N.J. cites states rights in argument for sports betting

A federal law from 1992 prohibiting states from authorizing gambling on sports should be struck down because it violates several constitutional principles, challengers of the law argued in briefs filed Tuesday with the United States Supreme Court.

The challengers, which include the State of New Jersey and the New Jersey Thoroughbred Horsemen’s Association, filed the briefs to support their objections to the 1992 law, the Professional and Amateur Sports Protection Act, in a case that is scheduled to be heard in the Supreme Court’s fall session. The case is being closely watched in the gambling and sports industries because of its potential impact on the legality of sports wagering across the U.S.

Filings from the challengers focused most extensively on the anti-commandeering principle, which holds that Congress cannot compel states to take action to govern or regulate in a specific manner. Both challengers argued that PASPA, as the law is known, violated the anti-commandeering principle because it does not ban sports wagering outright, but rather prohibits states from authorizing the practice on their own.

:: Save up to 55¢/card on PPs with a 5-pack

“Congress could prohibit sports wagering itself, if it wished to do so, but it cannot compel New Jersey to do it in the service of Congress’s objective of forestalling further legalization of sports wagering,” attorneys for the state of New Jersey wrote in the brief.

The state of New Jersey embarked on a path to legalize sports wagering in 2011, when voters passed a referendum repealing the state’s prohibitions on sports gambling. The strategy, supported by Gov. Chris Christie, who was looking for a way to reinvigorate casinos in ailing Atlantic City, took several twists and turns over the next several years as courts struck down the state’s efforts to authorize sports gambling at casinos and racetracks after the efforts where challenged by a phalanx of professional and amateur sports leagues.

The Supreme Court agreed to hear the state’s challenge earlier this year. A decision in the case is expected in the spring of 2018.

New Jersey’s horsemen’s association, which operates Monmouth Park under a lease from the state, has been a plaintiff in the legal challenges, and in its brief filed on Tuesday, the association’s attorneys argued that PASPA violates the Constitution’s 10th amendment, which grants powers to states that are not delegated specifically to the federal government, using a nuanced formulation.

“While Congress has the power to regulate interstate commerce, Congress has never had the power to regulate the state’s regulation of interstate commerce,” the brief stated.

The horsemen also argued that because PASPA granted a limited exemption to a handful of states that had already legalized sports wagering, it created “competitive disadvantages” for New Jersey businesses. The states that were granted a limited exemption included Delaware.

The filing then stated that without being able to offer sports wagering, Monmouth Park was losing “one million dollars every week” and that preventing Monmouth from offering sports betting will “mean not only the death of the Thoroughbred racing industry in New Jersey, but, also, will irreparably damage New Jersey’s equine industry.”

“The NJTHA believes that the only revenue stream that can save Monmouth Park at the present time is revenue from sports betting,” the filing said.