Supreme Court Hears Arguments on Legalizing Sports Gambling

Though judges’ rulings are always hard to to predict based on oral arguments, the feeling is that the U.S. Supreme Court is leaning toward permitting sports gambling in New Jersey, which would open the door for moves by other states

I received quite a response from my column last week previewing today’s Supreme Court case of Christie v. NCAA, weighing legalized sports betting in New Jersey (and potentially beyond). I heard from Congressional staffers, league executives, gaming regulators and gambling industry advocates. These were some common themes: (1) some form of legalization is inevitable, (2) a regulated environment would be preferable to the present unregulated environment, (3) integrity concerns can be managed, as they are in Nevada and overseas, and (4) the Supreme Court is going to do something to alter the sports betting landscape in this country. The column, and the issue, has touched a nerve in sports law and business.

With that backdrop, I attended oral arguments in the hallowed halls of the United States Supreme Court on Monday, sitting in such arguments for the first time in my life. (Yes, surprising for this lawyer and native Washingtonian.) It was certainly a humbling, and awe-inspiring experience.

The case

While my perspective has focused on the shifting attitudes of sports leagues on gambling and “integrity,” the arguments in front of the Court proved to be more legally parsed, with a brief and simplified background here.

New Jersey originally wanted to mimic Nevada-style sports betting back in 2011, though that plan was challenged, and subsequently blocked, by the sports leagues. State legislators then pivoted to a different model, a “partial repeal” of their law, adjusting to limit sports betting to racetracks and casinos only. This plan was also successfully blocked in court by the sports leagues, from which New Jersey (in the name of outgoing Governor Chris Christie) has appealed to the Supreme Court.

Thus, the issue in front of the Court on Monday was whether the federal statute passed in 2012, the Professional and Amateur Sports Protection Act (PASPA), can prohibit a state from repealing—or partially repealing—its own state law. In other words, does PASPA prohibit or preempt New Jersey from having state-sponsored sports betting through its law on the books?

The Arguments

Arguing for New Jersey was all-star litigator Ted Olson, no stranger to the sports leagues or the NFL, having argued against the league, and for the NFLPA, in cases such as the 2011 lockout.

Today, Olson championed states’ rights, starting his argument with referencing the Constitutional Convention and the Founding Fathers, who created a society that gives the states powers to govern their own. Olson argued that PASPA cannot “command” states to act (or not act) in certain ways, as doing so would violate the “anti-commandeering” element of the 10th Amendment. Public policy, he argued, has always allowed states to legislate without being “commandeered” by the federal government to act in a certain way.

Olson championed states’ rights in arguing for a result that would allow New Jersey—and the states poised to join them—to implement their own law irrespective of the federal government’s existing statute. While sports betting is the issue at hand, it could apply to other issues as well.

On the opposing side, the leagues, for whom cost is certainly no object, brought in the best in Paul Clement. He argued that PASPA does not “command” the states to do anything; rather the law merely provides a regulatory framework for states and individuals alike. Clement brought up several cases and situations in which Congress had similarly restricted state behavior.

Clement has a strong track record of success with the NFL in recent years, having achieved successful resolutions in the lockout case (against Olson), the concussion case (a favorable NFL settlement) and recent wins in discipline cases concerning Tom Brady and Ezekiel Elliott.

In this case, however, my impression was that Clement was not on the winning side of the argument.

Reading the Justices

An obvious disclaimer here: It is an admittedly dangerous exercise to try to draw conclusions from judges’ questioning during oral arguments; that is true at every level including this, the highest court in the land. Having said that, there were trends today that were hard not to extrapolate from.

I sensed an overall justices’ empathy with Olson and New Jersey and stridency with Clement and the sports leagues. Specifically, Justice Breyer seemed very pro-New Jersey, even framing Olson’s argument for him at one point, to which Olson responded “I wish I had said that!” Chief Justice Roberts, Justice Kennedy and Justice Alito also appeared to be more aligned with the states’ rights arguments of the New Jersey side.

My sense is that Justice Sotomayor was would side with the sports leagues. Although unrelated, she once was said to have “saved baseball” with a decision ending the 1995 strike, and to have “saved the NFL” in a 2004 decision against Maurice Clarett that upheld the NFL’s rule requiring players to be three years removed from high school before being eligible for the draft. Unlike many of her colleagues today, I found her more on the side of the sports leagues.

That leaves three justices who, to me, did not truly show their hand. I had thought Justice Ginsberg, through a comment of hers in a dissenting opinion four years ago, would be solidly in the column of New Jersey, but she was hard to read, as was Justice Kagan, with pointed questions to each side. Justice Thomas did not ask any questions which, I am told, is standard operating procedure for him.

Prediction

A ruling in Christie v. NCAA (whose names will change to Murphy v. NCAA in January when the new Governor is sworn in) may come as early as February or as late as June. If pressed to hazard an informed call, I would predict a 6-3 judgment in favor of New Jersey. Whether it will be more sweeping and allow for all states to follow suit, in keeping with the theme here, I would put the odds of that at 50/50.

I make this prediction having seen the arguments today and for the reasons above, but predicted a similar result coming into today. The Supreme Court takes roughly 1% of cases that petition for hearing. Its reversal rate of lower court opinions is around 75%. It took this case over objection from the U.S. Solicitor General (who also argued today on behalf of the sports leagues). Simply, there was a reason the Court took this case.

Post-Christie World

What would a win for New Jersey look like? It depends on whether it comes from a declaration that PASPA is unconstitutional or a New Jersey-specific ruling allowing that state’s partial repeal while keeping PASPA on the books. In either case, New Jersey would start implementing sports betting literally the moment the decision comes down. And if PASPA is declared unconstitutional, it would start a chain reaction with other states poised to immediately jump in (Pennsylvania, New York, Mississippi and Connecticut are set up and ready to start allowing bets to be taken, upon this result). If the ruling is New Jersey-specific, each state will analyze whether to take the “New Jersey route” and partially, or fully, repeal one of its own laws.

What would a win for the sports leagues look like? Status quo for the foreseeable future, as Nevada would continue to monopolize legalized U.S. sports betting in some fashion. The leagues, however, would be actively lobbying Congress to amend or replace PASPA with a more modernized statute that protects their interests and recognizes societal change on this issue. (I am sure that process has already begun.) As I continue to point out, it will become increasingly difficult for the sports leagues to reconcile their mixed messages regarding sports gambling.

NBA commissioner Adam Silver has advocated for a legalized gambling framework for years. Major League Baseball commissioner Rob Manfred has called for a re-examination of sports gambling. And the two more reticent leagues, the NFL and NHL, have lost moral ground in the integrity space, having both placed franchises in Las Vegas.

I recently shared a panel with Ted Leonsis, owner of the Washington Capitals and Washington Wizards and a legalization advocate, who may have said it best regarding legalized sports betting: “What are we afraid of here?”

Beyond the case, of course, my constant message is that there is now a certain inevitability about sports betting. Whether the Supreme Court accelerates legalized sports gambling or not, it is coming. Bet on it.

Three Thoughts on the Giants Housecleaning

• I remember during the hiring season in January 2016 that McAdoo was the “hot candidate,” with the Giants locking him down before teams like the Eagles got him and, according to many, had to “settle” for Doug Pederson. Pederson is now a leading candidate for coach of the year.

• As many know, I worked with Ben in Green Bay and saw him as a successful and thriving tight ends coach. The transition to offensive coordinator seemed to work well for him but did not appear to be the same moving to the head coach position.

• I know the interim general manager of the Giants, Kevin Abrams, quite well. He is a smart, balanced and thoughtful administrator who has experience in contract and cap management as well as college and pro scouting. I am a fan.

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