Theron Anderson, Associate Member, University of Cincinnati Law Review
This is the first article in a two-part discussion on sports betting. Click here to read Ohio’s response.
On May 14, 2018, the Supreme Court reached a decision invalidating an Act that prevented states from opening the doors to sports betting within their jurisdictions. Through this decision, the Court drew a visible line in the sand showing where they stand in the battle of federal and state powers in the war of federalism. The line was created through the stick of anticommandeering—a doctrine used to protect the states from the encroachment of the federal government on their powers. Part II discusses the case of Murphy v. NCAA, along with how it added another element to this protective doctrine. Part III will illustrate the reactions, and validity of those reactions to the case, as well as the possible congressional limitations that could be placed on this newfound state freedom.
In a reaction to a national push for the legalization of sports gambling in the late 20thcentury, Congress turned to legislation, and the Professional and Amateur Sports Protection Act (“PASPA”) was born. Generally, this legislation made it unlawful for a State to “authorize” sports gambling. When voicing support for the Act, legislators pointed to the need to protect the youth from gambling as well as the “integrity of sports.” Despite barring the state authorization of gambling, Congress featured an exception in the Act that allowed active sports gambling, which took place in Nevada, Oregon, Montana, and Delaware, to continue. These provisions were referred to as “grandfather” provisions. Sports gambling was not made a federal crime in order to keep the Act consistent with the active gambling states, but the remedies of civil actions were available to prevent the spread to other states. In support of New Jersey’s state congressional discussions, the Act also featured a provision that granted New Jersey the option of legalizing sports gambling in Atlantic City. A deadline of one year from the Act’s effective date was placed on the option, which New Jersey failed to exercise.
After missing the deadline to legalize gambling in Atlantic City, New Jersey voters decided that gambling was in the best interest of the State’s economy. After New Jersey approved an amendment to the State Constitution allowing the legislature to legalize gambling, major professional sports leagues and the National Collegiate Athletic Association (“NCAA”) quickly reacted and brought an action in federal court against the agents of the State. The provision at issue in PASPA made it “unlawful” to “authorize by law or compact . . . a lottery, sweepstakes, or other betting, gambling or wagering schemes based . . . on” sporting events. After numerous years of hearings by the lower federal courts, the Supreme Court granted review of the case to rule on the constitutional issues.
When assessing the facts of the case, the Justices of the Court questioned whether the anticommandeering doctrine was violated. The doctrine was created in the cases of New York v. United States and Printz v. United States. The anticommandeering doctrine “withhold[s] from Congress the power to issue orders directly to the State.” The doctrine was derived from the principle that “both the Federal Government and the States wield sovereign powers” and work together cohesively as “dual sovereigns.”
The Court reached the conclusion that the PASPA provision at issue violated the anticommandeering doctrine due to the provision “dictat[ing] what a state legislature may or may not do.” This case presented a new anticommandeering issue because the Act in question was not directing the states to take certain actions, as found in New York and Printz, but rather directed the states to refrain from certain conduct.
Those supporting PASPA argued that this should distinguish the case at bar and move it outside the reach of the anticommandeering doctrine. The Court disagreed and ruled that the doctrine applies to affirmative actions commanded by Congress as well as imposed prohibitions. The litigation culminated in the Court ruling that the provision concerning the state authorization of sports gambling was in violation of the anticommandeering doctrine, and therefore invalid. The Court went on to invalidate the entirety of PASPA due to it being “evident that [Congress] would not have enacted those provisions which are within its power, independently of [those] which are not.”
What this Court ruling crafted was a key to the federal government’s shackles on the states, granting states the freedom to capitalize on the surge of betting revenue generated throughout the country. After the gavel struck the block, New Jersey and Delaware prepared to pass new legislation, and numerous other states commenced conversations concerning the issue.
The reactions to this ruling varied. A large portion of states have jumped at the opportunity to raise revenue, while sports leagues have made moves to maintain control over their sport. In recent moves, certain sports leagues have adopted the old “if you can’t beat them…” mantra by attempting to secure a piece of the sports betting market for themselves. The National Basketball Association (“NBA”) has bid to secure a 1% cut, called an “integrity fee,” of every bet made on a game organized by the League. The NBA supported their request by claiming that “as intellectual property creators, [their] games serve as the foundation for legalized sports betting, providing casinos the ability to earn revenue off [their] games, while [they] bear all of the risk that accompanies sports betting and will incur additional expenses to expand [their] existing compliance and enforcement programs.” States have taken opposition to this stance, responding that they can coordinate better between each other, which will protect the amount of revenue flowing directly to the states, and not exploit states that do not have a professional sports team contributing to their economies.
The National Football League (“NFL”) has also attempted to enter the market by “requesting that the states grant them exclusive control of game and player data, which state licensed sportsbooks would then be required to purchase from the leagues for its operations.” Along with the request of the NBA, states have been quick to push back.
Both sides of the argument have merit. The various professional leagues offer a product; therefore, it is not a far reach for those leagues to ask for a slice in the pie created by that product. Yet sports betting benefits these leagues in a way that might not show up on its own row in the financial statements. Attendance and viewership of sporting events have been consistently decreasing through the years. An argument for the pro-sports betting camp follows the logic that when persons bet on a game, they will watch the game. Therefore, when these states open up an arena for betting participation, the bottom line of the leagues are, in theory, positively affected.
Does this mean that states can occupy the sports betting space and do as they please? Absolutely not. The Murphy Court outlined the avenues that Congress has to limit the freedom of the states’ decision making. Looking into the future, Congress could enact federal regulations successfully by “(1) incentiviz[ing] states to adopt federal policies, or (2) prohibit[ing] certain conduct directly.” Congress could also create a “baseline rule” and require the states to “either adopt that rule or another of their own choosing.”
If Congress were to travel the avenue of regulating the private actors directly, a question arises of how the legislation would evade the grasp of the anticommandeering doctrine. It is a fact that multiple states have legalized sports gambling. Congress embedded in PASPA an exception for these states. If Congress were to push through an Act that was pointed towards private actors with the grandfather provisions for those states, would it successfully leave the anticommandeering doctrine undisturbed? One could argue that, in effect, it still forces states to prohibit sports gambling. Would the Court push the boundaries of the doctrine that far? To secure the sovereignty of the States, the doctrine should be extended when the federal government attempts to chain the States by influencing the people that operate within the State’s jurisdiction. When grey areas enter an argument regarding federalism, the Court should turn to the text of the Constitution and limit the Federal Government to the powers that are explicitly written. The Tenth Amendment has given the rest to the States, and that fact should guide our decisions.
Abiding by the Constitution of the United States, the Court came to the right decision. If the people of the states agree to take certain actions within their domain, the Federal Government should not be able to subdue their actions when it is not within their prescribed powers. In the future, the Court should also be vigilant of Congress and the lobbying professional leagues to ensure the federalist balance is not upset.
Murphy v. NCAA, 138 S. Ct. 1461 (2018).
Id. at 1470.
Id. at 1468-69.
Id. at 1470-71.
Id. at 1471.
Professional and Amateur Sports Protection Act (PASPA) of 1992, Pub. L. No. 102-559, 28 U. S. C. §3702(1) (1992), invalidated by Murphy, 138 S. Ct. at 1461.
Murphy, 138 S. Ct. at 1473.
New York v. United States, 505 U.S. 144 (1992).
Printz v. United States, 521 U.S. 898 (1997).
Murphy, 138 S. Ct. at 1475.
Id. at 1477.
Id. at 1481.
Id. at 1482.
John Wolohan, The potential impact of the Murphy v. NCAA decision on sports betting in the United States, LawInSport (May 31, 2018), https://www.lawinsport.com/content/article/item/the-potential-impact-of-the-murphy-v-ncaa-decision-on-sports-betting-in-the-united-states.
Cory Lapin, The Potentially Far-Reaching Implications of Murphy v. NCAA Outside of Sports Betting, Defense Litigation Insider (May 30, 2018), https://www.defenselitigationinsider.com/2018/05/30/the-potentially-far-reaching-implications-of-murphy-v-ncaa-outside-of-sports-betting/ (citing Murphy, 2018 U.S. 2805 at *31-34).
Sam Kamin, Murphy v. NCAA: It’s about much more than gambling on sports, The Hill (May 15, 2018), https://www. Thehill.com/opinion/judiciary/387653-murphy-v-ncaa-its-about-much-more-than-gambilng-on-sports.