Friday, April 4, 2014

Betting on New Jersey

Indulge me today as I try something a bit different. This post is about the Jersey shore, gambling, federal law, freedom, silly laws, Governor Christie, and Atlantic City.  After you read the blog post, please leave me a comment and let me know if you found this piece interesting.  Thanks!

Unless you live under a rock, you know that we are in the midst of “March Madness.” “March Madness” does not refer to how most New Jerseyans feel after this last winter. Rather, it is a term coined in Illinois to describe high school basketball and then made ubiquitous when legendary broadcaster Brent Musburger made it his own as it relates to big-time college basketball. “March Madness” describes the NCAA College Basketball tournament that dominates the sports world for the better part of March and into the first week of April each year.

Madness, depending on your perspective, may also describe the federal government’s decision to make sports gambling illegal throughout this fair land . . . except for in Nevada, Oregon, Montana, and Delaware. I understand that some of you may partake in a little illicit gambling on the NCAA tournament each year. You know who you are. And although the government typically looks the other way regarding these pools (or considers them not illegal gambling for a variety of reasons), the fact remains that for the most part sports gambling is prohibited everywhere in the United States except for those four states listed above – most notably Nevada – and just as notably not in New Jersey.

Why is this so? Because, a little over 20 years ago, Congress passed a law that prohibited sports gambling anywhere except for those four states. Theoretically, Congress passed the law, called the Professional and Amateur Sports Protection Act of 1992 (“PASPA”), so as to combat the scourge of sports gambling and its impact on amateur and professional sports. To address that concern, the law forbade a state from authorizing, licensing, or operating sports gambling. And whatever the merits of that concern, Congress undercut the sincerity of its concern for the issue when it exempted those states from the law. Some would say the law is a form of federally-endorsed economic protectionism that favors those four states over the other 46 states.

To its credit, Congress used the law to open a window for New Jersey to change its own law to allow sports gambling. If New Jersey did so – quickly – then New Jersey could have also had legal sports gambling, according to PASPA. Clearly, Congress opened the window so as to allow for sports gambling in Atlantic City. But for whatever reason, New Jersey did not act to amend its law at the time in 1992 to allow sports gambling and the window that PASPA opened for New Jersey closed. Nevada remained – and to this date, remains – the primary state in the country where sports gambling is legal and a multi-million dollar business.

There is little question that Atlantic City could use an economic boost, and few could argue that legal sports gambling would not provide such a boost. To that end, the people of New Jersey amended their constitution to allow for sports gambling in 2010, and then the Legislature and Governor Christie approved a state licensing scheme for businesses that wished to become involved in sports gambling. And, as so often happens when someone wants to shake things up, somebody sued.

The NCAA, Major League Baseball, the NFL, the NBA, and the Feds sued. They pointed out that PASPA prevented New Jersey from licensing sports gambling, and the leagues suggested that gambling on sports negatively affects their sports.

Think about that latter argument for a second. Then think about how sports betting lines are printed in most every daily newspaper, are all over the internet, and are talked about on the airwaves and on television each and everyday. People don’t play “fantasy sports” because they like to follow certain athletes. They play them as a form of gambling. And, not surprisingly, the rise of fantasy sports has tracked a rise in popularity in the sports leagues – those same sports leagues that are now suing New Jersey.

In response to the sports leagues’ and the feds’ arguments, New Jersey suggested to the courts that Congress could not favor one state (or four states) at the expense of all the other states, and also suggested that the sports leagues had no standing to object to the New Jersey law, because the sports gambling did not directly impact their sports.

To date, the sports leagues and the feds have won the argument. Currently, New Jersey is precluded from allowing the legal sports gambling that the people of New Jersey want, and the courts have told New Jersey that, in the face of the federal law PASPA, it had no legal authority to approve licensed sports gambling.

But, depending on the highest court in the land, that all could change. Governor Christie has challenged the federal courts’ decision, and the justices of the Supreme Court of the United States are currently considering whether to hear the case. If nothing else, Governor Christie has hired the right lawyer to make the state’s case. Ted Olsen, who you may remember from the Bush vs. Gore election litigation in 2000 or from the more recent litigation over California’s gay marriage debate, will argue New Jersey’s case. This is a battle that Governor Christie clearly intends to win on behalf of the people of the state that voted in favor of amending the state constitution to allow for sports gambling.

I work for a law firm – Pacific Legal Foundation – that has argued in favor of the State of New Jersey’s position regarding sports gambling and the impropriety of PASPA. I look forward to seeing whether the Supreme Court agrees to hear the case and overturn the federal law, or whether it allows the protectionist federal law to remain in place, to the economic detriment of Cape May’s sister shore town up the coast.

If it leaves the law in place, you might call that decision a different kind of March Madness.

This entry cross-posted at my legal blog: millerappellate.com


  1. This was very informative and well written. i was not aware of the window of opportunity had passed. It would cleary provide a shot in the arm for Atlantic City should this be allowed. Certainly it is needed.

  2. P.S. thank you John for tweeting it at @VisitAC as I went and tweeted it again with that twitter handle so that they may pick up on the post.