Jonathan Wood

With the U.S. Supreme Court's recent decision to review New Jersey’s sports betting case, the state has finally reached the metaphorical Super Bowl in its years-long effort to legalize sports betting. New Jersey has been trying to reform its own outdated sports betting laws that its citizens no longer want. These laws have harmed the state’s economy and have created a large black market. But a little-known federal law has repeatedly frustrated the state’s effort to get rid of the state's old laws.

In 2011, New Jersey voters decided—by a lopsided margin of nearly 2 to 1—to amend their state constitution to encourage the Legislature to pursue sports betting reform. For good reason, prohibitions haven’t worked. Instead, they have created a massive black market with more than $100 billion pouring into illegal operations.



Even former President Barack Obama has bragged about violating these arcane laws, during an appearance on “The Late Show with Stephen Colbert.” When the host pointed out that sports betting is illegal, Obama laughed it off, explaining that, as president, he would just pardon himself.



The Professional and Amateur Sports Protection Act, the federal law at issue in New Jersey’s case, does not forbid sports betting as a matter of federal law. Instead, PASPA forbids states from authorizing sports betting, which federal courts have interpreted to force New Jersey and other states to maintain their preexisting bans.



Since 2011, New Jersey has been trying to reform its laws but has been stymied by PASPA at every turn. First, it replaced its prohibitions with state licensing and regulation, only to have the Third Circuit strike down that reform and the Supreme Court to decline review. Its second effort to reform its laws, the reform that the Supreme Court will now review, partially repeals the state’s own prohibitions.



Although the stakes for New Jersey are huge, they’re even bigger for the Constitution. A loss for New Jersey would fundamentally change the relationship between the states and the federal government. One of the Constitution’s most venerable principles is federalism, which divides power between two levels of government – state and federal – to counteract each other and ensure that neither becomes so powerful that they threaten individual liberty.



To maintain that balance, the Supreme Court has held that the federal government cannot dictate that states implement particular policies; it cannot “commandeer” them, as the court put it. The Third Circuit’s decision upholding PASPA undermines that core constitutional protection by drawing a facile distinction between the federal government forcing a state to implement a policy in the first instance and forcing a state to maintain a policy that it has previously implemented, even if the state subsequently rejects the policy.



That unprecedented exception to the Supreme Court’s commandeering cases threatens to undermine a wide variety of laws. On many issues, the federal government and states work together through a practice known as cooperative federalism. This voluntary arrangement allows Congress to pursue its goals more efficiently and cheaper and, because states must be induced to participate, it gives them influence in how federal policies are set. But what state would participate if, once it initially agreed to a policy, Congress could pass a law binding it to the federal policy forever?



A Supreme Court decision upholding PASPA would also be a threat to political accountability. If federal officials can force states to implement unpopular policies, they can escape political accountability for their decisions. Voters will understandably blame state officials for unpopular, costly, or boneheaded policies enacted and enforced by them, not realizing that, like New Jersey with its gambling laws, states are powerless to change anything.



Although it's difficult to handicap Supreme Court cases, there are significant signs that New Jersey is the favorite. Earlier this year, before Justice Neil Gorsuch was confirmed, the court asked the Trump administration to weigh in on the case, a move that required at least four justices to express interest in the case. Their interest was apparently not muted by the administration asking the court not to take the case, as at least four justices voted to grant it anyway. With four justices already interested, if Justice Gorsuch is as committed to federalism as he is widely expected to be, this case could end up being a big win for both New Jersey and the Constitution.



Jonathan Wood is an attorney at the Pacific Legal Foundation who authored a brief supporting New Jersey’s petition on behalf of several libertarian-leaning nonprofit groups.