Breaking the Ban: Sports Gambling, Anti-Commandeering, and Lots and Lots of Money.

• Author: Brand, George R.

Murphy v. National Collegiate Athletic Association, 138 S. Ct. 1461 (2018).

1. INTRODUCTION

   While Las Vegas is now commonly considered the pinnacle of modern American gambling, this has not always been the case. (1) In the late 1970s, Atlantic City, New Jersey, set out to challenge Las Vegas' standing as America's top gambling destination. (2) The first Atlantic City casino opened in 1978, (3) and between 1978 and 1985 the city's casinos generated an average annual revenue growth rate of 55 percent. (4) By contrast, Las Vegas' first seven years of legalized gambling from 1970 to 1977 only saw an average annual growth rate of 15.6 percent among its casinos. (5) In 1985, Atlantic City's total gambling revenue was almost fifty percent greater than that of the Las Vegas strip's. (6) However, modern-day Atlantic City does not hold a candle to Las Vegas when it comes to gambling revenues. In 2017, the Las Vegas strip brought in almost five times the gambling revenue of Atlantic City. (7)

   While there are myriad factors impacting historical trends in gambling revenues across America, this Note will focus specifically on the legal treatment of sports gambling. In 1992, Congress passed the Professional and Amateur Sports Protection Act ("PASPA"), (8) which banned sports gambling nationwide, with a few exceptions such as Las Vegas. (9) Under PASPA, all states had a one-year grace period after the statute went into effect where they could legalize sports gambling within their state and escape PASPA's pending ban. (10) Although New Jersey failed to take advantage of this loophole during the grace period, state legislators attempted to legalize sports gambling twenty years later when voters approved an amendment to the state constitution in 2012. (11) After a three-year legal battle with the National Collegiate Athletic Association ("NCAA") and the National Football League, National Basketball Association, National Hockey League, and Major League Baseball ("the Leagues"), that progressed all the way to the Supreme Court of the United States, New Jersey ultimately lost its initial attempt to legalize sports gambling. (12)

   After the failed attempt to legalize sports betting via constitutional amendment, New Jersey tried a different route in 2014 when it repealed provisions of state law that had previously prohibited sports gambling ("2014 Act"). (13) The opponents from the prior litigation again filed a federal suit challenging the constitutionality of the 2014 Act. (14) After losing at the state and circuit level, New Jersey ultimately prevailed when, in 2018, the Supreme Court determined in Murphy v. National Collegiate Athletic Association that PASPA's ban of sports gambling was unconstitutional because it violated the well-established anti-commandeering doctrine. (15)

   This decision marked only the third time the Court had struck down a state law for violating the anti-commandeering doctrine. (16) While we are still very much in the wake of the Murphy ruling, its constitutional implications for other clashes between state and federal law are yet to be determined. Within a few months after the Murphy decision, four states joined New Jersey in passing legislation to fully legalize sports gambling, and many other states have since passed limited legalization of certain types of sports gambling. (17) More than a dozen other states have legislation pending to legalize sports gambling in whole or in part. (18) As revenues from legalized sports gambling continue to rise, stakeholders are well entrenched in quibbles over dividing the earnings appropriately. The Murphy ruling will undoubtedly go down as a watershed moment in the narrative of American sports gambling, and its implications for federalism, state power, and the Constitution loom just as large.

2. FACTS AND HOLDING

   On October 16, 2014, the New Jersey Senate repealed portions of state law prohibiting betting on professional, collegiate, or amateur sporting events in Atlantic City or at horseracing tracks throughout the state. (19) The 2014 Act only repealed gambling restrictions for people twenty-one or older and qualified that the sports activity to which the act applied "shall not include a collegiate sport contest or collegiate athletic event that takes place in New Jersey or ... in which any New Jersey college team participates regardless of where the event takes place." Casinos and individuals in Atlantic City or at horseracing tracks in New Jersey were allowed to facilitate and participate in sports betting as long as the betting event took place outside of New Jersey and did not involve the participation of a New Jersey collegiate team. (20)

   This 2014 Act is the impetus behind the instant case. In response to the 2014 Act, the NCAA and the Leagues collectively filed suit against New Jersey governor Chris Christie in federal court, seeking to invalidate the 2014 Act. (21) During the four years between the initial lawsuit and the issuance of the opinion at hand, Phil Murphy replaced Chris Christie as the governor of New Jersey. (22) Although the party's name changed over time, the instant case is an appeal from the original 2014 suit filed against then-governor Chris Christie in his elected capacity. (23)

   The Leagues alleged the 2014 Act conflicted with PASPA which, for over twenty years, had outlawed sports betting almost everywhere in America except for a few specialized locations. (24) The relevant portion of PASPA made it unlawful for state governments to "authorize... betting, gambling, or wagering scheme[s] based... on one or more competitive games in which amateur or professional athletes participate." (25) The Leagues focused on the word "authorize" as it appeared in PASPA. (26) Citing Black's Law Dictionary, they alleged the word "permit" should fall under the umbrella of the word "authorize" as used in PASPA. (27) The logical flow, according to the Leagues, was that the 2014 Act violated PASPA because it "permitted" sports gambling to take place in New Jersey. (28)

   New Jersey countered and urged the Court to read an affirmative act requirement into the word "authorize" as used in PASPA. (29) Because the 2014 Act repealed a state statute, New Jersey argued it lacked the affirmative act required to violate PASPA's ban. Also, referencing Black's Law Dictionary, New Jersey asked the court to define "authorize" as "to empower; to give a right or authority to act; to endow with authority." (30) Lastly, it asked the Court to interpret the 2014 Act as a piece of legislation that "empowers a defined group of entities, and... endows them with the authority to conduct sports gambling operations." (31)

   In addition to disagreeing over the interpretation of the word "authorize," the litigants disagreed over the extent to which PASPA and the 2014 Act conflicted with the anti-commandeering doctrine. (32) New Jersey argued that the 2014 Act should be upheld "in order to avoid any anti-commandeering problem that would arise if [PASPA] were construed to require States to maintain their laws prohibiting sports gambling." Conversely, the Leagues saw no anti-commandeering problems arising from PASPA's restrictions against sports gambling legalization. (33)

   The Court distilled the anti-commandeering doctrine as "the decision to withhold from Congress the power to issue orders directly to the States." (34) Under the dual sovereignty system, both the federal government and individual state governments hold separate powers over specified legal jurisdictions. (35) The anti-commandeering doctrine typifies this central tenet of dual-sovereignty: neither the federal government nor an individual state government can attempt to commandeer the other by enacting or enforcing legislation that encroaches beyond each entity's designated realm of control. (36) Effectively, the doctrine prevents either a state or federal government from explicitly commanding the other to act in a specific way. (37)

   The trial court agreed with the petitioners and invalidated the 2014 Act because it was preempted by PASPA. (38) Governor Christie, who held office until January 2018, appealed the trial court's ruling, and a panel of judges for the U.S. Court of Appeals for the Third Circuit affirmed the trial court's decision in a two to one vote. (39) Judge Julio M. Fuentes wrote a dissenting opinion in which he argued the 2014 Act's partial repeal of laws banning sports betting in New Jersey did not amount to an "authorization by law" sufficient enough to run afoul of PASPA's comprehensive ban. (40)

   The panel ruling was later vacated upon approval of New Jersey's petition for a 0irmed the trial court with a nine to three vote and held "the 2014 Law violates PASPA because it authorized by law sports gambling." (42) The Third Circuit further held that PASPA did not violate the anti-commandeering doctrine because the law "includes no coercive direction by the federal government" that would command or require states to take any affirmative steps. (43) Yet again, Judge Fuentes wrote a dissenting opinion, this time joined by Judge Felipe Restrepo, which refuted the assertion that the 2014 Act met the "authorizing by law" requirement of PASPA. (44) In essence, the dissent argued that repealing a prior law was not tantamount to a wholehearted "authorization" of sports betting in New Jersey. Judge Thomas I. Vanaskie wrote a second dissenting opinion in which he argued PASPA's core provision that states "maintain an anti-sports wagering scheme" was, in and of itself, a violation of the anti-commandeering doctrine. (45)

   The Court granted certiorari and, in a six to three decision, ruled in favor of New Jersey and adopted Judge Vanaskie's dissent. (46) Although the Court agreed with the petitioners' interpretation that the repeal instituted by the 2014 Act constituted an "authorization" of sports betting as articulated in PASPA, it held the entire spirit of PASPA violated the anti-commandeering doctrine. (47)...