Sports Gambling in Nebraska: a Good Bet for the Good Life

• Publication year: 2021
• Citation: Vol. 98

98 Nebraska L. Rev. 718. Sports Gambling in Nebraska: A Good Bet for the Good Life

Sports Gambling in Nebraska: A Good Bet for the Good Life

Note (fn*)

Sports Gambling in Nebraska: A Good Bet for the Good Life

TABLE OF CONTENTS

I. Introduction.......................................... 719

II. Background........................................... 720
A. History of Sports Betting.......................... 720
B. Federal Intervention .............................. 724
C. Professional and Amateur Sports Protection Act (PASPA).......................................... 725
D. Murphy v. National Collegiate Athletic Association .728
1. The Meaning of PASPA's Authorization Provision...................................... 728
2. The Anticommandeering Doctrine.............. 730
3. The Supremacy Clause and Preemption........ 731
4. The Severability Doctrine...................... 732

III. Sports Gambling in Nebraska......................... 733
A. Constitutional Referendum........................ 733
B. Interstate Pressure................................ 735
C. Reasons for Legalization........................... 736
1. Economic Incentives........................... 737
2. Public Support ................................ 738
3. Consumer Protection .......................... 740
D. Proposed Oversight................................ 741
1. Nebraska Gaming Commission................. 742
2. Nebraska Department of Revenue.............. 744
3. Nebraska Gamblers Assistance Program....... 745

IV. Conclusion............................................ 745

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I. INTRODUCTION

Nebraska should legalize and regulate sports gambling. In May 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), a federal bill designed to ban sports gambling across the United States. Consequently, sports gambling became a state issue. Each state must now decide whether to continue prohibiting or to legalize and regulate sports gambling. The Supreme Court's decision has sparked a state-by-state debate over the benefits of legalizing sports gambling. This Note examines those benefits and discusses how and why Nebraska should legalize and regulate sports gambling.

Part II provides a background on sports gambling. It examines three distinct periods of sports gambling history: the early colonization of America, the turn of the nineteenth century, and the time between the mid-1980s and the present. Part II also examines the federal government's attempt to regulate sports gambling, including the enactment of PASPA.

Part II further discusses the Supreme Court's holding that PASPA was unconstitutional. It examines the Supreme Court's analysis in Murphy v. National Collegiate Athletic Association (fn1) by discussing PASPA's "authorization" provision and how it pertains to the anticommandeering doctrine, the Supremacy Clause, and the severability doctrine. In addition, Part II examines the fallout from the Supreme Court's holding in Murphy and how each state must now choose prohibition or legalization and regulation.

Part III discusses why and how Nebraska should legalize and regulate sports gambling. It looks at the economic benefits of legalization, including how new streams of revenue can offset Nebraska's growing deficit. Moreover, it examines how public sentiment supports legalization efforts. In addition, legalization would increase employment opportunities. Part III also discusses key consumer protection components and why regulations should be implemented.

Finally, Part III proposes statutory language for creating the Nebraska Gaming Commission and enabling it to regulate sports gambling. The newly created commission would be directly supervised by the Nebraska Department of Revenue. In addition, Part III prescribes the regulatory power and responsibilities for the Commission, including tax and enforcement powers, and the responsibility to support the Nebraska Gamblers Assistance Program. Lastly, Part III examines the various pathways for the legalization of sports gambling in Nebraska.

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II. BACKGROUND

It is difficult to understand the Supreme Court's holding in Murphy(fn2) without first understanding sports betting, its history, its subsquent federal regulation, and the grounds for which Murphy was challenged. This Part seeks to provide a background of these issues and their interplay with the State of Nebraska.

A. History of Sports Betting

The United States has had a long and complicated relationship with sports betting.(fn3) Questions of legality and morality have continually been raised throughout its history.(fn4) The history of sports betting in the United States can be divided into three distinct periods: the early colonization of America, the turn of the nineteenth century, and the time between the mid-1980s and the present.(fn5)

The first period began with the colonization of America during the seventeenth century. In New England and Pennsylvania Puritan values prevailed.(fn6) Puritans believed that gambling was a sinful vice; consequently, gambling was banned in many of the New England and Pennsylvania colonies.(fn7) Other colonists, like those in Jamestown, Virginia, however, did not hold the same beliefs as the Puritans.(fn8) Many of these settlers maintained their English attitude toward gambling and even considered "gentleman's games" to be a symbol of the "gambling spirit" which characterized an American settler.(fn9) As the English presence grew in America, gambling also became more popular.

During this time gambling was often regulated by the locality and used as a source of revenue.(fn10) Local governments used gambling revenues to "build cities, establish universities, and even to help finance

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the Revolutionary War."(fn11) Revenue from American gambling helped establish or improve:

Harvard, Yale, Kings College (Columbia University), Princeton, Rutgers, Dartmouth, Rhode Island College (Brown University), the University of Pennsylvania, the University of North Carolina, and the University of Michigan, the benefit of the Masons, the fortification of New York City and Philadelphia, the construction of roads, hospitals, lighthouses and jails, the promotion of literature, the improvement of navigation on rivers, the development of industry, and even the construction of churches.(fn12)

Between 1746 and the mid-1800s revenue from gambling funded "47 colleges, 300 lower schools and 200 church groups."(fn13) Thus, gambling became immensely popular.

The second period coincided with the California Gold Rush and ran through the turn of the nineteenth century.(fn14) "The frontier spirit was revitalized, along with a seemingly endless supply of gold with which to gamble."(fn15) Omaha, Nebraska was founded in 1854 and quickly became "an oasis for people who were traveling west."(fn16) It was also a "hardscrabble place" for farmers and travelers.(fn17) It was a place where people would frequently drink and gamble before traveling across the prairie.(fn18) Some gambling experts even noted that the definition of gambling, "to take a risk to gain some advantage," fit Omaha and its frontier spirit.(fn19)

Gambling gained even more momentum with the rise of horse racing and baseball during the turn of the nineteenth century. Horse racing became popular with the first running of the "Belmont Stakes, Preakness Stakes, and Kentucky Derby ... in 1867, 1873, and 1875, respectively."(fn20) By the turn of the century horse racing had become so popular that fans could place wagers at over 300 racetracks nationwide.(fn21) In Nebraska, Omaha's Aksarben racetrack began in 1919.(fn22) The Aksarben racetrack was "the most remarkable success story" in

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all of horse racing.(fn23) On any given Saturday, "the roar of the crowd reverberated like thunder over the Nebraska plains."(fn24) Indeed, the "whole city loved its racetrack."(fn25)

At the same time, professional baseball was also on the rise. Baseball was more than a game during the Progressive Era.(fn26) It was emblematic of America's social structure.(fn27) "Its teamwork showed democracy in action; its fans were found among all classes of society; it taught America's traditional values to successive waves of immigrants; and it served as an annual ritual which united cities behind their teams."(fn28)

However, the popularity of horse racing and baseball was followed by a rise in corruption and scandal. Shortly after Nebraska opened its Aksarben racetrack, the most infamous sports betting scandal in American history took place just a few hours to the east in Chicago. At that time, the nation's conscience was shocked to discover that a crime syndicate had bribed members of the Chicago White Sox to throw the 1919 World Series.(fn29) Public outcry was immense. The eight players involved were dubbed the "Black Sox" for tarnishing America's beloved sport.(fn30) Additionally, they were banned from baseball and indicted with five other gamblers by a grand jury.(fn31)

Public sentiment toward gambling had reached a new low.(fn32) Moreover, the public began associating sports betting with criminal activities, gangsters, and threats to its beloved pastimes.(fn33) The event immortalized a little boy's plea"say it ain't so, Joe!" to White Sox star player, "Shoeless" Joe Jackson.(fn34) The plight was heard around the world.(fn35)

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In response to the scandal professional baseball...