Sports Law Blog Information

Earlier today, Judge Shipp entered an order setting oral argument for October 31, 2014, at 1:00 PM in Trenton. (The docket notation is below). This comes as a surprise (and could be seen as a positive development for New Jersey) because Judge Shipp had previously said that the motion "will be decided on the papers." 

Happy Halloween!

10/03/2014

167

TEXT ORDER: As the parties are aware, the motion for clarification and/or modification of the Court's February 28, 2013 injunction was originally returnable on October 6, 2014. Counsel subsequently requested, and the Court granted, a request for an extension of the briefing schedule. As provided in the Consent Order, opposition briefs were filed on September 29, 2014 and reply briefs shall be filed by October 10, 2014. Oral argument on the motion is scheduled for Friday, October 31, 2014 at 1:00 PM at 402 East State Street, Trenton, NJ, Courtroom 7W. SO ORDERED by Judge Michael A. Shipp on 10/03/2014. (FH) (Entered: 10/03/2014)

09/08/2014

Set Deadlines as to 161 MOTION Clarification and/or Modification of Injunction re 143 Order on Motion for Summary Judgment, . Motion set for 10/6/2014 before Judge Michael A. Shipp. The motion will be decided on the papers. No appearances required unless notified by the court. (eaj) (Entered: 09/08/2014)

Late last night, the United States Department of Justice (the "DOJ") filed its memorandum of law in opposition to New Jersey's motion to clarify and/or modify the federal court injunction that has been in place since February 28, 2013 prohibiting the State from authorizing, licensing or regulating sports wagering at casinos and racetracks.

The DOJ's opposition brief largely mirrors the Leagues' brief filed earlier in the day, but it is noteworthy in two respects. First, as expected, the DOJ argues that any "repeal" of the state-law prohibition on sports wagering which is limited solely to casinos and racetracks would still run afoul of the Professional and Amateur Sports Protection Act ("PASPA") because New Jersey's casinos and racetracks remain subject to an extensive licensing and regulatory scheme by the State. Thus, as the DOJ points out, "even under an attempted reformulation of the Sports Wagering Act, it would still be impossible to operate a sports wagering pool without first having a State-issued license." The DOJ argues that "[a]s long as the only entities that may engage in sports wagering must be licensed by New Jersey, New Jersey is in effect licensing sports wagering, which is squarely within PASPA's licensing prohibition."

Second, the DOJ backtracks from its prior statements that New Jersey is free to repeal its state-law prohibition against sports wagering "in whole or in part" without violating PASPA. As I detailed in an earlier post, the DOJ (through U.S. Attorney Paul Fishman and U.S. Solicitor General Donald Verrilli, Jr.) made these unequivocal statements throughout the prior judicial proceedings, including in appellate briefing before the Third Circuit, at oral argument, and in a filing made with the U.S. Supreme Court. In his Third Circuit brief, Mr. Fishman wrote that "nothing in [PASPA] requires New Jersey to maintain or enforce its sports wagering prohibitions." Later, when asked at the June 26, 2013 oral argument whether New Jersey could "repeal" its ban against sports wagering, Mr. Fishman responded "[a]s a matter of law, it could." When further pressed by the Third Circuit panel if such a repeal would violate PASPA, Mr. Fishman responded by saying "no." The U.S. Solicitor General reaffirmed this position ten months later in a filing with the Supreme Court when he stated that "PASPA does not even obligate New Jersey to leave in place state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPA's enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part." (United States Brief to the Supreme Court in Opposition to Petitions for Writ of Certiorari (Nos. 13-967, 13-979 & 13-980), dated May 14, 2014, at p. 11)

How does the DOJ retreat from such clear and unequivocal statements? Easy. By ignoring two of them, and pointing to less damaging statements that are susceptible to differing interpretations. On page 17 of its opposition brief, the DOJ identifies three "selectively quoted" statements that New Jersey cites as evidencing the DOJ's acknowledgement that a partial repeal of the state-law prohibition on sports betting would not violate PASPA:

On page 28 of the appellate brief for the United States; Nothing in the statute requires New Jersey to maintain or enforce its sports wagering prohibitions." 

"On page 30 of the appellate brief for the United States: "[T]he bare repeal or non-enforcement of New Jersey's sports wagering prohibitions would not constitute such an 'authorization' because there would be no State statute or compact granting anyone authorization. to conduct sports wagering."

 At pages 68 and 69 of the appellate oral argument transcript; "[I]f New Jersey wants to tinker with its gambling statute in a reasonable exercise of state law and enforcement power, it's perfectly free to do that."

(DOJ Brief, p. 17)

While accusing New Jersey of using "selectively quoted" statements, isn't the DOJ guilty of the same thing here? There is no mention of Mr. Fishman's acknowledgment at oral argument that New Jersey was free to repeal its sports betting ban and that doing so would not violate PASPA. Nor is there any reference to the U.S. Solicitor General's incredible statement (from his Supreme Court filing) that New Jersey is free to repeal its state-law prohibitions "in whole or in part." It's as if the DOJ used hydrofluoric acid (Walter White-style) to make those prior statements disappear.

The DOJ offers an entirely unconvincing explanation as to the import of those prior statements (at least the ones that the DOJ has chosen to address). The DOJ contends that New Jersey has "misread" those statements and that it meant only to say that New Jersey has "options" when it comes to sports betting:

"These identified quotations reflect the United States' acknowledgment that New Jersey has options regarding sports wagering if it wishes to forego the licensing and the authorizing by law of sports wagering (as well as the other conduct prohibited by PASPA). The presence of those options demonstrates that there is no unconstitutional compulsion as New Jersey incorrectly suggests."

(DOJ Brief, pp. 17-18)

This does not even pass the giggle test. Expect New Jersey to hammer the DOJ on this point in its Reply Brief. But that doesn't necessarily mean that New Jersey will prevail on its motion. Far from it. As I wrote previously, I expect New Jersey's motion to be denied. It's not even a close call, as New Jersey's "implied repeal" and "severability" arguments are rather flimsy. But the real danger here is that Judge Shipp may go even further than just denying New Jersey's motion; he may clarify the injunction in a manner that is detrimental to New Jersey's future legislative efforts. For example, he could broaden the injunction to include language stating that while New Jersey is free to repeal its state-law prohibition against sports betting, it cannot limit such repeal to the State's racetracks and casinos given that they remain subject to an extensive state licensing and regulatory regime. Given the low likelihood of success, maybe New Jersey's best play here is to simply withdraw the motion, and focus on more legally sustainable efforts to bring sports betting to the Garden State. The moral of this story: Be careful what we wish for.

NBA Commissioner Adam Silver sent shock waves throughout the sports and gambling industries when he appeared at the Bloomberg Sports Business Summit yesterday and proclaimed that expanded legal sports betting was "inevitable" and that the league would "ultimately participate in that." This was shocking because the NBA has long been opposed to sports betting (who can forget the Tim Donaghy scandal?) and had recently joined forces with the three other major professional sports leagues and the NCAA in successfully blocking New Jersey's efforts to legalize sports betting. Of course, as some have noted, Commissioner Silver's comments recall his interview earlier this year when he acknowledged that sports betting increases interest in games that might otherwise be blowouts. Nonetheless, it is a quantum leap to go from acknowledging the obvious (but illegal) to embracing the concept of state-regulated sports betting, especially so soon after the recent federal court battle ended at the doorsteps of the Supreme Court. His encouraging comments may open the door to creative legislation (from pro-gaming states such as New Jersey and Delaware) in which single-game sports wagering would become legal and, in exchange, the leagues would be paid a licensing fee and/or share in the revenues derived from sports wagering.

Just three weeks earlier, Sports Law Blog stalwarts Michael McCann and Gabe Feldman spoke on this topic at the ABA Annual Meeting in Boston. They were joined on a panel by former U.S. Solicitor General Theodore B. Olson, Supreme Court litigator Erin Murphy, and West Virginia Solicitor General Elbert Lin (pictured below), the principal players in the NCAA v. Christie litigation. The title of the program was Game-Changer: The States' Big Gamble on Legalized Sports Betting, and, as its name implies, the program examined the controversy (as well as the federal constitutional issues) surrounding the efforts by states to legalize and regulate sports betting. As many of you know, a 1992 federal law (the Professional and Amateur Sports Protection Act a/k/a "PASPA") prohibits state-sponsored sports betting in every state except for those states (such as Nevada) that had conducted a sports wagering scheme at any time between January 1, 1976 and August 31, 1990. New Jersey had challenged the constitutionality of PASPA in the NCAA v. Christie litigation, and persuaded one Third Circuit judge (albeit, in a dissenting opinion) to conclude that PASPA was unconstitutional because it "violated principles of federalism." 

Anticipating (wrongly!) that the Supreme Court would grant certiorari, I persuaded the ABA's Tort Trial and Insurance Practice Section (I am the Chair of its Appellate Advocacy Committee) to present a CLE program devoted to this case, touting its "federalism" component that transcended sports law. I then invited the key players in the sports betting legal debate (Mr. Olson, Ms. Murphy and Mr. Lin) and two of the nation's leading sports law experts (Mike and Gabe, of course!) to be panelists. The ABA selected the program to be one of its "Presidential Showcase" events, owing to the nationally-significant subject matter and the quality of our speakers. The program was a resounding success, with some spirited exchanges among the panelists. Ted Olson really seemed to enjoy himself, as did Mike and Gabe. There is no better moderator than Mr. McCann, and Gabe brought some incredible insights to the issue of whether the sports leagues' recent partnering with daily fantasy sports leagues undermines their current opposition to sports betting. Thankfully, the program was videotaped, and we expect to post it soon.

The written program materials are available here.