Proponents and opponents of the state of New Jersey’s desire to offer legal sports betting squared off in a Philadelphia court on Wednesday. New Jersey’s advocates were appealing the US District Court injunction preventing their sports betting plans that had been sought and won in February by the National Football League, three other pro sports leagues, the NCAA and the US Department of Justice. New Jersey went to Philadelphia to ask the Third Circuit Court of Appeals to overturn the injunction and consider their argument that the federal PASPA sports betting prohibition was unconstitutional.
The three-judge Third Circuit panel was made up of D. Michael Fisher, Thomas Vanaskie and Julio Fuentes. The latter judge was also on the 2009 ‘Markell’ suit, in which Delaware unsuccessfully attempted to expand its PASPA-approved parlay sports betting operations into a more lucrative single-game wagering system.
Attendance at the hearing was sufficiently large that a second room was equipped with a live video feed to handle the overflow. Thanks to furious thumb action from iMEGA’s Joe Brennan Jr. (@joebrennanjr), Ifrah Law associate Griffan Finan (@G_Finan) and Duane Morris LLP attorney Christopher Soriano (@CLSoriano), Twitter was given a virtual front row seat.
AND WE’RE OFF…
Kicking things off for New Jersey was star attorney Theodore Olson (pictured gesturing above right), who immediately called into question the leagues’ claim to standing in the case. Asked by Fuentes whether the alleged damage to the ‘perception’ of league games didn’t afford the leagues standing, Olson rejected the notion that perception constituted a concrete, impending injury. When Fuentes cited the fixed 1919 World Series as an example of such an injury, Olson countered that it and other scandals were the result of third party activity, and standing can’t be based on the conduct of third parties.
Olson also challenged the notion that PASPA had granted the leagues the right to claim standing in cases such as this, saying standing can’t be created by statute without turning the leagues into “a private attorney general.” Fuentes pointed out that the DOJ was also a party to the suit, but Olson countered that the DOJ had only joined the suit well after the leagues had filed their complaint.
Switching to the issue of whether PASPA violates the Constitution’s edicts against commandeering, the judges reminded Olson that PASPA didn’t require states to do anything but maintain the status quo. Olson said the effect was the same, to take control out of the hands of state legislatures. (Michael Griffinger, the attorney representing the state’s top Democratic legislators, compared this to the stone tablets Moses brought down from the mountaintop: some of the 10 rules are do’s and some are don’ts, but they all amount to commandeering.)
SEPARATE BUT INEQUAL
When things got down to the equal sovereignty argument, Judge Vanaskie made the interesting suggestion that it might make more sense to strike the exemptions PASPA granted to Nevada, Delaware, Montana and Oregon than to open up new states to sports betting. (That sound you heard was Nevada sportsbook operators swallowing hard.)
Olson brought up this week’s Supreme Court decision striking down the part of the federal Voting Rights Act that compelled states to submit potential voting law changes to the DOJ for approval. In Justice Ginsburg’s dissenting opinion in Shelby County v. Holder, she specifically mentioned PASPA as an example of a federal statute that applied the law differently to individual states, wondering whether “such provisions remain safe given the Court’s expansion of equal sovereignty’s sway.”
Ron Riccio, the attorney representing the New Jersey Thoroughbred Horsemen’s Association, also brought up the voting rights case in discussing Nevada’s preferential treatment under PASPA. Riccio argued that the Supremes had ruled that Congress needed to establish more than a rational basis argument to violate state sovereignty. Discrimination has to be related to purpose, and Congress’ stated rationale behind PASPA – to curb corruption in sports – didn’t jibe with allowing single-game sports betting in Nevada and nowhere else.
THE CASE FOR THE DEFENSE
Paul Fishman, representing the DOJ, said the voting rights ruling was immaterial to sports betting due to voting falling under the 15th Amendment, whereas PASPA falls under the commerce clause. Challenged by the panel as to whether PASPA’s edicts amounted to preemption, Fishman said he wasn’t sure (prompting a ‘What?’ from Brennan). Fishman also defended PASPA’s grandfathered states, saying PASPA’s intent was to stop the spread of legal sports betting without negatively affecting states that had already established a financial dependence on such reprehensible activity.
Paul Clement, representing the NFL, repeated arguments that the leagues had standing and that PASPA was in no way commandeering. In response to Judge Fisher’s question as to why, if sports betting was such a stain on the human condition, had Congress not passed more legislation restricting it, Clement cited the 1961 Wire Act. Asked how New Jersey’s law violated the Wire Act, Clement admitted it didn’t, which Fisher pointed out had undercut Clement’s argument somewhat. Clement also brought up the notion that the easier PASPA fix would be to strike the exemptions granted to Nevada and the other three states. (Again, Nevada swallowing hard.)
The Third Circuit Court has taken the competing parties’ arguments “under advisement” but offered no timetable on when a ruling might be forthcoming. Most court observers don’t expect a decision for several months, which leaves open the possibility of the NFL’s opening weekend being overshadowed by a big legal ruling. However the Court rules, the losing party is expected to seek a Supreme Court hearing, meaning this show is far from over.