Betting On Federalism At The Supreme Court

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Andrew F. Quinlan President, Center for Freedom and Prosperity
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The Supreme Court heard arguments in Christie v. NCAA last week. The case pits the New Jersey governor against the NCAA and various professional sports leagues seeking to block the state’s moves to partially legalize sports betting. Like many states, New Jersey is looking to expand the freedom of its citizens to engage in certain types of gambling. Congress and the courts should not stand in their way.

The federal Professional and Amateur Sports Protection Act (PASPA) says that states may not “sponsor, operate, advertise, promote, license, or authorize by law or compact” sports betting. The NCAA, along with leagues including the NBA, NFL, NHL, and MLB, argue that PASPA prevents New Jersey from partially legalizing sports betting under certain conditions.

At the center of the case is the Tenth Amendment, which enshrined in the Constitution the federalist system that sees political powers shared between the states and the federal government. And according to Supreme Court precedent, states cannot be “commandeered,” such as by being required to enforce federal law or enact any legislation.

When interpreted as the sports leagues wish, PASPA usurps New Jersey’s right to set its own rules by forcing it to maintain statutory prohibitions against behavior that it no longer wishes to prohibit, though even a ruling favorable to New Jersey would still mean that the federal prohibition applies within the state. However, most enforcement actions are initiated by states, and if enough of them moved to legalize sports gambling it would put pressure on the federal government to do the same.

A similar battle is playing out over the effort of some states to allow online poker for those within their borders. Unlike with sports betting, there is no federal law explicitly prohibiting poker or other forms of gambling, online or off, though for a time the government pretended otherwise.

Even though the Wire Act specifies that it prohibits “the placing of bets or wagers on any sporting event or contest” when by “transmission in interstate or foreign commerce,” it was for a couple decades wrongly used to also prohibit non-sports related gambling and online activity that occurs even entirely within one state.

In 2011, the Justice Department appropriately decided that a law written before the internet existed targeting the mafia’s telephone-run sports gambling racket doesn’t actually say anything about non-sports related, online, or intrastate gambling. No longer would the Wire Act be misapplied to online and casino-style gaming.

That would have been the end of it if not for the dogged efforts of billionaire casino owner Sheldon Adelson. Recognizing the threat posed to his brick-and-mortar casinos by online competition, Adelson for years has pushed a bill written by his lobbyists, the Restoration of America’s Wire Act (RAWA), to reverse the DOJ’s 2011 acknowledgment of the Wire Act’s statutory limits.

Motivated by his hefty donations, lawmakers have tried numerous times to slip RAWA into “must-pass” spending bills, but so far without success. Now some are trying another approach, with Sen. Lindsey Graham and Sen. Dianne Feinstein urging the Department of Justice in a letter to backtrack again by reversing the 2011 decision that returned the Wire Act to its original meaning.

PASPA and RAWA are twin threats to federalism. Thankfully, in last week’s hearing, justices responded favorably to New Jersey’s claim that it and other states are free to establish their own laws. Hopefully they follow through. Congress must now also let go of its cronyist pursuit of RAWA.

Andrew F. Quinlan is co-founder and president of the Center for Freedom and Prosperity.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.