The Supreme Court on Monday appeared skeptical that a federal law can force New Jersey and the majority of states to ban sports betting.
The case stems from a lawsuit that the NCAA and pro sports leagues brought against New Jersey after it passed a law in 2012 to legalize and create a licensing system for sports gambling.
Two years after a lower court struck down the law as a violation of the Professional and Amateur Sports Protection Act (PASPA), New Jersey partially repealed the state’s prohibition on sports wagering, but only for racetracks and casinos in the state.
{mosads}PASPA can stop states from passing laws to legalize sports betting, but New Jersey argued that law can’t require states to keep banning it. The state said the law violates the court’s interpretation of the 10th Amendment as barring Congress from controlling how states regulate private parties.
But the NCAA, along with the NBA, the NFL, the NHL and the Office of the Commissioner of Baseball, argue the state’s partial repeal is a creative way to circumvent the law.
Justice Anthony Kennedy, who is often the court’s swing vote, appeared to side with New Jersey. He argued PASPA leaves in place a state ban on sports betting that New Jersey no longer wants on its books.
“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,” he said. “That seems commandeering.”
Under the court’s precedent, Congress can’t dictate the way states regulate private conduct.
Dressed in a black suit and bright pink tie, outgoing New Jersey Gov. Chris Christie (R) sat in the front row for the hourlong arguments Monday, often leaning forward to watch the attorneys arguing before the court.
Kennedy wasn’t alone in his view that the law directs state action. Justice Stephen Breyer a member of the court’s liberal wing, said the case is about telling states what to do, and therefore, it falls within commandeering.
Justice Elena Kagan, however, seemed to side with the NCAA and pro sports leagues, arguing that PASPA merely blocks states from legalizing sports gambling.
“The federal government is saying to the states you can’t do something — so that sounds to me the language of preemption,” she said. “All the time the federal government takes some kind of action, passes a law and then says to the states, ‘You know what, we’ve got this. You can’t do anything.’ ”
Billions of dollars are potentially at stake in the case.
If the court sides with Christie, advocates say it could pave the way for legal sports betting that Christie’s attorney, Theodore Olson, argued is already happening illegally in New Jersey and states across the country.
The American Gaming Association estimates Americans spend $150 billion each year making wagers on sports games. The trade group claimed in briefs that a legal industry could generate $26.6 billion in total economic impact a year in gross domestic product increases, taxes and 150,000 well-paying American jobs.
New Jersey is fighting for sports betting in the hopes that it will breathe new life into Atlantic City, which suffered major losses after the recession and Hurricane Sandy.
Deputy Solicitor General Jeffrey Wall, who argued on behalf of the Department of Justice in support of the sports leagues, said New Jersey would have been in compliance with PASPA if it had completely repealed its prohibition on sports betting.
Chief Justice John Roberts appeared to be stunned by that argument, asking Wall if the government was really OK with no regulation on sports betting.
“You have no problem if there’s no prohibition at all and anybody can engage in any kind of gambling they want?” he asked. “A 12-year-old can come into the casino? You’re not serious about that.”
Wall told him he was.
“The problem that Congress was confronting was state-sponsored and sanctioned sports gambling schemes,” he said. “It didn’t care if I bet with my buddy on the Redskins game or we had an office pool. It wasn’t going after all sports gambling.”
On the steps of the Supreme Court after arguments, Christie told reporters that bets could be taken in New Jersey within two weeks if the court rules in the state’s favor, The Associated Press reported.
“Today is a positive day for the millions of Americans seeking to legally wager on sporting events. While we can’t predict the intentions of Supreme Court Justices, we can accurately predict the demise of the Professional and Amateur Sports Protection of 1992 (PASPA),” the American Gaming Association said in a statement.
“States and tribal sovereign nations have proven to be effective regulators of gaming and today’s oral arguments before the Supreme Court moved them one giant step closer to offering a new product that Americans demand.”
This story was updated at 3:57 p.m.