We are closing on a huge anniversary. May 14th will mark one full year since The United States Supreme Court made a remarkable decision to repeal the federal ban on sports gambling. In the historic case of Murphy vs. National Collegiate Athletic Association (NCAA), our nation’s high court backed the state of New Jersey and it’s petition to add sports betting in casinos and racetracks. A final score tallying 6-3 was officially recorded with the majority opinion given by Associate Justice Samuel Alito. Among the dissenting parties included: Justices Ruth Bader Ginsburg, Sonia Sotomayor and Stephen Breyer to a small degree. The landmark verdict swiftly paving the way for individual states to draft sports betting laws primarily on their own terms.
The judgment erased a 1992 bill once inked into law by President George H.W. Bush.
Also known as the Bradley Act, this would prohibit states other than select ones previously outlined (Nevada, Delaware, Oregon and Montana) from adopting any new legislation tied to sports wagering.
In this ruling the court would critically find Provisions of the Professional and Amateur Sports Protection Act that prohibit state authorization and licensing of sports gambling schemes violate the Constitution’s anticommandeering rule; no other PASPA provisions are severable from the provisions at issue.
To expand further on that note, Justice Alito wrote:
The anticommandeering doctrine may sound arcane, but it is simply the expression of a fundamental structural decision incorporated into the Constitution, i.e., the decision to withhold from Congress the power to issue orders directly to the States.
This monumental action has a potential to impact national affairs well beyond the scope of gaming and sports. The anti-commandeering doctrine being cited is closely tied in to a separate yet far more significant political issue. Namely the controversial matter of sanctuary cities. These municipalities will often rule in direct opposition to national immigration policy. That includes offering a safe harbor for undocumented illegal immigrants. They can work to impede or even prevent federal agencies including Immigration and Customs Enforcement (ICE) as well as U.S. Customs and Border Protection (CBP) from executing legal orders.
Beyond that we could possibly see a carryover effect on the nationwide argument for legalization of cannabis. Likewise a major flash point for debate. In addition to a long and heated history. The subject similarly featuring a question regarding states’ rights. As a result of Murphy, states that have already legalized recreational and/or medicinal marijuana use, and regulated the same, likely need not be worried about federal attempts to repeal those laws through a federal mandate. The Court has made clear that Congress cannot strong-arm states and localities into enacting regulations, or prohibiting certain commercial activity. Congress may only legislate its own federal laws by regulating the conduct of private actors, not the states.
As for the newly minted domestic sports gaming industry, there has been a swift burst of legislative activity. From the time last year when Bradley Act restrictions officially were lifted, seven states have passed then legalized and even regulated sports betting. They include: New Jersey, Nevada, Delaware, Pennsylvania, West Virginia, Mississippi and Rhode Island. Plus Iowa and Tennessee as they each wait for governors’ to sign and make it official. The latest count of states drafting sports wagering laws solely in 2019 now numbers 28. Aside from that, both governors of Indiana and Montana just signed to legalize sports betting in the last 10 days. As that puts a running total at nearly ¾ of the continental U.S. to date.
While a good percentage of states are showing tangible progress, such endeavors don’t come without real complication. Perhaps a most pressing one would be The Wire Act.
A statute written back in 1961, The Wire Act asserts that Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.
Which would seem to contradict Murphy vs. NCAA in part. Particularly with the phrasing “information assisting in the placing of bets or wagers on any sporting event or contest”. How can it be reconciled?
It is especially relevant here as New Hampshire has met some resistance from the U.S. Department of Justice. The main argument centers on an updated interpretation of The Wire Act as determined by DOJ and their Office of Legal Counsel. As they went quietly but defiantly and changed the rules. In a memo dated November 2, 2018 they announced This Office concluded in 2011 that the prohibitions of the Wire Act in 18 U.S.C. § 1084(a) are limited to sports gambling. Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-sports-related betting or wagering that satisfy the other elements of section 1084(a).
Much like New Hampshire, we see a parallel with New Jersey. As this week state Attorney General Gurbir S. Grewal sued the U.S. Justice Department for failing to turn over documents related to the department’s reinterpretation of the federal Wire Act.
Reports are widely emerging lately that billionaire casino boss and Republican mega donor Sheldon Adelson may allegedly be linked with efforts to sway the DOJ.
As a result of that revision, online gaming and lottery sales appear to be in serious jeopardy. And certainly there is a lot of money at stake. New Jersey state-sponsored gaming reportedly brings annual revenues exceeding $350 million along with $60 million in taxes as well. The suit filed by New Jersey on Tuesday coincides with a comparable complaint entered by the New Hampshire lottery commission three months ago. With a fraction of said proceeds allotted for public education, the granite state claims that conclusion reached by DOJ effectively puts their public school students at risk.
Although states got license to set up virtual shop, still that comes with untold hidden perils. In fact it’s no sure thing. So far all indications are it’s a true gamble.