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High Court Weighs New Jersey Challenge to Federal Law on Sports Betting

Washington

The U.S. Supreme Court on Monday took up the state of New Jersey's challenge to a 1992 federal law meant to stop the spread of legalized gambling, in the name of concern about "the potential effect of legalized sports gambling on America's youth," as a U.S. Senate report put it.

Congress did not outright prohibit sports betting, as Nevada has had a regulated form of it since 1949. Instead, the Professional and Amateur Sports Protection Act says a government may not "sponsor, operate, advertise, promote, license, or authorize" sports betting, with exceptions for Nevada and three other states—Delaware, Montana, and Oregon— that have sports-related lotteries. (PASPA actually gave New Jersey a one-year window to legalize sports betting, which the state did not take advantage of.)

Believing that PASPA infringes on the state's' rights by "commandeering," or directing the states to pass laws against sports gambling, the New Jersey in 2012 adopted a comprehensive system of regulating such betting.

That effort was struck down in the courts, and New Jersey tried another approach. In 2014, it repealed key provisions of its state laws against sports betting, but only at racetracks and casinos in the state, only with respect to those 21 and older, and not including "a collegiate sport contest or athletic event that takes place in New Jersey or a sport contest or collegiate athletic event in which any New Jersey college team participates." 

That measure was also struck down, and New Jersey ended up in the Supreme Court against the National Collegiate Athletic Association, and the four major pro sports leagues—baseball, football, basketball, and hockey.

The Dec. 4 argument in Christie v. NCAA (Case No. 16-476) featured a titanic battle of former U.S. solicitors general representing the two sides. Theodore B. Olson, who was President George W. Bush's first solicitor general, represented Gov. Chris Christie and the state, as he has throughout much of the ligitation.

"The title of this statute says it all: 'a statute to prohibit sports gambling under state law,'" Olson told the justices. "PASPA is a direct command to the states without any effort to regulate sports wagering."

Paul D. Clement, who was solicitor general later in the George W. Bush administration, represents the sports leagues. He told the justices that PASPA "furthers federalism values."

"This statute basically says, look, 46 states right now are more or less doing what we want, but they're doing it in 46 different ways," Clement said.

The sports leagues have generally taken a strong view against legalized sports betting on the theory that it would threaten the integrity of their games. But those views have softened in recent years as both the NHL and NFL have agreed to have franchises in Las Vegas. (The NHL's  expansion Golden Knights began play this fall, while the NFL's Oakland Raiders will move to the Nevada city in a year or two.)

Meanwhile, NBA Commissioner Adam Silver wrote an op-ed for The New York Times calling for sports betting to be legalized and regulated.

The justices debated whether PASPA is more like some of the federal laws it has struck down as violating the anti-commandeering principle or similar to laws that properly pre-empt state laws by comprehensively regulating in an area.

Justice Anthony M. Kennedy was one of several justices who made comments sympathetic to New Jersey. He said in that PASPA "leaves in place a state law that the state does not want, so the citizens of the state of New Jersey are bound to obey a law that the state doesn't want but that the federal government compels the state to have. That seems commandeering."

But Justice Sonia Sotomayor asked Olson, "What's so crazy about Congress perceiving that states would never want 12-year-olds to go into gambling houses and that the states would find some way of prohibiting that?"

Olson replied, "What Congress can do is enact a statute that places restrictions on sports betting, and have a finely reticulated statute. It can adopt the provision that it permitted Nevada to have, which is careful regulation of something that's taking place. What we have now is activity that is billions of dollars that is taking place throughout the United States. It is all unlawful."

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