Feds Enter Fray Over New Jersey Sports Betting

Published On January 27, 2013 | By Ken Dreifach | General, Internet Gambling & Fantasy Sports

The Justice Department last week filed a Notice of Intervention in NCAA v. Chris Christie — the New Jersey Sports Betting litigation —  to defend the constitutionality of the 1992 Professional and Amateur Sports Protection Act.  The dispute arises from New Jersey’s passage in 2012 of  legislation permitting sports betting at its beleaguered casinos and racetracks — even though PASPA limits sports betting to those four states (Oregon, Nevada, Delaware and Montana) that had permitted and conducted it as of the passage of the bill.  (New Jersey did not, and therefore is prohibited under PASPA from offering sports betting.)

In response to New Jersey’s sports betting law, the four major sports leagues and NCAA filed suit, alleging New Jersey’s act violated PASPA.  The district court in New Jersey held that the leagues had standing to sue.

The DOJ now has asked the court for permission to file a brief defending PASPA’s constitutionality.  It has requested time to file by February 1st, and for permission to participate in oral argument to be held on February 14, 2013.  DOJ’s participation is not considered a surprise, as it is common for DOJ  to participate in an action directly and specifically contesting the constitutionality of a federal statute.

As to PASPA itself, the argument that the federal law is unconstitutional revolves around states’ rights.  Under the 10th Amendment, for instance, there exists an argument that local casino gambling is the type of local regulation reserved to the states — particular when there is little or no conventional “interstate” component to it.   (Prior challenges have raised the 10th Amendment argument, but those cases were dismissed for lack of standing.)  Likewise, under the 11th Amendment, there exists an argument that Congress may not effectively waive new Jersey’s sovereign immunity absent a valid basis — such as under the Commerce Clause.  Similar to the 10th Amendment argument, if New Jersey can demonstrate that only “intrastate” activity is at issue, and that no strong factual or policy showing exists that PASPA keeps gambling from spreading or affecting interstate commerce, that may persuade the court that the federal Commerce Clause is not a valid basis for PASPA.

 

About The Author

Ken counsels clients on complex issues involving information privacy and data law, online liability, consumer regulatory and gaming law, including regulatory response, and adherence to self-regulatory guidelines for online advertising. Ken has had more than twenty years of experience in high-profile regulatory, in-house and private practice roles, including as Chief of the New York Attorney General’s Internet Bureau. He is one of the nation’s leading authorities on the relationship between emerging advertising technologies and online privacy.

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