Will a Supreme Court ruling cause walls to come crashing down this summer?

As good old 2017 draws to a close, the year ahead glows from just beyond the hill. On the philosophical front, some see the hue as the glow of an inviting beacon. Others, however, see it as the burning embers of a flame set to engulf and destroy the essence of America. On the financial side, trickle down fans and billionaires see the glow as the first stages of an ever brightening future; while balanced-budget and fair-share advocates see it as the light coming from an onrushing train. Then, there is the sports and recreational crew. To those folks, the glow is either the explosive aftermath of the vaporization of sports entertainment as we've known it, or the welcoming spotlight, roaming across the night sky to announce the opening of a new and exciting gambling emporium.

Although it will take a while, and perhaps the perspective of history, to let the philosophers and financiers know the truth of their visions, the sportsmen and gamblers may get the word much sooner.

Over the last decade or so, legalized casino gambling has spread across our nation, either through state-sanctioned gaming sites or Native American organized casinos (or a combination of the two). To this point, however, Nevada has been the only state in which legal sports betting has been offered in high profile casinos, thanks to a 1992 federal statute that prohibited any state other than Nevada, Delaware and Oregon, where it was already established, from legalizing sports betting (along with New Jersey if it had acted to legalize the practice within a year). Nonetheless, over the past several years, as casinos began to dot our nation's landscape, most were built with "bars" or "restaurants" or "Television Viewing Areas" that were constructed in a fashion that would allow them to be converted to sports betting areas if the laws were to change. Perhaps they knew something?

Earlier this month, the constitutionality of the federal restriction on the states' rights to legalize or prohibit sports betting reached the U.S. Supreme Court, in a case originally brought, surprisingly, by New Jersey. Jersey could have escaped the ban of the law by authorizing sports betting shortly after its enactment, but yielded to pressure from the NCAA and major sports leagues and did not do so. But years pass, and times change, and by 2012 New Jersey was no longer intimidated by the sports organizations and decided to join the legalized casino sports betting world after all.

When New Jersey's governor, Chris Christie, pushed through the New Jersey sports betting legalization act in 2012, he did it with the full expectation that it would be challenged, and he was not disappointed. The NCAA and all major U.S. professional sports leagues (Major League Baseball, the NFL, NBA and the NHL) all sued to stop its enactment. The District Court applied the federal statute as written, and ruled against New Jersey, as did the federal appeals court. When the Supreme Court agreed to hear the case, however, the Garden State's efforts to shake the shackles of the federal law remained alive, and sports watchers and legal eagles alike took note.

Oral argument on the case took place earlier this month, and the Supreme Court's ruling on the New Jersey challenge is expected in June of 2018. At that point, if the high court vacates the federal prohibition, many states with legalized gambling are expected to act quickly to legalize sports betting. The walls of the bars, restaurants and "Television Viewing Areas" of casinos across the nation will come crashing down, and resplendent sports "books" will arise from the dust and debris overnight.

In terms of political/legal ideology, the issue presents an interesting dynamic. Most conservatives, including a majority of the Supreme Court itself, favor states' rights, and believe in restricting federal control over matters of state interest. However, most conservatives also tend to disfavor legalized gambling, at least in public pronouncements. Accordingly, when the case came on for oral argument, lawyers, media pundits and gambling industry officials studied the proceedings intently, looking for signs of what to expect. To most, it appeared from the questions they posed that the conservative-leaning Supreme Court justices seem poised to hold that the 1992 law does, in fact, violate states' rights, noting that the questions were focused on states' rights issues, and had little to do with gambling per se.

The legal question is whether the federal law regulates gambling itself, as a federal law is allowed to do, or merely attempts to limit the states' ability to regulate the practice without implementing any federal regulation itself which would be contrary to the 10th Amendment of our Constitution. Today's Supreme Court may invalidate the federal act, due to its tendency to read the protections afforded to a state's autonomy broadly. On the practical side of things, the high court may also be leaning toward repealing the law due to the disintegration of the moral platform of the interests who originally lobbied for its enactment, and who were the plaintiffs in the challenge to New Jersey in the courts below. Despite continuing weak lip service to their historical contention that gambling weakens the integrity of sport and causes all types of public menace, the major professional sports leagues have actively embraced gambling on their sports in recent years, and have joined the efforts to profit off of it. Although supposedly insisting that "fantasy sports leagues" be conducted solely for fun and not as gambling vehicles, the professional leagues' express endorsement and maintenance of websites devoted to the practice is a clear wink and a nod, as the gambling nature of all such leagues is widely known and cannot be plausibly denied by the leagues. The Roger Goedell tenure NFL has gone out of its way, in fact, to shed its self-imposed shackles when it comes to gambling "perception." Continuing to enforce and refine its rules requiring teams to fully disclose player injuries long before upcoming games, allowing and encouraging broadcasters and commentators to talk about "point spreads," and to have full segments and shows devoted to "fantasy sports" and fully and completely dropping the long-standing NFL policy that prohibited teams from relocating to Las Vegas (the NFL voted to allow the Raiders to move there to begin play in 2020), makes the NFL's objection to New Jersey's efforts appear weak at best, and an attempt to stifle competition with its own fantasy sports efforts at worst. The NBA and MLB have also moved towards a pro gambling stance, and have gone as far as advocating an approach that would allow states to provide "regulated" sports gambling, rather than none at all.

Of course, predicting how the High Bench will rule based on the questions asked at oral argument is a lot like reading tea leaves, and until the decision is rendered it all remains mere speculation. Nonetheless, as 2017 turns into dust, the "smart money" is probably wagering that the walls of the casino television viewing rooms won't be far behind.


2017 under analysis distribution, LLC. Under analysis is a nationally syndicated column of the Levison Group. Charles Kramer is a principal of the St Louis, Mo based law firm, Riezman Berger, PC. Comments or criticisms about this column can be sent to the Levison Group and Mr. Kramer c/o this newspaper or direct to comments@Levisongroup.com/

Published: Fri, Dec 29, 2017


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