"Consistency is all I ask!": Leveling the Playing Field of Online Sports Gambling.

• Author: Carroll, Georgia R.

1. INTRODUCTION 217 II. BACKGROUND 217 A. Commerce Clause Jurisprudence 217 B. PASPA & History of Sports Gambling 219 C. Murphy v. Nat'l Collegiate Athletic Ass'n 220 D. State Adoption of Legislation & Methods 221 1. Legislation Adopted 221 2. Methods 222 3. Congress Action Since 2018 222 4. Commerce Clause 223 III. ANALYSIS 223 A. What is Correct in the Murphy Decision 223 B. What is Incorrect in the Murphy Decision 224 C. What the Future Looks Like 225 1. Commerce Clause 225 2. Sports Gambling 226 D. Confusion About Existing Laws 226 E. Advantages of Federal Sports Gambling Regulation 227 1. Effects on the Economy 228 2. Public Opinion 228 F. Issues With Federal Sports Gambling Regulation 229 1. State Regulation of Casinos 229 IV. RECOMMENDATION 230 A. Stricter Federal Regulation 230 1. Does Any Type of Federal Regulation Have to be as Inclusive as Nevada Laws if the Goal is Standardization? 231 B. Federal Law 231 1. Will a Federal Law be Found to be 232 Unconstitutional Like PASPA? C. Uniform Act 232 1. Why a Uniform Act is the Best Solution 233 V. CONCLUSION 234 I. INTRODUCTION

   Sports gambling has become an increasingly popular pastime across the United States. Millions of Americans are attracted to the possibility of hitting it big and are willing to risk their own money to do so. Previously, sports gambling was illegal under the Professional and Amateur Sports Protection Act ("PASPA"). (1) However, while it was illegal in most of the country, many still gambled through alternative markets. (2)

   In 2018, the Supreme Court decision in Murphy v. National Collegiate Athletic Association struck down this act and allowed states to adopt their own legislation regulating sports gambling. (3) Although the Murphy decision struck down PASPA under the 10th Amendment to the U.S. Constitution, its implications are widespread. Since Murphy, many states have adopted legislation legalizing sports gambling in their respective states, but the available methods to gamble in each state differ greatly. (4) This new landscape causes confusion and creates problems because bettors are unable to decide how to legally gamble, which may lead to illegal gambling and missed opportunities for the economy. The difference between online and casino gambling is a controversial topic under the Commerce Clause of the U.S. Constitution. (5)

   Part II of this Note will analyze the evolution of Commerce Clause interpretation and examine the precarious history of PASPA and sports gambling. This Part will also include an analysis of the 2018 Supreme Court decision in Murphy and the resulting state legislation that has been adopted. Next, in Part III, this Note will consider the effects of the Murphy decision. This Note will also consider the difficulties that accompany the inconsistent regulatory approaches taken by states that legalize sports gambling. In Part IV, this Note will propose that states adopt a Uniform Act to regulate sports gambling in order to have a more consistent and regulated sports gambling industry. A Uniform Act will solve the problems discussed above by creating a nationwide system for sports gambling that is both easy to understand and implement, allowing bettors to legally add to the economy.

2. BACKGROUND

   1. Commerce Clause Jurisprudence

      Article I, Section 8 of the U.S. Constitution gives Congress the power "to regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes." (6) The first case in which the Supreme Court analyzed the Commerce Clause was in 1824 in Gibbons v. Ogden. (7) In Gibbons, the Court held that commerce is related to all phases of business, not just traffic or the buying and selling of goods. (8) The Court also specified that Congress may regulate commercial activity between two or more states, but not within a state. (9)

      The next major Commerce Clause analysis came under The Daniel Ball case, in which the Court extended Congress' power to regulate commerce into the intrastate commerce sphere if the goods being transported within a state originated or ended up in another state. (10) The Court next went through a period of narrowing Congress' Commerce Clause power. (11) Then, beginning in the 1930s, with the Great Depression looming, the Court broadly expanded the commerce power. (12) With a few more decisions developing Congress' power, the current rule comes from United States v. Lopez. (13) The Court in Lopez held Congress may (1) "regulate the use of the channels of interstate commerce," (14) (2) "regulate and protect the instrumentalities of interstate commerce," (15) and (3) "regulate those activities having a substantial relation to interstate commerce." (16) This rule creates broad control for Congress over commerce across the nation.

      The meaning of a section of the Commerce Clause, sometimes referred to as the Dormant Commerce Clause, that has long been unclear, was recently settled by the Court in South Dakota v. Wayfair. (17) The Court discussed the limits of a state's power to regulate interstate commerce, stating that "[f]irst, state regulations may not discriminate against interstate commerce; and second, States may not impose undue burdens on interstate commerce." (18) The issue in Wayfair applied these principles to state taxes. (19) The Court held the physical presence requirement, which required businesses to be physically present in a state in order to be subject to that state's taxes, is no longer applicable. (20) The new test, therefore, is whether a tax "(1) applies to an activity with a substantial nexus with the taxing State, (2) is fairly apportioned, (3) does not discriminate against interstate commerce, and (4) is fairly related to the services the State provides." (21) This holding creates a clear rule for states wanting to regulate aspects of interstate commerce occurring within their borders.

   2. PASPA & History of Sports Gambling

      The acceptance of sports gambling in the United States has long been in flux, subject to constantly changing social, political, and economic forces. Throughout the eighteenth and nineteenth centuries, sports gambling was widely supported and participated in throughout the country. (22) In the early twentieth century, however, nearly all forms of gambling were made illegal due to the belief that gambling was a social ill. (23) Sports gambling was illegal across the country until 1949, when Nevada became the first state to make sports gambling legal. (24) Even with sports gambling legal in Nevada, illegal gambling remained a large problem, one that Congress seemed helpless to control through legislation. (25) Congress struggled to control illegal gambling because "[s]ophisticated criminal organizations openly defied authorities. ..." (26) Congress passed five Acts to slow the illegal sports gambling market, including the Wire Act in 1961, without success. (27)

      Eventually, in 1991, Congress gained the support of the major professional sports leagues and U.S. Senators from four states, (28) enough to make another attempt to control illegal sports gambling. This group introduced PASPA. (29) "[T]he primary arguments in favor of PASPA were (1) protecting the integrity, and preserving the character, of sports; (2) shielding America's impressionable youth from vice; and (3) restricting any further spreading of state-authorized sports gambling." (30) The law was enacted in 1992. (31) PASPA states,

      It shall be unlawful for--(1) a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact, or (2) a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental entity, a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly... on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or one or more performances of such athletes in such games. (32) Exceptions were created for Delaware, Montana, Nevada, and Oregon, where sports gambling had previously been allowed. (33) Even with this statute making sports gambling illegal, sports gambling was still a $150 billion industry in 2018. (34)

      The first major challenge to PASPA came under National Collegiate Athletic Association v. Governor of New Jersey (Christie I). (35) In 2013, New Jersey passed a sports gambling law, which a group of sports leagues challenged as violating PASPA. (36) New Jersey responded by arguing PASPA is outside of Congress' Commerce Clause powers and that it also violates the anti-commandeering and equal sovereignty principles. (37) The Third Circuit Court of Appeals concluded PASPA was constitutional. (38) The court stated, "the activity PASPA targets, state-licensed wagering on sports, may be regulated consistent with the Commerce Clause." (39) The court reached this conclusion because national sports and gambling are economic activities, sporting events "substantially affect" interstate commerce, and gambling on sports events also substantially affects interstate commerce. (40)

      In response to this ruling, New Jersey enacted a law in 2014 repealing its current state law prohibitions, which had the effect of allowing sports gambling in casinos and racetracks. (41) The sports leagues responded to this with another challenge in National Collegiate Athletic Association v. Governor of New Jersey (Christie II). (42) In this case, the Third Circuit held this new 2014 law violated PASPA. (43) The court explained this law authorized sports gambling, which is prohibited under PASPA, because it allows casinos and racetracks to operate sports gambling when this would be illegal without this law. (44) In addition, the court analyzed the definition of "authorize" and concluded this law does authorize sports gambling by specifically controlling where, by whom, and on what events bets may be placed. (45)

   3. Murphy v. Nat'l Collegiate Athletic Ass'n.

      The most recent step in the PASPA...