New Jersey will learn within two weeks the fate of a potentially landmark court case, which would not only decide whether racetracks and casinos can offer sports gambling but possibly overturn a 20-year federal law.
U.S. District Court Judge Michael Shipp, who presided over more than three hours of arguments in Trenton on Thursday, said he wants to take his time to consider all of the constitutional questions raised in the case.
“They are weighty issues. They are not easily and swiftly decided,” he said.
At issue is the constitutionality of the Professional and Amateur Sports Protection Act, which when it was enacted in 1992 prohibited states from authorizing sports gambling with the exception of four jurisdictions, which had legalized some form of sports betting, including Delaware, Oregon and Montana. Nevada is the only one of the four authorized to offer the full gamut of sports gambling.
Labeling PASPA unconstitutional, New Jersey proceeded to amend its constitution and enact state laws last year authorizing the Division of Gaming Enforcement to license sports betting operations in casinos and racetracks. The NBA, NCAA, NFL, NHL and MLB, which oppose sports betting because officials said it will bring the integrity of the games into question and may lead to loss of fan dollars, subsequently sued to stop New Jersey.
The state’s lawyers are arguing the federal government is “commandeering” New Jersey’s rights because PASPA forbids the state from changing its laws and legalizing sports betting, rather than just outright banning sports gambling at the national level.
“The federal government in PASPA has chosen not to regulate sports gambling itself but has attempted to thrust that unwelcome burden to New Jersey,” said noted constitutional lawyer Theodore Olson, who has been hired to represent the state.
New Jersey lawmakers and the governor want to legalize sports betting as a way to address its budget shortfall, high unemployment and struggling businesses, but if the lawsuit is successful and PASPA is upheld, those efforts will be stymied, he said.
“The people of New Jersey are being told we can’t solve the problem in Atlantic City,” Olson said.
If PASPA is ruled constitutional, changes to New Jersey’s constitution and laws will have been voided, Olson said.
But the Department of Justice, which filed a brief on the matter, said that when Congress enacted PASPA, the legislature had a rational basis for the statute.
“It doesn’t have to be perfect, it doesn’t have to be great, it just has to be good enough,” U.S. Attorney Paul Fishman said of PASPA during deliberations.
PASPA also does not require the state to take on any additional responsibilities or enforcement duties, and as a result is not “commandeering” New Jersey, he said.
The anti-commandeering doctrine, upheld by the Supreme Court, is based on the principle of accountability. State officials can’t be forced to regulate or do anything that they don’t have any input in, Fishman said.
In the case of sports betting, Congress, including New Jersey representatives, made the decision to stop the spread of legal sports betting. The legislative body did that by prohibiting the activity while including exemptions for Nevada and the three other states because Congress recognized those states had already offered sports gambling and had come to depend on the activity economically, Fishman said. The federal government can discriminate against states as long as it’s rational, he said.
“As long as Congress has rational basis, it can make a distinction among states,” Fishman said. “It does show that Congress, when it made these distinctions in the statute, it was a thoughtful distinction.”
But Olson said the discrimination allowed Nevada to have a permanent advantage over other states that would last indefinitely for no particular reason.
“There is nothing magical about the desserts of Nevada,” Olson said.
Jeffrey Mishkin, a lawyer representing the professional and amateur sports organizations, said the case was as simple as federal laws overriding state ones rather than an example of the federal government commandeering states’ rights.
Congress wanted to make sure states were not authorizing sports betting but did not put any provisions that required New Jersey to enforce the prohibition, Mishkin said.
“It forbids conduct. It does not require conduct,” he said. “There is nothing in PASPA to enact, maintain or enforce any prohibition on sports betting.”
Still, Olson questioned the assertion that enforcing PASPA wouldn’t costing the states any money while at the same time also not costing federal dollars to enforce.
“This is a government in your dreams,” he said, adding that enforcing PASPA must carry a cost.
The sports leagues also argued New Jersey was given an opportunity to legalize sports betting within one year of PASPA’s enactment in 1992 but decided against it at the time.
“New Jersey was favored above all of the states,” Mishkin said. “New Jersey has the least basis to complain that it was treated unfairly by Congress.”
The court case is not only being closely followed in New Jersey but by those in other jurisdictions seeking to also offer sports betting. More than 20 lawyers — including those representing the New Jersey Thoroughbred Horsemen’s Association, Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver, who asked to be made a party to the litigation — appeared to argue the case in front of Shipp.
Members of the horsemen’s association, who also operate Monmouth Park, will be among the most affected if PASPA is held to be constitutional, said Ronald Riccio, the lawyer representing the association.
“Sports betting can help promote their chances to keep the racetrack open,” he said. “If Monmouth Park is forced to close, the entire New Jersey equine industry is likely to collapse.”
Riccio questioned whether there was a real concern for the proliferation of sports gambling when the NFL schedules games in London where bets on sporting events are accepted and the NCAA promotes March Madness pools.
“Is that reflecting a concern?” he asked. “What it reflects is there’s no rational connection whatsoever.”
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