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G-Men in Jersey

The Department of Justice files a motion to intervene in sports betting case

G-Men in Jersey

A powerful opponent has lined up against New Jersey in its effort to bring sports betting to the state—the federal government.

The U.S. Department of Justice has filed a motion to intervene in a lawsuit seeking to challenge New Jersey’s sports betting law, asserting its right to defend the constitutionality of the 1992 Professional and Amateur Sports Protection Act (PASPA). The Justice Department will join the four professional sports leagues and the NCAA in their lawsuit to prevent New Jersey from implementing a sports betting program at Atlantic City casinos and state horse racing tracks. Oral arguments were to be presented in court in Trenton in late February.

“This development, while not particularly helpful, is not surprising, and it does not impact our legal strategy in any way,” said New Jersey state Senator Ray Lesniak.

Lesniak was one of several lawmakers who passed a sports betting bill in late 2011 following a voter referendum. Governor Chris Christie signed the bill last January, and vowed to issue gaming licenses by the fall in defiance of the federal ban. The action provoked the NBA, NFL, NHL, Major League Baseball and the governing body of college sports to file a lawsuit against the governor and the state attorney general’s office. U.S. District Judge Michael Shipp ruled in favor of the leagues, declaring that they had standing in the case since their athletic events would be directly affected by sports betting. The February 14 arguments were to debate the constitutionality of PASPA, which prevents sports betting in all but four states—Nevada, Oregon, Montana and Delaware.

“We think they’re wrong. We think the fact they allow four states to do it and other states not to do it is flawed,’’ said New Jersey Senate President Stephen Sweeney. Sweeney, along with the state Thoroughbred Horsemen’s Association, has also been allowed to intervene in the case.

Beating the Deadline

The DOJ had been given until February 1 to respond to challenges to the constitutionality of the law and did so just days shy of the deadline. In early February, the Department of Justice issued a 33-page document on its defense of PASPA as part of its case to prevent New Jersey from implementing a sports betting program. The brief could go a long way in influencing the decision by U.S. District Judge Michael Shipp.

On New Jersey’s argument that PASPA violates anti-commandeering principles of the Tenth Amendment, the brief counters:

“Under that doctrine, Congress cannot require states to take affirmative actions to implement a federal regulatory program. But PASPA does not require New Jersey to take any affirmative action; rather, it merely prohibits New Jersey from sponsoring, operating, advertising, promoting, licensing, or authorizing sports gambling.”

Concerning the state’s claim that PASPA violates the Constitution‘s Commerce Clause, the DOJ brief reads:

“PASPA is also a valid exercise of Congress’ Commerce Clause authority because it is reasonable to believe that sports gambling has a substantial effect on interstate commerce. Moreover, PASPA’s provisions, which prevent the expansion of state-sponsored sports gambling, are rational methods of achieving Congress’ purposes of stopping the spread of sports wagering and of guarding the integrity of athletic competitions.”

The brief goes on to submit that the matter of equal sovereignty and equal footing doctrine put forth by New Jersey has no relevance in the case.

Lesniak was not convinced by the DOJ argument.

“They’re saying we can’t have legal sports betting, but they allow illegal sports betting to go on,” he said. “I think the court will see the foolishness of that.”

Some experts disagree, however.

“The Department of Justice’s brief introduces the court to a powerful ally of these plaintiffs,” Stuart Hoegner, an attorney for the Gaming Counsel Professional Corporation, told Forbes. “Constitutional positions coming from the plaintiffs are one thing, but Judge Shipp may pay those arguments more respect and attention when coming directly from the executive branch.  It’s not dispositive; the court will make a determination on the merits. But it lands a persuasive intervener in the case to help the leagues.”

This could be New Jersey’s last chance to see a sports betting program go forward. The landmark case will resolve the question of PASPA’s constitutionality, and would affect any efforts by states in the future to regulate and legalize sports betting.

Robert Rossiello is a contributing editor for Global Gaming Business magazine and the Art Director for Casino Connection Atlantic City. He updates and manages this site and designs and produces the supplemental magazines to Global Gaming Business: Casino Design, G2E Preview, RD&E and Tribal Government Gaming. He also is a photographer for these magazines and this website.

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