By Hilary Rosenthal
With the fall of Atlantic City over the past few years, it is no surprise that last week New Jersey asked the U.S. Supreme Court to review a decision by the Third Circuit, which strikes down sports betting at casinos and racetracks.[1] The decision struck down a 2014 law signed by Governor Chris Christie.[2] The state argues that the ruling is unconstitutional under the Tenth Amendment anti-commandeering doctrine because it derogates the right of the state to implement and dismantle its own laws.[3]
The joint petition filed by Governor Christie and the State Legislature is a response to the Third Circuit’s decision.[4] New Jersey has twice before tried to get sports betting approved. Under the Professional and Amateur Sports Protection Act of 1992 (PASPA), states are prohibited from authorizing sports betting, but there are special exceptions for Nevada, Delaware, Montana, and Oregon, with New Jersey looking to revive a struggling Atlantic City, sports betting would be one way to help.[5] New Jersey did have a chance to become part of that exception, however it failed to meet the deadline for convening a referendum of voters in that year’s election.[6] The New Jersey Thoroughbred Horsemen’s Association filed a separate petition arguing that it is losing $1 million per week without sports betting.[7] Given that it has been lucrative in Las Vegas and other jurisdictions, it would seem like a practical step for New Jersey as it tries to revive its casino and racetrack attractions.
Gambling investments were supposed to help save a fading Jersey Shore. For a while, the gambling industry was booming; today however, the Atlantic City boardwalk is riddled with empty casinos. Once the recession hit in 2008, poverty and crime went up and the hundreds that once poured into the casinos now have better options in bordering states with nicer locations. The residents of Atlantic City do not have much money to put back into local businesses and communities, making the other destinations more attractive for casino goers.[8] So, although sports betting might a partial answer to the Atlantic City problem and bring money back, the problems seem to be much deeper.
The NCAA, Major League Baseball, NFL, National Basketball Association, and National Hockey League all oppose the prohibition, in part because the professional sports leagues want to reap all the benefits associated with sports gambling.[9] It seems unlikely that the Supreme Court will take the case, as there is no circuit split on the issue of PASPA’s constitutionality. However, there has been a rise of daily fantasy sports, and because of this growth some of the very same parties that oppose legalizing sports betting in New Jersey, such as the NBA, NFL and MBA have partnered with some of the rising Internet sports betting site and generated five times their combined $25 billion in revenue.[10] So why enforce PASPA, but not make fantasy sports betting illegal?[11]
Legalized sports betting could generate a minimum of $8 billion in the United States, not to mention the creation of new jobs, increased tourism, tax revenue, ability to crack down on illegal sports betting and a general boost to the race track and gambling industries.[12] Sports’ betting largely takes place in a non-regulated environment with no consumer protections and is largely underground.[13] It has been estimated that $90 billion will be wagered on NFL games and about $88 billion on college football through underground channels.[14] Many commissioners see legalized sports betting as evil and a ploy to destroy the integrity of the sport. Possible issues with officials involved in the games or even players manipulating or purposefully making calls, not making calls or even “throwing” games to make sure a certain team wins. Furthermore, these professional sports leagues are worried about the transmission of their data, which would go into sports betting and the statistic updates that would need to be given.[15] With Governor Christie petitioning the Supreme Court, the Court has a chance to make a decision that could affect more than New Jersey.
[1] Zachary Zagger, NJ Asks Supreme Court To Review Sports Betting Case, Law360 (Oct. 7, 2016, 9:09 PM), https://www.law360.com.proxy.wcl.american.edu/appellate/articles/849756/nj-asks-supreme-court-to-review-sports-betting-case
[2] See S. B. 2460, 216th Leg., Reg. Sess. (N.J. 2014).
[3] 28 U.S.C § 178 (1992); See also Javon Gershman, New Jersey Asks Supreme Court to Hear Sports-Betting Case, The Wall Street Journal (Oct. 14, 2016 1:00PM), https://blogs.wsj.com/law/2016/10/14/new-jersey-asks-supreme-court-to-hear-sports-betting-case/?mg=id-wsj.
[4] Governor of New Jersey v. Nat’l Collegiate Athletic Ass’n, 730 F.3d 208 (3d Cir. 2013), petition for cert. filed (Oct. 7, 2016).
[5] Gabrielle Gurley, Atlantic City: The Fall of the Boardwalk Empire, The American Prospect (April 8, 2016), https://prospect.org/article/atlantic-city-fall-boardwalk-empire.
[6] Barbara Nathan, How Long Is The Wait For Legal Sports Betting In New Jersey And Elsewhere?, USPoker.com (June 20, 2016), https://www.uspoker.com/blog/will-sports-betting-become-legal-anytime-soon-new-jersey/14472/.
[7] Zachary Zagger, NJ Asks Supreme Court To Review Sports Betting Case, Law360 (Oct. 7, 2016, 9:09 PM), https://www.law360.com.proxy.wcl.american.edu/appellate/articles/849756/nj-asks-supreme-court-to-review-sports-betting-case.
[8] Gurley, supra note 5.
[9] Nat’l Collegiate Athletic Ass’n v. Governor of New Jersey, 730 F.3d 208 (3d Cir. 2013).
[10] Steve Fainaru, Paula Lavigne and David Purdum, Betting on the come: Leagues strike deals with gambling-related firms, ESPN (Jan. 28, 2016), https://www.espn.com/espn/otl/story/_/id/14660326/nba-nfl-mlb-nhl-striking-various-business-deals-gambling-related-firms.
[11] Matt Bonesteel, New Jersey’s attempt at legalized sports betting suffers another big setback in court, The Washington Post (Aug. 9, 2016), https://www.washingtonpost.com/news/early-lead/wp/2016/08/09/new-jerseys-attempt-at-legalized-sports-betting-suffers-another-big-setback-in-court/.
[12] See Barbara Nathan, How Long Is The Wait For Legal Sports Betting In New Jersey And Elsewhere?, USPoker.com (June 20, 2016), https://www.uspoker.com/blog/will-sports-betting-become-legal-anytime-soon-new-jersey/14472/.; See also Daniel Wallach, How to Legalize Sports Betting, Deadspin (Aug. 31, 2016), https://deadspin.com/how-to-legalize-sports-betting-1786002079.
[13] Sports Betting and Shifting American Attitudes, SportsBettinginAmerica.com, https://www.sportsbettinginamerica.com/about/ (last visited Oct. 23, 2016).
[14] Id.
[15] Fainaru, supra note 11.
