The New Jersey Sports Betting Case Will Get New Life Or Go Back To Square One On Monday

[HacheMan]

The New Jersey Sports Betting Case Will Get New Life Or Go Back To Square One On Monday

Dustin Gouker, June 22, 2017


Thursday was an important day for the future of sports betting in New Jersey and the rest of the United States. But we won’t know what happened until Monday.The US Supreme Court justices met on Thursday to consider a number of cases for a possible appeal. Among them was Christie vs. NCAA et al — better known as the NJ sports betting case.

What SCOTUS did, and will do, on NJ sports betting

SCOTUS held a conference on Thursday. One topic was whether to hear the appeal in the ongoing federal case involving sports betting and the state of New Jersey (represented by Gov. Chris Christie in the name of the case).

New Jersey is arguing that it should be able to allow sports betting within its borders, something a federal law — PASPA — prohibits (at least according to court rulings so far.) The state is arguing that PASPA is unconstitutional and violates the Tenth Amendment (states’ rights). The plaintiffs — the NCAA, NFL, MLB, NBA and NHL — have fought New Jersey in court to stop it from legalizing sports betting.
The result of the case will not be known until Monday morning. That’s when SCOTUS will announce which petitions it is granting and which it is denying. New Jersey will hope to be in the former category.

If that happens, the case lives on. More briefs will be filed, and eventually the case will have oral arguments in front of the court. If the majority of the court finds with New Jersey, in the scenario, there could be legal sports betting in the state next year.
If New Jersey’s petition isn’t granted…

…It’s back to the drawing board

A denial would mean the current case is over. That means no New Jersey sports betting any time soon.
So far, New Jersey has lost in every federal court in which the case has been heard, over the course of two different laws that the state passed on sports betting. The US Solicitor General — asked to weigh in on the case by SCOTUS — recommended that the court pass on hearing the appeal.
That was a blow to New Jersey’s hopes in the case. Despite that, SCOTUS even asking for the opinion of the SG improves the odds of a petition being granted.

If the appeal doesn’t happen, New Jersey has options:

• Try for a third time to do a partial repeal of its law on sports betting. That’s something that obviously hasn’t worked to date. Such a bill was already introduced at the end of 2016.
• The so-called “nuclear option,” in which the state does a full repeal of its sports betting law. That would mean almost anyone in the state — not just casinos and racetracks — could offer sports betting.
• Lobby Congress for a change to federal law.
• Pass a law — or use existing law — to offer sports betting-esque products under the guise of “daily fantasy sports.” (This is already underway.)
• Do nothing at all.

If New Jersey happens to win…

Let’s start here: If the petition is granted on Monday, things still have to break well for New Jersey to win.
But if it does come out victorious, it would instantly change the landscape for US sports betting.
More states would immediately try to pass laws legalizing sports betting. A decision for NJ likely creates momentum for Congress to revisit gambling laws like PASPA, the Wire Act and the UIGEA.

How likely is that scenario? Perhaps not very likely. But first things first: It needs SCOTUS to grant the appeal. If that doesn’t happen, it’s back to square one on sports betting for the time being.

 

[HacheMan]

Seven Reasons Why The New Jersey Sports Betting Case May Get Its Day In The Supreme Court

Daniel Wallach, June 23, 2017


This Monday marks a critical pivot point in the effort to legalize sports betting in the United States.That morning, the US Supreme Court will release its weekly “Orders List” in which it formally announces which petitions for writ of certiorari will receive a full review on the merits during the court’s 2017 term (slated to begin in October). One of the cases expected to appear on Monday’s Order List (the final one of this year’s 2016 term) is Christie, et al. v. National Collegiate Athletic Ass’n, et al., Case Nos. 16-476, commonly referred as the New Jersey sports betting case or “Christie II.”

This case, along with a companion case filed by the New Jersey Thoroughbred Horsemen’s Association, are among the group of cases that the nine justices considered at the conference on June 22. It is expected that the court will announce on Monday whether Christie II makes the cut.
New Jersey faces long odds in receiving the proverbial ‘golden ticket’:

• First, the Supreme Court historically grants fewer than two percent (two percent) of all petitions seeking certiorari review.
• Additionally, New Jersey’s chances for Supreme Court review are hampered by the absence of any “circuit split” on the issue of PASPA’s constitutionality. (PASPA is the federal that prevents single-game wagering outside of Nevada.) Most cases accepted for review by the Supreme Court involve conflicting decisions among the lower federal courts on a particular legal issue. Since the Christie line of cases are only the federal court decisions addressing the constitutionality of PASPA, the all-important “circuit split” is lacking here.
• A more formidable obstacle may be the US Solicitor General’s amicus curiae brief — filed in May — recommending that the Supreme Court not grant certiorari review in the Christie II case. The Solicitor General’s recommendation following carries significant weight with the Supreme Court, and, historically, is followed around 80 percent of the time. The Solicitor General’s adverse recommendation thus makes it far less likely — at least statistically — that that the Supreme Court will review the Christie II case on the merits, dealing yet another setback to proponents of expanded legal sports betting.

Despite the long odds, I believe that there is an excellent chance that the Supreme Court will grant certiorari in Christie II. I would peg New Jersey’s chances at around 50 percent, and, no, I will not take anybody’s action on that proposition.
But here are seven reasons why Monday may be New Jersey’s lucky day:

1. The Supreme Court is already interested in the case

By calling for the views of the Solicitor General (CVSG), the Supreme Court has already indicated a strong interest in the case.
Under longstanding Supreme Court practice, it takes a minimum of four justices to request a CVSG — the same number of votes needed to grant certiorari (known as the so-called “Rule of Four”).
Remember, the Court took this action when it had only eight justices on the Court. Now there is a ninth justice. Those same four (or more) justices who voted for the CVSG — plus the recent addition of Neil Gorsuch — could tip the scales in New Jersey’s favor.

2. Additional cert grants are needed to keep pace with last year

During the current term, the Supreme Court has granted certiorari in only 19 cases. By contrast, at the close of last year’s term in June, the court had already granted certiorari in 29 cases, or roughly 50 percent more than the current year’s pace. (I recommend checking out Kedar Bhatia’s “Interim Stat Pack” over at SCOTUSBlog for graphical depiction of the pace of cert grants for both the 2015 and 2016 Terms).
Something’s got to give here. With only one more week to go in the court’s current term — and, more importantly, only one more opportunity to add merits cases to next year’s term, the justices have considerable ground to make up if they wish to keep pace with last year.
I broached this theory with SCOTUSBlog’s Amy Howe, who told me that “the justices are often looking to fill their docket for the fall at this time of the year. . . . And so I would agree that the Court is more likely to grant cert at the end of June, before the summer recess, to make that happen.”
In other words, we should expect a sharp spike in cert grants during the last week of the Court’s term. And New Jersey may benefit from the timing of the court’s consideration.

3. The New Jersey case checks many of the right boxes

While the justices will have a sizable number of cert petitions to sort through in the last week of the court’s term, the Christie II case should have a better chance than most.
It is the perfect vehicle for the conservative wing of the Supreme Court (which now includes Justice Gorsuch) to address the proper balance between federal and state sovereignty (the so-called “federalism” principle).
The key question at play in Christie II is whether a federal statute (PASPA) that prohibits a modification or “repeal” of state law prohibitions on private conduct (i.e., sports betting) impermissibly commandeers the regulatory power of the States, in contravention of the Tenth Amendment of the US Constitution.

The Third Circuit’s 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.
New Jersey’s commandeering argument in Christie II found traction with three of the 12 judges on the Third Circuit’s en banc panel, with Judge Thomas Vanaskie concluding in his dissent that PASPA violates principles of federalism by “effectively command[ing] the States to maintain and enforce existing gambling prohibitions” and “dictating the manner in which States must enforce a federal law.”
While this argument failed to persuade a majority of the Third Circuit judges, it could find greater success in the more conservative-leaning Supreme Court.

4. Don’t forget about ‘equal sovereignty’

But it is the “equal sovereignty” argument, addressed in the first lawsuit between New Jersey and the professional sports leagues (the so-called “Christie I” case) and also raised in the Christie II petitions, that ultimately may prove to be the perfect vehicle for the Court.
New Jersey’s equal sovereignty argument was grounded upon the notion that PASPA does not treat all states equally; instead, it affords uniquely favorable treatment to Nevada and three other states (Delaware, Montana and Oregon) by allowing those four “grandfathered” states to offer sports betting to varying degrees, while banning the other 46 states (including New Jersey) from offering any form of sports gambling. (There is evidence even more states were grandfathered in, as well.)

In Christie I, the Third Circuit held that the principle of equal sovereignty does not apply to legislation (such as PASPA) enacted pursuant to the Commerce Clause of the US Constitution. The Third Circuit distinguished Shelby County v. Holder, 133 U.S. 2612 (2013), a voting rights act case that was decided on the basis of equal sovereignty, on the ground that PASPA involves the regulation of commerce, as opposed to elections. But nothing in Shelby County or any of the Supreme Court’s prior decisions appears to suggest that the principle of equal sovereignty is limited to voting rights cases.

While the Supreme Court declined to review Christie I, despite the apparent inconsistency with Shelby County, it may wish to address the equal sovereignty principle this time around. If that were to occur, PASPA might not survive scrutiny under the Shelby County test, which looks to whether the statute’s disparate geographic coverage is “sufficiently related to the problem that it targets.”
This is where PASPA is especially vulnerable, as the reason for the disparate treatment of Nevada, Oregon, Montana and Delaware (the four “grandfathered” states) was to protect the “strong reliance interests” of those states that had legalized sports betting prior to the enactment of PASPA.
But such carveouts do not appear to be “sufficiently related” to the targeted goals of PASPA, which are to stop the spread of legal sports betting and to protect the integrity of professional and amateur sports.

5. The Supreme Court’s prior skepticism over PASPA

Although the Supreme Court has not previously ruled on the constitutionality of PASPA, it did throw some shade PASPA’s way in two previous cases. In her dissenting opinion in Shelby County, Justice Ruth Bader Ginsburg specifically referred to PASPA as an example of a federal statute that treats states differently, observing that such statutes are “hardly novelties,” but pointedly asking whether such statutes “remain safe given the Court’s expansion of equal sovereignty’s sway.”

Fifteen years earlier, in Greater New Orleans Broadcasting Ass’n, Inc. v. United States, 527 U.S. 173 (1999), the Supreme Court briefly addressed PASPA in the context of a constitutional challenge to a federal law prohibiting broadcast advertisements of private casino gambling. Although not ruling on the constitutionality of PASPA, the court had some interesting things to say about PASPA and the federal government’s role in regulating gambling.

Writing for a unanimous court, Justice John Paul Stevens observed that PASPA “includes a variety of exemptions, some with obscured congressional purposes.” Id. at 179 (emphasis added). Justice Stevens also recognized that on issues of gambling policy, Congress should generally defer to the states, writing that:

[n]o one seriously doubts that the Federal Government may assert a legitimate and substantial interest in alleviating the societal ills [associated with gambling], or in assisting like-minded States to do the same. . . . But in the judgment of both the Congress and many state legislatures, the social costs that support the suppression of gambling are offset, and sometimes outweighed, by countervailing policy considerations, primarily in the form of economic benefits. Despite its awareness of the potential social costs, Congress has not only sanctioned casino gambling for Indian tribes through tribal-state compacts, but has enacted other statutes that reflect approval of state legislation that authorizes a host of public and private gambling activities. . . . That Congress has generally exempted state-run lotteries and casinos from federal gambling legislation reflects a decision to defer to, and even promote, differing gambling policies in different States.​

Id. at 186-87 (emphasis added)

6. The SG’s recommendation may be given less weight here

The persuasive effect of the Solicitor General’s amicus brief — recommending against a ‘cert’ grant — is diminished in my view given its prior adversarial role in the sports betting controversy.

Contrary to popular brief, the Supreme Court does not just simply ‘rubber-stamp’ the Solicitor General’s recommendation. While the Court historically follows the SG’s recommendation after a CVSG roughly 80 percent of the time (and close to 100 percent over the past two years), it is not an automatic.

There are numerous instances where the Supreme Court has not followed the SG’s recommendation, and, indeed, the court is much more likely to grant certiorari when the SG has recommended a denial (which is the posture of this case) than it is to deny certiorari when the SG has urged the Court to take the case. And the more recent trend has been for the court to use the SG’s brief as “an information gathering tool” rather than as tantamount to the deciding vote.

This is especially so here, where the US government is not exactly a stranger to the litigation. If you recall, the Department of Justice (which is part of the same branch of the federal government as the Office of the Solicitor General) was an “intervenor” in the Christie I case, and filed an amicus brief with the Third Circuit in Christie II and even participated in the Christie II oral argument (both in front of the original three-judge panel and, again, on en banc rehearing).

The Solicitor General also filed an amicus brief with the Supreme Court in the Christie I case (with some famous language, as discussed below) recommending against a cert grant.

In other words, this case is not like other CVSG’s, where the SG’s office is ‘distant’ from the litigation and is being asked to weigh on the constitutionality of a federal law in a case involving other parties. In this case, the SG is acting just like a party, advancing the views of the DOJ, which has taken a firm position against New Jersey in both Christie cases.
Therefore, the deference ordinarily accorded to the SG by the Supreme Court may be reduced somewhat here, and the court could very well just be looking to the SG’s brief as simply an information-gathering tool.

7. The SG’s ‘Flip-Flop’ in Christie II

The Solicitor General’s amicus brief may invite greater scrutiny than usual — and perhaps even healthy skepticism — by the court given the SG’s apparent about-face on the issue of partial repeals.
In the Solicitor General’s response to New Jersey’s petition for writ of certiorari in Christie I, the SG represented that “PASPA does not even obligate New Jersey to leave in place state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPA’s enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part.” (italics added).

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 in 2014, which is now under attack.
Now fast forward three years later to Christie II, and the Solicitor General has essentially retreated from that earlier statement. In his amicus brief, the Solicitor General now says “in context,” what the federal government “meant” is that

States are “free to repeal those prohibitions . . . in part” only to the extent the state’s repeal “is not a de facto authorization.”
The New Jersey parties pounced on this flip-flop in their recently-filed supplemental brief, characterizing the SG’s latest position as “a flat-out recantation of what the Solicitor General told [the Supreme] Court just three years ago in Christie I,” and disparaging it as “new spin” which is “irreconcilable” with the federal government’s position before the Third Circuit in Christie II.

So you can begin to see that, maybe, the Solicitor General’s recommendation is not all that it’s cracked up to be. Not only is it somewhat diluted by the SG’s prior adversarial role in the controversy, but the SG’s stunning flip-flip on a crucial issue in the case may actually undermine the office’s credibility with the court.

Indeed, courts absolutely hate it when litigants change their positions to suit the exigencies of the moment. It is for this reason that the doctrine of judicial estoppel exists — to prevent parties from advancing a position in litigation that is inconsistent with one previously asserted in another judicial proceeding. And that is exactly what has happened here.

 

[HacheMan]

Will New Jersey Go ‘Nuclear’ On Sports Betting Law? NJ State Senator Eyes Full Repeal Of Prohibition

Dustin Gouker, June 23, 2017


New Jersey state Sen. Ray Lesniak said he isn’t waiting to find out what the US Supreme Court will do in the ongoing NJ sports betting case. He’s already looking at a new path toward having sports betting in the Garden State.A full repeal on sports betting in NJ?

This week, the lawmaker and gubernatorial candidate announced his intention to introduce new legislation to allow sports betting within the state’s borders. (The bill does not yet appear on the NJ legislative website.) The legislation would aim to repeal the prohibition on sports betting in its entirety in New Jersey.
New Jersey has attempted on two occasions to partially repeal its own laws in regards to sports betting, allowing the activity in casinos and racetracks. Federal courts to date have ruled it cannot do this as violative of PASPA. That’s the federal law that prohibits single-game wagering outside of Nevada sports betting.
The Supreme Court is expected to announce on Monday whether it will grant an appeal, something that is perhaps not likely but possible.
Lesniak’s bill would effectively allow almost anyone to offer sports betting in New Jersey outside of gaming regulations. Such a move would more likely be to force action on the federal level than to create what amounts to sportsbooks all over the state into perpetuity.
The bill, apparently, would offer some regulation, per Lesniak, just not under the state’s Division of Gaming Enforcement.

Lesniak’s sports betting gambit

The senator made the announcement about his legislation on Facebook; here is some of what he said:

I decided not to wait for the US Supreme Court to decide if my legislation repealing NJ’s laws against sports betting at casinos and racetracks violates federal law (PASPA) and will introduce tomorrow legislation to repeal all NJ laws against sports betting.
My sports betting ally, Assemblyman Caputo, and I will begin a campaign to get legal sports betting for New Jersey in time for the start of the professional football season or at least for the Super Bowl.
The new industry, which will generate thousands of jobs and more than a hundred million tax revenues for the state treasury has already been approved in by the US Court of Appeals in its decision to reject my legislation because it was limited to casinos and racetracks.
Sports betting will be regulated and overseen by our Office of Consumer Affairs, the Department of Treasury, the federal Bank Secrecy Act, the IRS and local zoning laws applicable to all business activity.
​

More from GamblingCompliance (paywall) with Lesniak:

“This is the last card I have left, and I decided to play it,” said Lesniak, a Democrat who will retire from the New Jersey state Senate at the end of the year.
“I want to send an indirect message to the Supreme Court, and I want to send a direct message to the NFL (National Football League).”

​

Is there a will for a full repeal?

There are myriad reasons why lawmakers in New Jersey may not do this, some of which I touched upon the last time the ‘nuclear’ option came up:

• Even if the bill limits how and where sports betting takes place, it sets up something far less than the regulated market that exists in Nevada, the UK and other jurisdictions in Europe and around the world. It’s not clear how many lawmakers would actually get behind this sort of psuedo-regulation of sports gaming in the state.
• New Jersey residents expressed their distaste for an expansion of gaming in the state when it rejected casinos in North Jersey via a referendum in 2016. This bill would set up an even bigger expansion of gaming in the state.
• Atlantic City is in the midst of a rebound. Does anyone want to upset that trend? The law would mean AC casinos could offer sports betting. But NJ residents could also bet on sports anywhere else the law allows. The full economic impact wouldn’t go to casinos.

And there’s one other big problem.

Even if the new sports betting law passes…

New Jersey is almost certainly going back to court if the bill becomes law.
New Jersey may have a much better legal case with the nuclear option than it did with the previous partial repeals. But make no mistake about it: the NFL, NBA et al — the plaintiffs in the current NJ sports betting case — will find a way to challenge this, as well.
If New Jersey really wants to force the leagues’ hand and force Congressional action on PASPA, it would just do the full repeal, and nothing else, and watch everyone squirm.
That, of course, is even less likely to happen politically. But it would undoubtedly create quick momentum for a repeal of PASPA.