By Brian Tuohy
Think the Yankees have a favorable pitching matchup tonight? Certain Brazil is going to win the World Cup? Feel confident of the Seahawks repeating in the NFC, or the Bengals rising in the AFC, maybe even winning the Super Bowl? Unless you're standing in the state of Nevada, you cannot legally put your money where your mouth is, on any of these propositions. After Monday's refusal by the Supreme Court to hear New Jersey's case to legalize sports gambling, the question remains: Will it always be this way?
In November 2011, the people of New Jersey authorized Governor Chris Christie to legalize state-sponsored sports gambling at the state's 12 casinos and four horseracing tracks. Before a single bet could be placed, the NCAA and all four major sports leagues -- the NFL, NBA, NHL and MLB -- sued the state under the authority granted in the 1992 Professional and Amateur Sports Protection Act (PASPA). This federal law prevents the spread of sports gambling to states outside of those grandfathered in when it was passed: Nevada, Delaware, Oregon and Montana. It also deputized the sports leagues to defend PASPA in court when threatened, as in this case.
With the sports leagues actively suing any state that has defied PASPA, the law has held strong. In a March 2013 decision, U.S. District Judge Michael Shipp ruled in favor of the sports leagues, offering New Jersey a sole recommendation: If the state wants legalized sports gambling, get Congress to repeal or amend PASPA. New Jersey swiftly appealed.
Six months later, the Third Circuit Court of Appeals also sided with the sports leagues, but it was a 2-1 split decision, with Judge Thomas Vanaskie dissenting. Though he mostly agreed with the majority ruling, Judge Vanaskie wrote in his minority opinion, "PASPA attempts to implement federal policy by telling the states that they may not regulate an otherwise unregulated activity. The Constitution affords Congress no such power." With a perceived opening and plenty of gripes, New Jersey took the final step, asking the Supreme Court to take its case. On Monday, the Supreme Court said no.
The funny thing is, New Jersey had many chances to legalize sports gambling over the years. The state was given a one-year exemption to legalize it after PASPA was enacted, but its voters refused to do so. Now that the sports and gambling landscapes have changed dramatically, exploding in both popularity and revenue over the past 20 years, New Jersey voters understandably want in on the action.
New Jersey's loss does not mean the pursuit of legalized sports gambling in the U.S. is at an end. The chance that the Supreme Court would hear this appeal was always slim, considering that only about 75 cases are heard out of some 10,000 petitions made each year. Some pundits believed that the case's high profile gave it an edge, given the heavy hitters involved -- Gov. Christie, the four major sports leagues, the NCAA, the Department of Justice -- plus two former U.S. Solicitor Generals, Theodore B. Olson and Paul Clement, pitted against each other. On the other hand, New Jersey's petition had one significant problem: No other court had ever ruled against PASPA. In essence, there was no argument for the Justices to resolve.
Should some other state decide to take on PASPA, the legal footing may shift. California officials were watching this case closely, and if California files a similar lawsuit, it may prevail in the Ninth Circuit where New Jersey failed in the Third. That would give Supreme Court a true argument to decide, with conflicting rulings in two different Circuit Courts. In that scenario, the sports leagues undoubtedly would get nervous, as the attacks against PASPA are diverse. Some view the law as unconstitutional, trampling on States' rights as enumerated in the 10th Amendment (to oversimplify the matter). At the same time, PASPA granted Nevada a virtual monopoly on sports gambling in the US -- something unprecedented in a federal law -- from which the state (and Las Vegas in particular) has benefited.
There's also an argument as to the need to maintain the prohibition on sports gambling in the first place. It's legal in the UK and many other countries around the world, yet the dominant U.S. sports leagues have used their political power to convince Congress that sports gambling -- if made legal -- would destroy their all-important "integrity" -- an argument that's spurious at best.
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If PASPA is ever overturned, the sports landscape will be altered forever. As other states legalize sports gambling, a domino effect could open up the entire country -- a sports book on every block. An estimated $380 billion, if not $500 billion, already is wagered on sports every year, illegally in the U.S., with the vast majority of that money ending up in the hands of organized crime. The Supreme Court's decision not to hear New Jersey's appeal essentially strengthens the mob, just as the "War on Drugs" enriches gangs in cities across America. With PASPA's repeal, these hundreds of billions of dollars would be monitored, regulated and taxed, all to the general public's benefit.
Most within the gambling industry want this to occur. Illegal bookies, like their brethren in the legal sports books, desire regulation. Their customers would feel much safer if they weren't involved in a criminal activity. At the same time, legalization would eliminate the credit problem many gamblers face, by making bettors pay at the window every time they want to bet. Gone would be the need to settle up with "your man" come Tuesday, and much of the loan sharking that goes along with illegal gambling would disappear. This in turn would increase business for the bookie -- who'd now be a legitimate, licensed businessman -- while protecting the customer at the same time. A true win-win.
Legalization also would bring a new level of oversight to our sports. Currently, only Las Vegas monitors sports gambling in the U.S., but Nevada accounts for only one percent of our sports gambling. Not that fixed games necessarily will crop up every week after legalization, but the leagues could not remain silent and keep game-fixing investigations out of the media, as they currently do.
Sports media coverage would change overnight, too. Most mainstream outlets already mention or even discuss the betting lines on games. Online, the Sporting News has "The Linemakers," CBS Sports publishes both the money line and the over/under line on current MLB games within their "Gametracker," and ESPN offers "Behind the Bets." These outlets and many more actively discuss something that's an illegal activity for nearly all of their readers. The NFL mandates that lines are not even mentioned during its games, but how long would ESPN maintain this semi-silence if sports gambling was legal? Would every pregame show quickly offer an updated version of Jimmy the Greek? Would betting lines and odds run in the crawl along the bottom of your TV screen during every game?
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Despite the Supreme Court's decision, New Jersey isn't quite finished. The state has one option remaining -- a nuclear option. It could basically declare anarchy.
With PASPA continuing to stand, New Jersey has threatened to declare sports gambling legal, while not directly sanctioning any of it. In other words, anyone -- casino, horse track, laundromat -- could offer sports gambling, only there would be absolutely no regulation over it. That would open up a huge legal can of worms, but there's little chance the NFL or NCAA could prevent its implementation prior to the start of the next football season, exactly when New Jersey claims fans will be able to bet on games, just in time for the Giants' first kickoff.
For its part, the Department of Justice's position is that it will not stop states from offering sports gambling, so New Jersey could still win in the end. If the state takes that defiant position and other states join in, it could become a tidal wave of change that the major U.S. sports leagues could not stop. If that happens, the entire complexion of sports in America could change.
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Brian Tuohy has been called America's leading sports conspiracy theorist, but really he's just highly skeptical when it comes to what the sports leagues tell their fans. He's also one of the few writers brave enough to tackle the topic of game fixing in sports, detailing evidence of it in his books Larceny Games: Sports Gambling, Game Fixing and the FBI and The Fix Is In: The Showbiz Manipulations of the NFL, MLB, NBA, NHL and NASCAR. He also runs the semi-popular website thefixisin.net.