The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Are You Ready for Some Legalized Sports Betting?

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.

If you were ready for some football, then the National Football League’s 2017 season opener on Thursday, September 7, provided quite a tasty first course:  The Kansas City Chiefs upset the favored New England Patriots by a final score of 42-27, well outside the 8-point spread that bookmakers offered on the game.  Bettors supporting the underdogs would have fared well… and most probably did, albeit while breaking the law.

Unfortunately for most 10th Amendment supporters, states’ rights advocates, libertarians, and others who might be contemptuous of an overreaching federal government, a Washington-knows-best 1992 law, the Professional and Amateur Sports Protection Act (PASPA), made it illegal for all but four states to make their own decisions about whether to allow sports betting.  And of those four states (Nevada, Delaware, Oregon, and Montana), only the Silver State—which already had legalized betting on its books by the time PASPA was enacted—allowed virtually all types of sports wagering.  As a result, Nevada currently enjoys a virtual monopoly on sports betting, while all other states are effectively precluded from breaking into the field.

That is, unless New Jersey has its way.

After the Supreme Court agreed to hear the Garden State’s case in support of legalizing sports betting, Gov. Chris Christie (R-N.J.), et al., filed a brief citing, in part, the “anti-commandeering” principle implicit in the U.S. Constitution that “state legislatures are not subject to federal direction… PASPA compels States to regulate—indeed, prohibit—sports wagering and therefore exceeds Congress’s authority.”

Additional tenets being argued by sports-betting proponents include the non-delegation doctrine and equal sovereignty, both argued convincingly in an amicus brief submitted by Florida State University professor Ryan M. Rodenberg.  As reported by Dustin Gouker in the Legal Sports Report, “[Rodenberg] says that the leagues shouldn’t have the enforcement power that PASPA provides them with, and that states shouldn’t be grandfathered out of the law,” with both aspects of the law raising constitutional issues.

Regarding equal sovereignty, Gouker writes, “PASPA, quite simply doesn’t treat states the same, and there’s no good reason that it doesn’t.”  Quoting Rodenberg:  "First, PASPA differentiates favored grandfathered States and non-grandfathered States, with the latter completely barred from legalizing sports betting with their borders.  Second, Nevada is treated more favorably than some of the other exempted States.  Both tiers of state-level distinctions violate the equal sovereignty doctrine."

By outsourcing regulatory authority to private sports leagues (e.g., the respondents in this case, the National Collegiate Athletic Association, the National Basketball Association, the National Football League, the National Hockey League, and the Office of the Commissioner of Baseball), PASPA unconstitutionally violates the “private nondelegation doctrine.”  Gouker again highlights Rodenberg, persuasively:  "What if Congress banned certain States from enacting or amending a minimum wage law and delegated follow-up regulatory efforts—via civil litigation seeking injunctive relief against state officials trying to boost wages among hourly workers—to private fast food companies who oppose high minimum wages?  Or, what if Congress prohibited the vast majority of States from enacting laws to address hydraulic fracturing, with private oil and natural gas companies statutorily deputized to sue governors who signed fracking legislation?  Such hypotheticals seem absurd, but both mimic how PASPA operates in the sports wagering context.  In this case, five sports leagues who claimed to have an anti-sports gambling stance twenty-five years ago have now weaponized PASPA to prevent some States from enacting certain forms of sports betting legislation."

The American legal quandary has not been lost on Dr. David Frost and Rick Parry, both from the United Kingdom, where a “very open and visible betting industry” was legalized in 1961.  In essence, their arguments in favor of a transparent legal framework echo, in spirit, one of the late Supreme Court Justice Louis Brandeis’s most famous quotes:  “Sunlight is said to be the best of disinfectants…”  As the Britons point out in their September 27, 2016 paper, “The Key to Sports Integrity in the United States:  Legalized, Regulated Sports Betting:”  "It’s not often that a regulatory regime in the United States is compared with that in Russia or China, but American restrictions on sports betting much more closely resemble those nations than they do European nations…  [T]here is little doubt that China and America represent the world’s biggest illegal markets…  Americans’ losses on illicit sports betting were slightly more than the amount that British bettors lost on sports betting at legal betting shops in the same year…  Whatever the detailed reasons, the reality to be faced is that sports betting will take place, and on a significant scale, whether illegally as in countries like America, India and China or legally as in countries like Australia, Great Britain and France."

Frost and Parry offer the following conclusion:

"…America lags greatly behind the rest of the world in the area of sports betting.  Rather than setting the standard, the United States is on par with Russia and China, having forced a groundswell of black market gambling by prohibiting the popular pastime of sports betting.  Illegal gambling leaves sports open to manipulation, allowing illicit actors to operate freely.  Moreover, the lack of transparency in black market betting leaves little opportunity to deal with problems that can be linked to gambling, including problem gambling, underage gambling, crime and match fixing.  In order to bring the United States up to international standards, choke-off black market gambling and preserve and protect the integrity of sports, America should implement a sound and robust regulatory framework to legalize sports betting, drawing on the experience of mature gaming markets, such as Great Britain."

In lieu of Congress heeding such recommendations and repealing PASPA, the best “bet”—at least in the near term—for the restoration of states’ rights in this respect may reside with the Supreme Court, when the high court rules on the New Jersey case.

 

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