The Nuclear Path To Legal Sports Betting
A drastic solution to the stupid ban on sports gambling.
The other Sunday something happened I thought was only possible in dreams — my wife actually asked me to watch football. I owe this small miracle to sports betting.
The night prior we were at Delaware Park Casino playing poker when I decided to take advantage of the only legal sports betting East of the Mississippi, albeit a severely limited form. Delaware offers NFL parlay “lottery” cards due to an exception under the Professional and Amateur Sports Protection Act (“PASPA”) that grandfathered in existing sports betting laws in Nevada, Oregon, Montana, and Delaware when enacted in 1992. New Jersey also had an opportunity to legalize full-scale sports betting under PASPA, but bungled doing so in true Jersey fashion.
After filling out a variety of parlay cards, I asked my wife if she wanted to take a crack. She wisely went with the Patriots -6.5 over the Bills, Saints +3.5 over the Seahawks, and Packers +2.5 over the Falcons for a 5.5 to 1 payout. The first two picks hit fairly easily, but the Packers/Falcons game was heading toward a tight finish.
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With my Steelers on a bye and my fantasy team cruising to a victory, I was milling about the house pretending to be useful when I heard those glorious words: “Steve, come watch the end of this game.” You don’t have to ask me twice. We watched the entire fourth quarter together and celebrated the narrow Packers cover.
Paging Roger Goodell. If you want to pull the NFL’s ratings out of the gutter, here is a great way to do it. Americans are already wagering $149 billion annually on sports through bookies and offshore websites according to the American Gaming Association. By comparison, only $3.3 billion is wagered legally in Nevada sportsbooks.
Fortunately, legal sports betting is slowly becoming a matter of “when” rather than “if.” A Congressional committee is now reviewing the incoherent patchwork of federal gaming laws including PASPA, the Wire Act of 1961 and the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Pennsylvania passed a resolution urging Congress to lift the federal ban on sports betting, New York Assemblyman J. Gary Pretlow is planning a legal challenge to PASPA in 2017, and Mississippi is eyeing a way to grab a piece of the potential tax revenue from legal sports betting.
Yet the best way to finally legalize sports betting, might be the craziest way.
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Despite dropping the ball in the 90s, and a series of recent federal court losses stemming from attempts to legalize sports betting, New Jersey is back at it with its most genius move yet – the so-called nuclear option. Introduced by Assemblymen Ralph Caputo and John Burzichelli, Assembly Bill 4303 would completely repeal New Jersey’s prohibition on sports betting. Doing so would allow anyone to open a sportsbook. In other words, the corner bookie could literally be on every corner.
The Bill has almost no chance of ever passing, but it is an attention-grabbing middle finger to PASPA that might just force Congress’ hand. PASPA prohibits “a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact, . . . a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly (through the use of geographical references or otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.”
By completely removing all laws pertaining to sports betting, such as the seemingly necessary regulation of sportsbook operators, limiting sportsbooks to existing casinos, enforcing taxes, and monitoring wagers for signs of corruption, New Jersey could render PASPA useless. It is also a direct nod to the unintended consequences of a flawed Third Circuit decision preventing the Garden State from legalizing sports betting. In a statement attached to the Bill, the drafters explained that:
This bill implements the decision of the United States Court of Appeals for the Third Circuit in National Collegiate Athletic Association v. Governor of New Jersey, 730 F.3d 208 (3d Cir. 2013) and National Collegiate Athletic Association v. Governor of New Jersey, 2016 U.S. App. LEXIS14606 (3d Cir. 2016). In its 2013 decision, the court in interpreting the Professional and Amateur Sports Protection Act of 1992 (PASPA), 28 U.S.C. 3701 et seq., stated that it does “not read PASPA to prohibit New Jersey from repealing its ban on sports wagering.” National Collegiate Athletic Association, 730 F.3d at 232. The sponsor believes that the court, in its 2016 decision, made it clear that a total repeal by New Jersey of its ban on sports wagering would not violate PASPA. This bill would totally remove and repeal the State’s prohibitions, permits, licenses, and authorizations concerning wagers on professional, collegiate, or amateur sport contests or athletic events.
Most politicians would never vote for New Jersey’s nuclear option, particularly with the deep pockets of the casino industry opposed to a free-for-all, Wild West version of sportsbooks. But what if New Jersey was not alone? What if 20 states simply repealed their prohibitions on sports betting to dare the Federal government to enforce PASPA?
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It sounds crazy, but Colorado disobeyed federal law when it legalized recreational marijuana and this week there will be numerous other states voting to join it. Thus far, the Feds have not had to actively enforce PASPA since it granted a private right of action to seek an injunction to stop sports betting to any “professional sports organization or amateur sports organization whose competitive game is alleged to be the basis of such violation.”
Think about how insane that is. Congress granted the NFL, NHL, MLB, NBA, and NCAA the same power as the damn U.S. Attorney General to enforce Federal law.
The leagues prevailed in New Jersey, but what would happen if the leagues had to fight multi-front battles in more than a dozen states? Would they really stretch their resources that thin to “protect the integrity of the game” while actively embracing daily fantasy sports?
Those questions are why the nuclear option is the only way to go if Congress fails to change or repeal PASPA. Either force the leagues to give up or present them with the terrifying future of completely unregulated sports betting.
Although New Jersey is unlikely to go “nuclear” anytime soon, its latest proposal illuminates a path potentially so unpalatable that Congress and the leagues give in to what the state ultimately wants. It is way to force the long overdue revising of PASPA.
For now, I’ll continue taking my money over the border to Delaware, but from here on out I’ll let my wife make the parlay picks.
Steve Silver is a former sports reporter for the Las Vegas Sun and is now a lawyer in Philadelphia representing athletes in eligibility proceedings. You can reach him at steve@thelegalblitz.com or on Twitter @thelegalblitz.
Photo by Glenn Pinkerton/Las Vegas News Bureau via Getty Images
