After hearing oral arguments in early December 2017 in the case Christie v. NCAA, 137 S. Ct. 2327 (2017), the Supreme Court has yet to issue a ruling regarding the legality of the Professional and Amateur Sports Protection Act (“PASPA”), the federal law which effectively bans sports gambling in all but four states. Going into oral argument, the pro-gambling side–a coalition comprised largely of states and gambling industry insiders–was considered to be in a good position to win at least some sort of victory, if not a full repeal of the law, and the argument itself went very well.1 While nobody is quite sure right now how the Court will rule, most of the possibilities fall broadly under one of the following categories: (1) uphold the law as-is; (2) a partial strike down (which could leave New Jersey, and potentially other states, free to repeal its sports gambling prohibitions, which would effectively decriminalize sports gambling – but would not allow the states to “authorize,” or pass affirmative legislation sanctioning such gambling); or (3) a full strike down, which could, in addition to legalizing sports gambling, have much larger implications with respect to the anti-commandeering doctrine. 2 In the event of a full strike down, there would be another three options–the federal government could pass new legislation (assuming it passes constitutional muster) banning sports gambling, it could implement its own regulatory system, or it could simply stay out of sports gambling and allow decisions to be made state by state. Many observers believe the Court will not uphold the law in its entirety; how much of the law remains intact, however, is very much up in the air.3
At the narrower end of the spectrum in terms of holdings lies a holding that would find New Jersey’s attempt to repeal its prohibition on gambling constitutional. This would allow New Jersey to repeal its prohibition with respect to only 12 licensed gaming outlets (which constitutes its casinos and racetracks). The federal government’s argument against this is that it amounts to implicit authorization, and on this point, the government’s stance seems to make sense – if New Jersey retains the right to regulate its casinos and racetracks, and only deregulates sports gambling with respect to those specific gaming outlets, then allowing such a specific repeal would serve as a maneuver around PASPA, especially if PASPA’s intent is to confront “state sponsored and sanctioned sports gambling schemes.”4 Authorization in this manner would, in the words of the government, amount to “affirmative enabling conduct” because it “channels [sports gambling] to particular state license providers.”5 Such a narrow holding would also be attractive because it allows the Court to read the statute as constitutional, which the Court often tries to do as a matter of statutory construction and interpretation – a point that particularly seemed to resonate with Justice Gorsuch.6
The problem for the government in this argument, which could prove to be an insurmountable obstacle, is where to draw the line between commandeering and permissible regulation of state action. In order to placate the wing of the Court that worries about commandeering, the government essentially needed to take the position that New Jersey could repeal its law–just not in such a way that it was targeted towards state licensed gaming operators. But in order for that argument to be consistent, the government took the relatively extreme position that New Jersey could only entirely deregulate sports gambling, which could lead to potentially unfortunate conclusions, like a scenario in which the state could not even put its own age restrictions on placing bets.7 Thus, even if the holding is narrow enough to save the statute, it is unclear how exactly the Court would decide to do so.
However, if the Court were to strike down PASPA in whole, the United States gambling market would find itself facing an enormous regulatory vacuum. Under PASPA, Congress obviously decided not to either directly regulate or outright ban sports gambling, even though either option was possible. If it were so inclined, Congress has several examples it could follow: it could look to Europe, particularly the United Kingdom, which has a well-established sports gambling regulatory regime; it could look to Nevada, the sole American state with a mature and effective sports gambling market; or it could create something else entirely. All of that said, Congress has not given any indication that it would choose to implement its own regulatory regime, and even if it wanted to, it does not appear ready for the time being.
In the short term, it is likely that states will fill the gap with their own regulatory schemes (over time, if Congress determined that it would directly regulate gambling itself, it could simply pass legislation to that effect and preempt existing state legislation). In the aftermath of the oral argument, many states have started to enact contingent legislation in case the Court strikes down the law in whole or in part, opening up the possibility of sports gambling again.8 These laws have taken several different forms, ranging from very general terms (i.e. Connecticut’s legislation that allows the state “to regulate wagering on sporting events to the extent permitted by state and federal law.”9 to the establishment of a “sport betting integrity fund” and mechanisms for the payment of an integrity fee to sports leagues.10 Nevada would likely remain unchanged, and many states might look to Nevada as a model on how to best regulate sports betting markets. In an interesting twist, the leagues themselves–who, along with the federal government, are on the opposing side of this case–are attempting to work with states to ensure that they do not miss out on the possibility of reaping benefits from legalized gambling.11 This hodgepodge of state-by-state regulatory schemes could have both positive and negative effects. It could be positive in that states could experiment with different schemes to see what works, but it could also be negative in that navigating a maze of regulations could prove costly for all involved. Additionally, a number of questions remain: would leagues be able to maintain the integrity of their respective sports? Will legalizing sports gambling promote social ills, as some suggest? And will legalized gambling spread ultimately bring back the “hundreds of billions…bet on the black market?”12
Ilya Somin, Place Your Bets On Federalism – Thoughts On Today’s Oral Argument in Christie v. NCAA, Wash. Post (Dec. 4, 2017), https://www.washingtonpost.com/news/volokh-conspiracy/wp/2017/12/04/place-your-bets-on-federalism-thoughts-on-todays-oral-argument-in-christie-v-ncaa/?utm_term=.e64ed4d963c2. ↩
David Purdum, What You Need to Know About the SCOTUS New Jersey Gambling Case, Espn (Dec. 1, 2017), http://www.espn.com/chalk/story/_/id/21621246/gambling-everything-need-know-new-jersey-gambling-supreme-court-case. ↩
See id. ↩
Transcript of Oral Argument at 62, Christie v. NCAA, 137 S. Ct. 2327 (2017) (No. 16-476). ↩
Id. at 58. ↩
See id. at 29. ↩
See Transcript of Oral Argument at 61-2, Christie v. NCAA, 137 S. Ct. 2327 (2017) (No. 16-476). ↩
Ryan Rodenberg, Sports Betting Bill Tracker, Espn (Apr. 1, 2018), http://www.espn.com/chalk/story/_/id/19740480/gambling-sports-betting-bill-tracker-all-50-states. ↩
David Purdum, Why Indiana is Suddenly the Center of the Sports Betting World’s Focus, Espn (Jan. 19, 2018), http://www.espn.com/chalk/story/_/id/22153450/why-indiana-house-bill-1325-important-future-legalized-sports-betting-us-gambling. ↩
David Purdum, Will Vegas Ever be the Same?, Espn (Feb. 13, 2018), http://www.espn.com/chalk/story/_/id/22411455/gambling-vegas-bookmakers-growing-concerns-impact-sports-betting-legalization. ↩