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Sunday, January 15, 2017
Decision Day on New Jersey Sports Betting: What Are The Chances?

On Tuesday at 9:30 am (EST), the United States Supreme Court will issue its "Orders List" announcing the fate of the various petitions which the Court considered at its weekly conference on Friday. (A link to the court website page containing the weekly orders can be found here). For proponents of New Jersey's years-long effort to legalize sports betting, Tuesday is the moment of truth, as the fate of the State's two petitions (one filed by Governor Christie and several other state officials, and the other filed by the New Jersey Thoroughbred Horsemen's Association) will likely become known, since those two were among the approximately 132(!) petitions that were on the slate for Friday's conference. If New Jersey's petitions are granted--and the odds are stacked heavily against it since the Supreme Court grants review in fewer than 2% of cases (although that number is skewed by the abundance of petitions filed by unrepresented parties, prisoners, and the vast array of litigants who truly have no shot at obtaining certiorari review)--it could be a key turning point in the ongoing debate to legalize sports betting. If review is granted, it would mean that four out of eight Justices (the ninth seat has been vacant since the death of Antonin Scalia) voted to hear the case since the Supreme Court usually follows the so-called "Rule of Four" in deciding whether to grant certiorari review. The case would then proceed to additional merits briefing (i.e., new briefs) plus an oral argument during the current Supreme Court term (which ends in June).

Despite the long odds, I believe that New Jersey has a much stronger chance at securing certiorari review than in 2014, when the Supreme Court declined to hear the Christie I case. The "cert-worthiness" of the New Jersey sports betting case actually has little to do with the policy arguments surrounding sports betting, and more to do with constitutional law principles. In both cases, New Jersey challenged the constitutionality of PASPA, arguing that it violates principles of federalism, and, in particular, the Tenth Amendment “anti-commandeering” doctrine, which forbids the federal government from commanding the states to implement federal laws or policies that would interfere with state sovereignty. In this vein, New Jersey argued that PASPA unconstitutionally commandeers the States in two ways: (1) through its “negative command” prohibiting a State from enacting any law authorizing or licensing sports betting, and (2) through its implicit “affirmative command” requiring a State to maintain existing (but unwanted) sports betting prohibitions under state law. 

Where the two cases differ is in how the commandeering argument was applied. In the Christie I case, New Jersey’s anti-commandeering argument was directed to PASPA’s “negative command” forbidding states from licensing or authorizing sports wagering. That was always an uphill battle given the Supreme Court precedent limiting the anti-commandeering doctrine to cases where the federal government requires states to engage in some type of “affirmative activity,” such as taking title to radioactive waste (as in the New York case) or performing background checks on prospective handgun purchasers (as in the Printz case). But this time around, New Jersey’s commandeering argument addresses the flip-side of PASPA: its “affirmative requirement” compelling states to prohibit sports wagering (which would prevent them from repealing their sports betting laws). This view of PASPA fits more neatly into the Supreme Court’s commandeering jurisprudence, and, as such, New Jersey’s prospects for Supreme Court review are arguably enhanced.

The Third Circuit's "bait and switch" on the availability of a "partial repeal" may also enhance the cert-worthiness of Christie II. In the Christie I case, the Third Circuit majority rejected New Jersey’s argument that “repealing” a statute barring sports betting would be equivalent to “authorizing” the activity (which would be barred by PASPA). The majority explained that it would be a “false equivalence” to consider a “repeal” to be the same as an “authoriz[ation] by law” because, following a repeal of prohibitions, “[t]he right to do that which is not prohibited derives not from the authority of the state but from the inherent rights of the people.” “In short,” the majority concluded, New Jersey’s attempt to read into PASPA a requirement that the states must “affirmatively keep a ban on sports gambling on their books” rests on a “false equivalence” between “repeal” and “authorized” and reads the term “by law” out of the federal statute, “ignoring the fundamental canon that, as between two statutory constructions, we ought to prefer one that does not raise a series of constitutional problems.”

But to save PASPA from any commandeering defect, the Christie I majority gave PASPA a “savings interpretation” that would afford states considerable leeway in crafting their own policy on sports betting, including by “repealing” any existing laws. The majority explained that PASPA’s “straightforward prohibition” on state-sponsored sports betting can be recast as providing states with “two choices” that “leave much room for states to make their own policy.” “On the one hand,” the majority declared, “a state may repeal its sports wagering ban, a move that will result in the expenditure of no resources or effort by any state official.” “On the other hand,” the majority continued, “a state may choose to keep a complete ban on sports wagering, but it is up to each state to decide how much of a law enforcement priority it wants to make of sports gambling, or what the exact contours of the prohibition will be.” (emphasis added). The majority acknowledged that “these are not easy choices,” noting that Congress “may have suspected that most states would choose to keep an actual prohibition on sports gambling on the books, rather than rather than permit the activity to go unregulated.” “But the fact that Congress gave the states a hard or tempting choice does not mean that they were given no choice at all, or that the choices are otherwise unconstitutional,” the majority reasoned.

Relying upon the Third Circuit’s majority opinion—which left it to a State to “decide how much of a law enforcement priority it wants to make of sports gambling, or what the exact contours of the prohibition will be”—and taking the Solicitor General at his word that a State may repeal its sports wagering ban “in part,” New Jersey enacted a partial repeal law on October 17, 2014 (the “2014 Law”). The 2014 Law partially repealed all state laws and regulations prohibiting sports wagering, but only in certain circumstances. Specifically, the 2014 Law repealed provisions of New Jersey law governing criminal penalties for gambling, civil penalties for gambling, and other provisions governing wagering at casinos and racetracks, as well as “any rules and regulations that may require or authorize any State agency to license, authorize, permit, or otherwise take action to allow any person” to engage in sports wagering. 

But in Christie II, the Third Circuit disavowed its prior declaration that a "repeal" of sports betting prohibitions would not violate PASPA. It rejected New Jersey’s argument—based on the “false equivalence” language in the Christie I opinion—that a “repeal” removing sports betting prohibitions is not an “affirmative authorization.” Recall that in Christie I, the majority explained that states had two choices under PASPA: maintaining sports betting prohibitions or repealing them. The Christie II majority receded from that earlier statement, declaring that “[t]o the extent that in Christie I we took the position that a repeal cannot constitute an authorization, we now reject that reasoning." The majority characterized its discussion in Christie I of states having “two choices” as mere “dicta” (meaning not essential to the court’s decision).

The Christie II majority's about-face on the availability of a "partial repeal"--and its refusal to pinpoint the line of demarcation at which a permissible partial repeal becomes an impermissible "authorization"--heightens the State's chances for securing certiorari review in my view. As highlighted by the New Jersey petitions (and the amicus briefs), the Third Circuit's new interpretation of PASPA presents a much greater threat to state sovereignty (a key federalism notion) than the Christie I decision because it can be seen as preventing a state from repealing its own laws (with myriad examples highlighted in the State's petitions), and, further, leaves the state without any meaningful (or identifiable) choices. Remember that to "save" PASPA from a commandeering defect, the Christie I majority emphasized that states were afforded a "choice" under PASPA: to maintain their state law prohibitions against sports betting or to repeal them. The Christie II decision all but eviscerates this choice.

The dissenting opinion of Judge Thomas Vanaskie highlights this "flip-flop" by the Third Circuit majority. Judge Vanaskie criticized as “untenable” the majority’s “shifting line approach” to a state’s exercise of its sovereign authority. Judge Vanaskie observed that after Christie I, a state like New Jersey “at least [had] the choice” of either: (1) “repealing, in whole or in part, existing bans on gambling on sporting events,” or (2) “keep[ing] a complete ban on sports gambling.” Such a choice, he explained, was essential to upholding PASPA’s constitutionality in Christie I. By contrast, he wrote, the majority’s decision in Christie II “does not leave a state ‘much room’ at all.” Following Christie II, states “must maintain an anti-sports wagering scheme” by “leav[ing] gambling prohibitions on the books to regulate their citizens.” Judge Vanaskie opined that this essentially “leaves the States with no choice,” adding that “[t]he anti-commandeering doctrine, essential to protect State sovereignty, prohibits Congress from compelling States to prohibit such private activity.”

Judge Vanaskie was also unpersuaded by the majority’s assertion that some partial repeal options “may pass muster” (such as the example involving small wagers between friends and family), noting that the majority “does not explain why all partial repeals are not created equal or explain what distinguishes the 2014 Law from those partial repeals that pass muster.” As Judge Vanaskie explained, “[t]he bedrock principle of federalism that Congress may not compel the States to require or prohibit certain activities cannot be evaded by the false assertion that PASPA affords the States some undefined options when it comes to sports wagering.” Contending that the majority opinion “excised” the distinction between a “repeal” and an “authorization,” Judge Vanaskie declared that it is “clear” that no repeal of any kind will evade PASPA’s command that no State “shall . . . authorize by law sports gambling.” Such commands, Judge Vanaskie concluded, “are fundamentally incompatible with our constitutional system of dual sovereignty.”

Judge Vanaskie's dissenting opinion--and the petitions filed by the New Jersey parties (backed by amicus briefs filed by five states, two conservative think-tanks, the America Gaming Association, and Sports Law Blog contributor Professor Ryan Rodenberg)--highlight the key federalism concerns at the core of Christie II. As the recent filings point out, the Third Circuit's "shifting line" approach to state repeal laws in Christie II presents a much greater threat to state sovereignty (in potentially a wide array of policy-making initiatives going beyond sports betting) than Christie I ever did. Will this be enough to push Christie II over the SCOTUS "cert-worthy" line? Tune in on Tuesday to find out.


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