By Thomas Quigley
On December 21, 2012, a United States District Court Judge for the District of New Jersey, in NCAA v. Christie, issued an order denying New Jersey Governor Chris Christie and the defendants’ Motion to Dismiss and their Cross Motion for Summary Judgment. The defendants’ motions challenged the plaintiffs’ — comprised of the NCAA, NFL, NBA, NHL, and MLB — standing in the case. The Leagues are now focused on moving forward with their suit against Governor Christie and New Jersey’s Sports Wagering Law; the Defendants now face an uphill battle after losing their challenge to the sports Leagues’ standing as they face the wrong side of precedent from a 2009 Third Circuit decision in Office of Commissioner of Baseball, et al. v. Markell, et al.
Governor Christie was attempting to cut off the Leagues’ challenge to New Jersey’s Sports Wagering Law. The law is an amendment to New Jersey’s Constitution to permit gambling on any professional, college or amateur sport, except collegiate games involving colleges from New Jersey or college games in New Jersey venues. The New Jersey law is seemingly in direct conflict with the Professional and Amateur Sports Protection Act (PASPA) which prohibits state-sponsored sports gambling. 28 U.S.C. § 3701, et seq. The statute does offer a few exceptions — Nevada, Oregon, Montana and Delaware were all grandfathered in to varying degrees — and New Jersey had an opportunity to be included in such an exception had they licensed sports betting during the period immediately following the passage of PASPA 20 years ago; however New Jersey declined to do so.
The Court’s Ruling
As a response to the Sports Wagering Law the Leagues filed suit, and then a “Motion for Summary Judgment, and If Necessary to Preserve the Status Quo, a Preliminary Injunction,” in hopes of at least delaying sports gambling in New Jersey until the lawsuit had a chance to move forward. The defendants subsequently filed their Cross Motion for Summary Judgment challenging the Leagues’ standing in the case. Governor Christie asserted that the Leagues lack standing because they fail to meet the injury-in-fact, causation, and redressibility prongs that standing requires.
As to proving injury-in-fact, the defendants argued that because the Leagues have enjoyed success despite the existence of legalized sports gambling it would be unlikely that the plaintiffs would suffer harm if the Sports Wagering Law went into effect. Additionally, the defendants argued that any harm would not be immediate or imminent, and that the injury asserted by the Leagues was not particularized. The court rejected Governor Christie’s arguments and was persuaded by the Leagues’ assertions that they have an interest in how their fans perceive the games.
Undisputed material facts were presented in the way of polls that showed some fans believed gambling and game fixing negatively affects the integrity of the game, and up to 36 percent of fans cited gambling as a problem among the sports leagues. Additionally 17 percent of respondents to one poll said they would spend less money on the leagues if professional sports franchises were located in Las Vegas. Finally, strengthening their already dominant position in the eyes of the court, the Leagues pointed out New Jersey’s own acknowledgment to the damages of sports gambling through New Jersey’s attempt to maintain integrity and protect the college teams and games located in New Jersey by excluding them from the Sports Wagering Law. The court, without much hesitation, found this sufficient injury for standing.
The Court also found that Leagues’ alleged injuries are fairly traceable to the defendants because increased gambling increases the perception that the integrity of the games is suffering, and that even a slight reduction in the impact of gambling is enough to establish redressibility.
The Markell Case
The Third Circuit, the same circuit that the District Court in New Jersey is in, previously heard a challenge to PASPA in Office of Commissioner of Baseball, et al. v. Markell, et al. and held that Delaware’s attempt to authorize state-sponsored sports gambling violated PASPA. Markell, 579 F.3d 293 (3d Cir. 2009). In the Markell case, Delaware, having been one of the four exempted states in PASPA, attempted to reinstate sports gambling as the state had in the 1970s. The Leagues opposed Delaware’s proposed sports gambling, as they oppose New Jersey’s, and the Third Circuit ruled that Delaware could only institute a gambling scheme similar to the one that was implemented in the 1970s that falls under the scope of PASPA, and Delaware could not expand its gambling scheme. This had the effect of regulating Delaware’s sports gambling to only three, or more, team parlay bets on NFL games. Id.The Third Circuit did not hear arguments on standing in the Markell case but it did address the issue of jurisdiction in its opinion.
In the present matter, the Leagues relied heavily on the Markell case to support its standing argument, asserting that because the Markell Court did not specially address standing it was obvious that the Leagues had standing to challenge a state’s violation of PASPA. The defendants in NCAA v. Christie attempted to distinguish the present case from Markell and took issue with the Third Circuit’s opinion, calling it a “drive-by jurisdictional analysis” that should not bind U.S. District Court Judge Shipp. Perhaps unsurprisingly, Judge Shipp sided with the Third Circuit and the Leagues.
Constitutionality of PASPA
In the defendant’s Cross Motion for Summary Judgment, along with challenging the plaintiffs’ standing, defendants also raised challenges to the constitutionality of PASPA. Judge Shipp has scheduled a date for oral arguments regarding the constitutional issues will be set after January 20, 2013. The defendants will likely argue that federal statute usurps the State’s Legislatures decisions and that the statute is discriminatory because it allows some states to legalize sports gambling and not others. Governor Christie and New Jersey will likely be fighting an uphill battle as the precedent in Markell was set less than five years ago upholding PASPA and limiting Delaware, a member of the exception, to a very narrow scope in their sports gambling scheme.
New Jersey appears to have a weaker case than Delaware had having not been included in the PASPA exception. And the courts seem to be favoring Congress’ power to regulate sports gambling for the good of the game.
