s arguments have already to multiple news outlets publishing articles with headlines like:

“High court hints it could side with state on sports betting”

and

Supreme Court likely to rule states can allow sports betting.”

Today’s news reports state that a majority of the Justices seem to be leaning towards ruling in favor of New Jersey. However, all news reports from today only specifically named Justices Anthony Kennedy and Stephen Breyer as making statements clearly favorable to New Jersey’s case.

In its report published earlier today, NPR noted that Justices Kennedy and Breyer both made statements that can be interpreted as obviously sympathetic to New Jersey’s argument. Justice Kennedy said at one point that PASPA “blurs the line of accountability” between states and federal government and that this is “precisely what federalism is designed to prevent.”

Justice Stephen Breyer also said that “all we have here are a group of provisions telling states what they cannot do, at the same time the federal government does not have a clear federal policy.”

On the other side, Chief Justice John Roberts gave Olson some pushback by saying that the law is “pretty comprehensive” and acts as a “total prohibition,” suggesting that PASPA does not actually violate the 10th Amendment.

Justices Elena Kagan, Ruth Bader Ginsburg and Sonia Sotomayor all appeared much more skeptical of New Jersey’s arguments. All three noted at various points that a long history of case law has recognized the federal government’s ability to preempt states under circumstances similar to this one.

Justice Neil Gorsuch did not seem particularly committed in one way or another apart from telling Ted Olson that the Supreme Court typically tries to “interpret statutes in ways to avoid constitutional difficulties.”

Justice Alito did not make any sweeping statements today, but one question he asked of Mr. Clements (representing the sports leagues against New Jersey) could possibly be interpreted as skeptical of the structure of PASPA:

“Congress could have prohibited gambling enterprises itself. No question it could have done that, assuming it’s within the Commerce Clause. What policy does this statute serve that would not?”

As much as we would like to be enthusiastically optimistic, we should be careful not to read too much into this question or any of the statements made by Justices today. We are still in the very early phases of this case and the Justices are just getting started. That being said, this is not a bad start if you’re hoping to see legal sports betting in New Jersey sooner rather than later.

A Brief Review of New Jersey’s Sports Betting Legalization Effort

New Jersey is challenging the constitutionality of the Professional and Amateur Sports Protection Act (PASPA), a law which effectively bans sports betting in the United States outside of Nevada. When PASPA was passed in 1992, it banned sports betting across the country except in states which had some form of legal sports betting between 1976 and 1990.

Limited sports lotteries in Delaware and Oregon as well as a limited form of sports pools betting were all exempted along with Nevada’s already-thriving sports betting scene. New Jersey was also given a one-year period to legalize sports betting and receive an exemption of its own, but the state failed to act during that time.

Currently, only Nevada has actual sports betting as we know it. It is the only state where single-game sports bets are permitted. In recent years, New Jersey has been fighting in court for the right to join Nevada in offering legal, regulated sports betting.

New Jersey has been beaten every step of the way by the NCAA and the four major professional sports leagues (NBA, NFL, NHL and MLB). Various state and federal courts have ruled against New Jersey in multiple instances and the Supreme Court has already once declined to take the case. However, the Supreme Court finally decided to hear the case when it accepted New Jersey’s petition for a trial earlier this year.

New Jersey first attempted to legalize sports betting back in 2012, and that led to the sports leagues suing to stop the action. New Jersey and the sports leagues have been battling it out ever since.

Interestingly, the NBA is actually in favor of legalizing sports betting even though it opposes New Jersey in this case. The NBA just wants to do it a different way: by having Congress repeal PASPA and implement federal regulations that would apply to all states rather than allowing each state to forge its own path forward as would happen if New Jersey wins this case.

Regardless of what happens in this case, there is no doubt that momentum has been building for legal sports betting in the USA. More than a dozen states have voiced support of New Jersey in this case and a recent report estimates that sports betting would be legal in 32 states within five years if New Jersey wins. New Jersey Governor Chris Christie has said his state is prepared to begin allowing sports betting within two weeks of a favorable decision.

What this all means is that even if New Jersey does not win today, the fight is far from over. With the sports leagues softening their stances and increasing numbers of states showing interest in legalizing (and taxing) sports betting, it seems increasingly likely that something will eventually get done at the federal level should New Jersey lose its case.

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