Sports Law Blog
All things legal relating
to the sports world...
Thursday, March 31, 2011
ESPN Sues Conference USA
ESPN is reporting that it has filed a lawsuit against Conference USA, accusing the conference of breach of contract. Specifically, ESPN alleges that the conference breached a 2005 agreement by failing to provide the network with an opportunity to match the $42 million television broadcast agreement that C-USA recently signed with the Fox network. ESPN is requesting either $21 million in damages, or specific performance of an alleged contract extension it asserts the parties had reached in principle prior to C-USA signing its deal with Fox. Meanwhile, C-USA denies that it breached any agreement with ESPN.
Sports Law Blog on the Rise
Over on TaxProf Blog, Paul Caron has his annual traffic rankings for law professor blogs, and Sports Law Blog is #22 among them in terms of visitors and #23 in terms of page views. His numbers also show a 9% increase in visitors to our blog, and an 8% increase in page views on our blog, from 2009 to 2010. As always, we appreciate you checking our blog out and seeing what we have to say.
Wednesday, March 30, 2011
New Sports Illustrated Video on Eller v. NFL
I was interviewed by Maggie Gray of Sports Illustrated/CNN video to discuss a new lawsuit filed by Carl Eller, Priest Holmes and others on behalf of retired and prospective NFL players. Their core argument is that the NFL lockout and various NFL restrictions on trade, including the draft, are illegal under federal antitrust law -- an argument also made in Brady v. NFL -- but unlike current NFL players, retired and prospective players are not members of the NFLPA bargaining unit. These players believe they too will be harmed by the lockout (for instance, various health-related programs for retired NFL players are funded in part by fines imposed on current players; with no football, no fines will be levied, and retired players' programs will lose funding). In response, the NFL will likely argue that while they are not bargaining members of the NFLPA, the NFLPA nonetheless represents their interests. Here's the video:
Tuesday, March 29, 2011
My interview for PBS Frontline on O'Bannon v. NCAA
Here's a link to a transcript of my interview with Lloyd Bergman of PBS. The transcript is admittedly long - the interview was for over an hour and we covered a TON of ground for PBS' March Madness and Money feature.
Here's an excerpt from the transcript:
PBS: How significant is this case?
McCann: It's a very significant case, particularly because it's past the motion-to-dismiss stage. A motion to dismiss is an argument by the defendant that, even if all of the facts are true, there's no viable legal claim. Well, the NCAA lost the motion to dismiss, and it's now going to trial. Normally, cases against the NCAA have not succeeded, either because of motions to dismiss or because they're settled. O'Bannon, though, seems to signal that he isn't going to settle, that he's actually going to go forward with this case, and he's going to try to win it.
And if he wins it, it would mean that retired players, including those who have been retired for a while, should be compensated for their use and image and likeness that the NCAA contracted away.
PBS: Well, you said something called the "right of publicity." What is that?
McCann: The right of publicity is that we have certain proprietary interests in our identity, that if somebody is going to try to make money off our image, our likeness, our name, that we should be compensated for that. Now, there are exceptions to that. There's a newsworthiness exception, for instance. If we're in the public news because of something we did or because we happen to be there, we're not going to be compensated. There's also an exception for parody. In other words, if we went on a television show and somebody parodied our appearance, we wouldn't be compensated for that.
But if somebody is just trying to make money off our image or likeness, we have a legal right, under state laws, to be compensated for that.
PBS: Let me put it a different way. O'Bannon, all the college athletes today, student-athletes, they all sign this form, right? And it's our understanding that this form has a clause in it that says you're signing away all your rights, basically, to the NCAA and to the school that you went to. So what's this litigation all about?
McCann: O'Bannon would argue that the Student-Athlete Statement, which, as you noted, Lowell, is required of students to sign if they want to play college sports -- students who may be 17 or 18 years old know that if they don't sign that statement, they will not be able to play sports. And if they can't play sports, they may not get their scholarship. And if they don't get their scholarship, they may not be able to afford school. So O'Bannon is saying, well, that's not really much of a choice, is it, because you're required to sign this form.
Not only does it seem as if we don't have a choice, but the form itself shouldn't have the meaning that the NCAA seems to perceive. The form means that players give up their proprietary interest while they're in college, so the NCAA can use their likeness and image while they're in college to promote the NCAA and to promote the colleges that the players are associated with.
O'Bannon is saying, even if that's OK, which he doesn't seem to concede, but even if that's OK, it shouldn't continue after I've left school, because the NCAA, as it's argued, is concerned about the exploitation of student-athletes; that if they were to be able to do their own deals while in college, there would be charlatans who exploit players and the like. But O'Bannon is saying: "I'm 39 years old. Why is it that I need to be protected by the NCAA nearly 20 years after I played college basketball? I should have a right to get paid. That form shouldn't take the effect that the NCAA seems to interpret."
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PBS: Yeah. But I mean, the players who make the money, because there's a very small group of players who bring in that revenue, right?
McCann: Sure. I think you could say that the superstar player generates a disproportionate share of the fan's interest of the commercialization of sports. When O.J. Mayo plays one year [of basketball] at the University of Southern California, and he's put on the cover of the brochure, and he's highlighted, he clearly is generating revenue for the University of Southern California. This is somebody who is attracting renewed interest in a program that had not attracted a lot of interest in years prior.
I don't know if the 11th and 12th persons on the bench are generating that same value. They're clearly not. You know, the random offensive linemen on a top college football team, whom we don't know the name of, how much value is that player contributing? Well, in the sense that he's playing on a team that's doing really well, he's contributing value. But independently, how much value is he contributing? I think that's a harder call. And I think that's what is going to make compensating athletes a difficult challenge, certainly not an impossible challenge, but it's figuring out who gets what ... If it were a professional league, then we would know what they get, because there's a market for services.
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PBS: But this is the only country that I know of that has sports teams associated with universities and institutions of higher learning in a billion-dollar industry, and is tied that way. I mean, this is a pretty unusual situation, isn't it?
McCann: It is, and in other countries, for instance in Europe, we don't see the same college sports system. We see a professionalization of youth sports. We see if you're a 13- or 14-year-old star basketball player, you don't have to wait until you're 19 years old and one year removed from high school to play in the NBA. You can sell your services as a teenager and make money at that point, or you can join some other kind of pro league in another part of the world.
Only in the United States do we have this very extensive and popular system of college sports that has had the effect of reducing the compensation and, in some cases, eliminating compensation for those who are playing the sports. When you couple that with age restrictions in order to enter the NFL and the NBA -- and, of course, in college sports, at least 90 percent of the revenue is generated by football and men's basketball -- then you could see a real injustice.
You have players who can't turn pro because of an age restriction. Then they have to go to college, if you will, to play maybe for a school that they have no interest [in] being a student at. Where do they go? Well, they can go to Europe if they're a basketball player, perhaps, but not many have done so. They're in a difficult situation. I think the ones who are generating so much of the wealth, the star players, are the ones who are so clearly disadvantaged by this system.
PBS: So it's an antitrust case.
McCann: It is an antitrust case, because the current system is set up in a way that boycotts players who would otherwise be commercially viable from being able to use their services. And that, arguably, makes the market less competitive.
Now, the question is, who gets sued there? Do you sue the professional sports leagues and the players' associations that have created barriers to entry? Well, that's been done in the past. The difficulty is that courts say, if the owners and the players get together and negotiate a rule, it's largely immune from federal antitrust law. And of course, you could say, well, that doesn't seem fair, because the players' association is looking out for current players. Why should they create a barrier that prevents prospective players from entering the league, because if they could enter, they're going to take jobs away from the 12th guy on the bench. That doesn't seem like a fair system. But that's how federal labor and antitrust laws are set up. Current employees can negotiate on behalf of prospective employees. It may seem fair in some contexts, but I think in professional sports it really isn't.
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Two Great Nights of Sports Law Related TV
1) Tonight at 9 p.m., PBS Frontline will air a feature on "Money and March Madness". It will primarily be about the O'Bannon v. NCAA lawsuit and will include interviews with Ed O'Bannon and Sonny Vaccaro, who last Friday delivered an outstanding keynote address at Harvard Law School's sports law symposium and who was recently the subject of a very interesting piece in the New York Times.
2) Tomorrow night at 10 p.m. HBO Real Sports will air a 1-hour feature on College Sports in America (Part I can be seen here; Part II here). Here is more info on the HBO feature:
New sports law scholarship
Recently published scholarship includes:
Sunday, March 27, 2011
MIT Sloan Sports Analytics Panel on "The Coming War: Sports Labor Relations"
Earlier, this month I joined several panelists -- Russ Granik (former NBA Deputy Commissioner), Tom Penn (ESPN analyst and former Blazers Assistant GM), George Postolos (former President and CEO of the Rockets), and Andrew Zimbalist (noted sports economist at Smith College) - at the 2011 MIT Sloan Sports Analytics conference to discuss labor wars in the NBA and NFL. The panel was moderated by Jackie MacMullan, an ESPN columnist and author of several books, including a forthcoming one on Shaquille O'Neal.
Here is the video of our panel discussion:
Friday, March 25, 2011
Dr. John Carlos to Speak at the West Virginia University College of Law
Dr. John Carlos, who along with Olympic teammate Tommie Smith were criticized for protesting on the medal stand at the 1968 Mexico City Games, will discuss the evolving role of African American athletes in American culture and politics in a speech sponsored by the West Virginia University College of Law Sports and Entertainment Law Society.
Carlos will speak at noon on Thursday, March 31, 2011 at the Marlyn E. Lugar Courtroom in the WVU Law Center.
Thursday, March 24, 2011
Top Rank v. Golden Boy -- the Sequel
Although legal disputes involving boxing do not occupy a large portion of my class time, there have been cases, notably involving breaches of contracts among boxers and promoters, that make for interesting reading and discussion. I use one or two to prove breach, damages and remedies. One of my favorites is Lewis v. Rahman, a courtroom brawl (if you will) that involved heavyweights Lennox Lewis and Hasim Rahman, where the court enjoin Rahman from engaging in any other fights over a 18-month period under he fight Lewis for the championship. For those teaching, it merits discussion of the outer limits of a "negative" injunction.
Here's another potential case. One of my MBA students pointed to potential controversy involving the promoters Top Rank (of Bob Arum fame) and Golden Boy Promotions (founded by Oscar de la Hoya about 10 year ago). The dispute involves the signing of highly-touted Philippine bantamweight champion Nonito Donaire by Golden Boy this week. Reports state that Golden Boy offered Donaire a bigger purse for an upcoming fight for the WBA bantamweight championship. However, Top Rank claimed he is presently under contract and is considering legal action.
The stakes are high because Donaire already won the bantamweight championship of two of boxing's myriad governing bodies last month, the World Boxing Council and World Boxing Organization, raising his profile and market value. Yet, the case is reminiscent of a similar dispute about five years between the same parties of the fate of another Philippine boxer, Manny Pacquiao. That case was settled by arbitration in 2007, although there is subsequent litigation over claims that Top Rank underpaid Pacquiao.
Since both contracts are promising to arrange the same bout, injunction is not a practical remedy. But, just to hypothesize, what is the Golden Boy deal offered a different fight in June? Would Donaire be determined "unique" to stop him from boxing? My guess would be yes -- as a boxing champion and a potential moneymaker.
2011 Southwestern Law School Sports Law Symposium
Darren Heitner has the story over on Sports Agent Blog (one of my favorite blogs, by the way) on this excellent upcoming symposium at Southewestern Law School in Los Angeles. Sports Law Blog contributor Warren Zola is one of the panelists and there are many other great panelists, too:
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What: Business of Amateur Sports Symposium at Southwestern Law School
When: April 8, 2011 (9:15 a.m. – 7:00 p.m.)
Where: Southwestern Law School (map)
The Business of Amateur Sports is a one-day symposium featuring leading experts exploring some of the most timely and important questions facing collegiate sports today: regulation of agents and discipline of student athletes; the latest medical science on sports-related concussions, and how it may impact safety rules and legal liability; media deals and marketing in college sports, including the use of student-athlete names and likenesses; and the federal antitrust implications of college football’s Bowl Championship Series.
9:15 - 10:00 a.m.: Check-in/Coffee
10:00 - 11:30 a.m.: Pre-Professional Athletes in an Amateur World: NCAA Rules, State Laws, Agents and Extra Benefits
11:30 - 11:45 a.m.: Break
11:45 a.m. - 12:45 p.m.: Concussions, Law and Amateur Sports: Implications of Emerging Medical Science for the Regulation of Student Athlete Safety
1:00 - 2:30 p.m.: Lunch and Special Guest Conversation
2:45 - 4:15 p.m.: Big Brands and Bigger Budgets: Marketing, Merchandising and Media Rights in College Sports
4:15 - 4:30 p.m.: Break
4:30 - 5:30 p.m.: The BCS and Competition: An Antitrust Analysis of College Football’s Bowl Championship Series
5:30 - 7:00 p.m.: Cocktail Reception
Cost: $85 (General admission), $25 (Students). Register here. 6 CLE credits offered.
Rutgers-Camden School of Law Sports Law Panel
Next Monday, March 28, the Rutgers School of Law Camden Sports & Entertainment Law Society will be hosting a sports law panel with an NFL-focus:
Join us for an evening with a distinguished group of sports law industry professionals.
Wednesday, March 23, 2011
On Creeping Underwear, Drooping Pants, and the NFL Personal Conduct Policy during the Lockout
Dress codes often generate controversy. Consider the debate following the NBA adopting an off-court dress code 5 years ago. Dress codes attract critique because they normally limit attire choices to those considered mainstream, while disallowing dissenting styles, typically on grounds that unconventional attire can be "unprofessional" or "inappropriate." From time-to-time, dress codes have also been viewed as insensitive to various race, ethnic, gender, and religious concerns. Nonetheless, dress codes are usually legal, and that is true of those imposed by malls, which want to ensure a positive shopping experience for customers.
Would a rule that doesn't let a mall patron show his/her underwear be a rule that you support or find offensive? Count me in the support category.
Dallas Cowboys wide receiver Dez Bryant may not agree. He learned about such a rule this past weekend when he and three friends were kicked out of NorthPark Center, an upscale Dallas shopping mall.
Their mistake? Wearing "drooping pants", which apparently is another description of sagging pants, the effect of which is to expose one's underwear, a violation of the mall dress code. To compound Bryant's problem, he got into an argument with police officers who were working off-duty as security officers at the mall and was issued a criminal trespass warning:
According to the official police report, Bryant and three friends were stopped by the uniformed, off-duty officers working security shortly before 8 p.m. at the popular shopping center after they were observed "wearing their pants halfway down their hips exposing their underwear."To read the Dallas Police Report, click here. Bryant, for his part, claims his pants were actually up and that he was respectful to the officers.
While the facts of the incident are in question, the incident is clearly embarrassing for Bryant and the Cowboys, and maybe the NFL, too. And under the NFL's Personal Conduct Policy, commissioner Roger Goodell can issue a sanction for any behavior that he deems detrimental to the league's image.
But is the league's personal conduct policy still in effect during the lockout? The league says yes and that it will assign penalties for misbehavior during the lockout after the lockout ends. The NFLPA has chosen not to opine on whether the policy is still in effect.
I'm not sure the league is right. During a lockout, a player is completely separated from his employment with the team and the league as a whole - and, unlike with a player strike, the only way for that separation to end is for the league to end the lockout. The player can sign with a team in another pro football league or take on some other employment; he's not getting paid any salary or receiving any benefits from his NFL team, so why should he be obligated to follow the NFL's personal conduct policy?
Tuesday, March 22, 2011
How I got into sports law and the NFL Lockout
Jared Pendak of the Valley News (serving Hanover New Hampshire and surrounding community) interviews me about how I got into sports law and also about the NFL lockout. Here's an excerpt:
To read the rest, click here.
Monday, March 21, 2011
Barry Bonds Trial Begins
Jury selection in the Barry Bonds perjury trial takes place today, with opening statements by the prosecution and defense set for tomorrow. I discuss the trial with NPR today on the Morning Edition program.
Update: I have a new column for Sports Illustrated laying out the prosecution's case against Bonds. Please also check out George Dohrmann' SI column laying out the defense.
Update 2: I have an interview with Maggie Gray of Sports Illustrated Video to discuss the trial.
Sunday, March 20, 2011
Sports Law Blog Sparring Session Round I
This is the first post in a series of posts that will review of legal, regulatory, and contractual Issues in Boxing and MMA from the past several months. These posts are largely taken from a longer article I wrote for 8 Count News.
Could Tyson Get Crapped on for Keeping Pigeons in New York?
In honor of the debut of Animal Planet’s “Taking on Tyson,” I took a moment to research whether it is illegal to raise pigeons in New York, Mike Tyson’s home state. The answer, in short, is no, unless he does so without a permit or in contravention of local law, or the government or administrative body in question finds the subject pigeon coop to be a “menace to public health” or a “public nuisance.” Pigeons are also not permitted to be taken “in a manner which will endanger other animal life, persons or property.” As far as other legal rights and issues facing “Taking on Tyson,” PETA has, of course, exercised its rights under the First Amendment to oppose the show since they believe that Tyson’s housing of pigeons and use of them for sport constitutes cruelty to animals. This author, for one, would not want to be the person to throw animal’s blood on Tyson in any protest.
Not Everything is Coming Up Sweet for “Kid Cinnamon” This Year
He might have laid waste to Matthew (Magic) Hatton this past weekend, but there is one opponent on the horizon that may score a knockout over surging junior middleweight contender Saul (Canelo) Alvarez: All- Star Boxing. Back in late January, All-Star Boxing filed a lawsuit against Canelo (Spanish for “cinnamon tree”) and his promoter, Golden Boy Promotions, in Florida alleging breach of contract as to Alvarez and tortious interference in contractual relations against Golden Boy. Here’s assuming that Golden Boy will find some sugar to sprinkle on All-Star Boxing (or bury it in dispositive motion papers) to make sure that Canelo will be free and clear to add a jolt of flavor to their events for many years to come.
Daniel Podiatrist de Leon?
The co-main event of Alvarez-Hatton featured one of the more novel corner instructions that the author can recall: step on his foot. As translated by HBO, that is exactly what Daniel Ponce de Leon was told to do early in his mysteriously unsuccessful bout against undefeated super featherweight prospect Adrien (The Problem) Broner. And that is exactly what Ponce de Leon did, quite conspicuously, over the next several rounds. Should the referee have admonished Ponce de Leon, or have taken away a point for his repeatedly stepping on, or trying to step on, Broner’s foot? Under New York law at least, deliberately stepping on your opponent’s feet is not listed as either a major or a minor foul. Stomp on then, young warriors!
Michigan Leaves No Room for Mishegas in its Enforcement of Its MMA Regulations
Michigan, which began regulating mixed martial arts last year, made headlines back in late January when it was reported that it has now filed its inaugural complaint for violations of its new regulations. The respondent to this complaint was Stephen George Daher, a licensed timekeeper in the employ of the Michigan Unarmed Combat Commission, who was accused of not timely stopping the first round of the middleweight bout between Maiquel Falcao and Gerald Harris during UFC 123. The author will keep an eye on this matter to see if Michigan gets to successfully send a message to stay in strict compliance with its new rules.
Will 2011 Be the Year That Jack Johnson Scores His Final Knockout?
Arizona Senator John McCain and New York Representative Peter King announced recently that they plan to reintroduce a Congressional resolution urging a pardon of former heavyweight champion Jack Johnson, who was convicted in 1913 of violating the Mann Act for allegedly transporting a woman across state lines for immoral purposes by an all-white jury. A racially polarizing case for generations and blot on the history of the American jury system, here’s hoping the resolution finally passes after several previous efforts and President Barack Obama, the first African-American president, takes the opportunity to pardon Johnson, the first African-American to win world heavyweight championship.
Friday, March 18, 2011
Ranking college sports loyalties
My Prawfs co-blawger Matt Bodie offers a ranking of college sports loyalties--covering everything from undergrad institution to law school to current employer to spouse's teams to hometown team. Offer your comments here or at Matt's post.
2011 Tulane Law School Moot Court Mardi Gras Invitational Sports Law Competition
Congratulations to the all of the participants in the 2011 Tulane Law School Moot Court Mardi Gras Invitational Sports Law Competition. All of the judges were impressed with the quality of the teams from the first round through the finals. I hope you enjoyed the competition and were able to find some time to take advantage of all that New Orleans has to offer (well, maybe not all of it) during Mardi Gras. Special thanks to Mary Jones and the Tulane Moot Court and Diana Taylor and the members of the Sports Lawyers Journal for the help in putting together the competition. Thanks also to Stan Kasten for serving as our celebrity guest judge in the finals.
The Winner of the 2010 Competition was: Florida Coastal School of Law (Drew Parrish-Bennett and Dazi Lenoir Williams)
The Runner-Up: Loyola New Orleans (Matt Cutrer and Luke Larocca)
Semi-finalists: Southwestern School of Law and Emory Law School
The best brief was submitted by: University of Arizona College of Law.
Best Oralist: Sarah Gale-Barbantini (Wayne State University Law School)
2nd Best Oralist: Drew Parrish-Bennett (Florida Coastal School of Law)
3rd Best Oralist: Mark Ellinghouse (UC Davis School of Law)
Competitor of the Year: Drew Parrish-Bennett from Florida Coastal
Thursday, March 17, 2011
2011 Yale Law School Panel on Sports and the Law: Current Issues
On Monday, April 4, from 6:30 to 8:00 p.m., the Yale Law School Sports and Entertainment Law Society will be hosting a panel on contemporary sports law issues. The panel will be open to the public.
Topics will include the NFL lockout, the possible NBA lockout, age and autonomy restrictions on professional athletes, digital media and the law, antitrust and sports, and many other topics.
Excellent work by Benjamin Aronson and Javier Zapata, the Yale Entertainment and Sports Law Association Co-Chairs, in putting this event together.
Sports Law Career Opportunity
The Oakland Athletics are currently looking to hire an assistant legal counsel with at least 4 years of experience in a corporate/transactional practice. For more information regarding the position, check out the job ad available here.
Wednesday, March 16, 2011
Indiana Finds Fault in Death of Notre Dame Student Declan Sullivan
On Sports Illustrated Video I discuss the implications of yesterday's findings in the death of a Notre Dame student who was killed when the hydraulic lift he was on while taping a team football practice fell over in 53 mph winds.
Do fans appreciate taxes?
Via Paul Caron (TaxProf Blog and my source for all things tax-and-sports) comes the story of Bob Choate, a Houston Astros fan who last year won a year's supply of coupons to a Houston donut shop at Fan Appreciation Day and now is being taxed on more than $ 900 in "free" donuts.
Tuesday, March 15, 2011
New Jersey Sports Betting Lawsuit Dismissed
The prospect of Vegas-style sports gambling in New Jersey took a hit on March 7, 2011 when Chief Judge Garrett E. Brown of the United States District Court of New Jersey dismissed a long-percolating federal lawsuit challenging the constitutionality of the Professional & Amateur Sports Protection Act (“PASPA”). The 19 page opinion has yet to be posted on the court’s website, but the decision is available via PACER. Passed in 1992, PASPA prohibits sports betting in all states except for Nevada, Delaware, Montana, and Oregon. New Jersey State Senator Raymond J. Lesniak and Stephen M. Sweeney, along with a number of pro-gambling trade associations, sought to invalidate PASPA on constitutional grounds, thereby allowing New Jersey (and, presumably, other states) to offer state-regulated sports wagering. New Jersey Governor Chris Christie declined the opportunity to intervene in the lawsuit as an additional plaintiff. The lawsuit suit was filed in 2009. U.S. Attorney General Eric H. Holder, the U.S. Attorney for the District of New Jersey, and unnamed sports organizations were listed as defendants.
The plaintiffs put forth a multi-pronged argument based on the U.S. Constitution. Specifically, they claimed that PASPA violates the following constitutional provisions: (i) the Commerce Clause; (ii) the First Amendment’s protection of expression and assembly; (iii) the Tenth Amendment; (iv) the Eleventh Amendment; (v) the Due Process Clause; and (vi) the Equal Protection Clause. Instead of contesting the lawsuit on substantive grounds, the U.S. government moved to dismiss the lawsuit procedurally for lack of standing and failure to state a claim.
Citing Supreme Court cases familiar to every first year law student, Chief Judge Brown addressed the standing issue. The judge cited Lujan v. Defenders of Wildlife for Article III’s requirement that federal judicial review be limited to actual cases and controversies. Likewise, Chief Judge Brown quoted FW/PBS, Inc. v. City of Dallas for the proposition that the plaintiff must “clearly…allege facts demonstrating that [it] is a proper party to invoke judicial resolution of the dispute” (p. 6). The plaintiff trade associations were found to have no standing on this basis.
In connection with New Jersey Senators Lesniak and Sweeney, the judge provided additional reasoning and specifically addressed the fact that the New Jersey legislature recently passed Senate Concurrent Resolution No. 132 (“SCR 132”). If approved by popular vote in November 2011, SCR 132 would amend the New Jersey constitution “to permit the legislature to authorize sports wagering at Atlantic City casinos and certain horse racetracks, so long as the gambling did not extend to sporting events taking place in New Jersey or involving New Jersey collegiate teams” (p. 4). The judge posited that the Senators’ SCR 132-related argument for standing “puts the cart before the horse” given that SCR 132 has yet to be voted on, let alone approved. Accordingly, Chief Judge Brown found Senators Lesniak and Sweeney to lack standing to challenge PASPA’s constitutionality. Under New Jersey law, “the proper party to bring such a claim would be New Jersey’s attorney general, but the governor and attorney general have not intervened in this lawsuit” (p. 18).
It isn’t particularly surprising that certain New Jersey lawmakers are looking to sports-based gambling as a way to increase state revenue. According to a recent Pew Research report, 33% of American men gamble of sporting events. In 2009, $2.57 billion was wagered legally in Nevada, although the amount of action in Nevada-based sports books probably only represents 1% of all sports bets made nationwide. The illicit nature of some gambling, coupled with the availability of the Internet, has caused the popularity of off-shore sports wagering to explode during the past fifteen years. The passage of the federal Unlawful Internet Gambling Enforcement Act in 2006 has done little to diminish online/offshore sports gambling. As a result, internet sports wagering is largely unregulated, potentially depriving certain states and municipalities of tax revenue. A 2011 Contemporary Economic Policy by Douglas M. Walker and John D. Jackson article investigated whether state-sponsored gambling increases revenue. The authors found that lotteries and horse racing did contribute to the bottom line, but casinos and greyhound racing did not.
The future viability of sports betting in New Jersey now seemingly rests with the state’s voters. If SCR 132 is approved, it is possible (probable?) that Governor Christie and the New Jersey Attorney General will feel compelled to re-institute the lawsuit. Given that Chief Judge Brown decided the case on procedural, not substantive, grounds, such a reincarnation would not have the hurdle of any adverse precedent, as the constitutional claims promulgated by the plaintiffs in the just-dismissed case were not at issue.