Tuesday, October 21, 2014

Leagues Seek Injunction Against NJ Sports Betting

Earlier today, the four major professional sports leagues and the NCAA opened up a second front in their latest legal campaign against sports betting in New Jersey. The leagues had filed suit on Monday in response to the enactment of Senate Bill 2460, the new law signed by Governor Christie partially repealing the state-law ban against sports betting (but only for casinos and racetracks). As I predicted, the leagues have now filed a motion for a temporary restraining order and preliminary injunction designed to prevent Monmouth Park Racetrack from proceeding with its previously-announced plans to offer sports wagering to its patrons beginning this Sunday (in reliance on that new law).

In short, the leagues are seeking two basic forms of relief: (1) a temporary restraining order to maintain the status quo (e.g., no sports betting anywhere in New Jersey) pending a determination on the merits of the leagues' motion for a preliminary injunction; and (2) following a hearing, the entry of a preliminary injunction enjoining all of the New Jersey defendants (e.g., Governor Christie, the NJ Division of Gaming Enforcement, the NJ Racing Commission, the NJ Thoroughbred Horsemen's Authority, and the NJ Sports and Exposition Authority) from "sponsoring, operating, advertising, promoting, licensing, authorizing, or otherwise permitting" sports wagering in any Atlantic City casino or any racetrack during the pendency of the action (in other words, until the case is over).

With apologies (but no royalties) to hockey columnist extraordinaire Elliotte Friedman, here are my 12 preliminary thoughts on today's court filing and how it may play out:
  1. What is the difference between a "temporary restraining order and a "preliminary injunction"? A temporary restraining order preserves the status quo until a preliminary injunction hearing can be held, while a preliminary injunction preserves the status quo pending a full trial on the merits. In other words, the temporary restraining order is issued first and remains in effect through the preliminary injunction hearing, and then would be replaced by a preliminary injunction (or not).
  2. What must the leagues prove in order to obtain either a temporary restraining order or preliminary injunction? The requirements are the same for each. The leagues must show at a minimum that: (a) they have a "reasonable probability of success" on the merits; (b) they will suffer "irreparable harm" if the request for preliminary relief is denied; (c) that granting preliminary relief will not result in even greater harm to the nonmoving party; and (d) that the "public interest" favors such relief.
  3. The leagues will have very little trouble proving the last three elements. As I explained in an earlier post, Judge Shipp previously addressed the elements of irreparable harm, the balancing of the harms, and the public interest when he entered a permanent injunction against New Jersey in February 2013. As to each element, he sided with the leagues (decisively so), and will likely do so again.
  4. The leagues' entitlement to a preliminary injunction will thus come down to whether they can establish a "reasonable probability of success on the merits," since each of the other elements required for an injunction (e.g., irreparable harm, balancing of the harms, and the public interest) will almost assuredly be decided in the leagues' favor based on Judge Shipp's prior rulings. "Probability of success on the merits" means that the moving party must show a "fair chance" of success on the merits.
  5. There is an expedited briefing schedule. Judge Shipp has ordered the New Jersey defendants to file a response to the motion by October 22nd, and the leagues must file their reply brief one day later. The motion will thus be fully briefed by Thursday.
  6. Judge Shipp has not yet decided whether he will hear oral argument on the leagues' motion. A docket notation entered on PACER states that "[f]ollowing review of the papers, the Court will advise as to whether it will hear oral argument on the application. If the Court elects to hear oral argument on the application, it will issue a text order that sets forth the date and time of the oral argument."
  7. The decision on oral argument will be made on Thursday. Based on his history in this case, I expect Judge Shipp to conduct a hearing on the leagues' motion. Virtually every important motion in this case, including the recently-withdrawn motion for clarification and/or modification of the existing injunction, was scheduled for oral argument. But the Court is not required to hold oral argument. Hearings are required on motions for preliminary injunctions only when there are disputed factual issues. But if the material facts are not in dispute, then a hearing is not required. 
  8. Look for Judge Shipp to schedule two types of hearings. He will likely schedule oral argument for this Friday on the issue of whether a temporary restraining order should be entered. That order will probably come down on Thursday. Judge Shipp will likely also schedule a second hearing -- probably for mid-November -- on whether a preliminary injunction for the duration of the case should be entered.
  9. Judge Shipp will likely issue a temporary restraining order on Friday (following oral argument) for the purpose of preserving the status quo until the motion for preliminary injunction can be heard in mid-November (or perhaps later). This means there will be no sports betting at Monmouth Park Racetrack on Sunday, or at any time thereafter until the court decides the preliminary injunction motion.
  10. I love how the leagues refer to sports betting in their legal papers as "sports gambling" in an effort to make it sound more sinister and nefarious. 
  11. John Brennan trivia. There are 24 exhibits to the leagues' motion, and John Brennan (the sports business reporter for The Bergen Record and the editor of the awesome Meadowlands Matters blog) is the author of the three of those exhibits.
  12. I am not very good at math. In an ESPN.com article, I was quoted as saying that Monmouth Park Racetrack has a "zero percent chance" of taking sports bets on Sunday. One of my Twitter followers (up to 413!) advised me to "stay away from options trading [since] nothing is ever 0% or 100% probability in a marketplace."
I will have more thoughts on the leagues' motion on Wednesday. Got a late start tonight.

Monday, October 20, 2014

Leagues Move to Block NJ Sports Betting; Injunction Likely

As I predicted correctly (for the most part) over the weekend, the four major professional sports leagues and the NCAA responded on Monday to New Jersey's latest effort to bring legal sports betting to the Garden State. On Friday, New Jersey Governor Chris Christie signed legislation partially repealing the state-law prohibition against sports betting (but only for casinos and racetracks), thereby paving the way for deregulated (and legal) sports betting to commence on October 26th at Monmouth Park Racetrack. In a post on Saturday, I predicted that the leagues would fight back. And fight back they did. But, instead of moving for a preliminary injunction in the existing federal court action (which is what I predicted would occur), the leagues opted to file a brand new lawsuit in the same court. I suspect that the leagues went this route because the New Jersey Sports and Exposition Authority (the alleged owner of Monmouth Park Racetrack, where sports betting is slated to start this Sunday) was not a party to the prior lawsuit. Thus, a new lawsuit was needed to properly exercise jurisdiction over Monmouth Park Racetrack.

Accusing New Jersey of acting "in defiance of this Court's February 28, 2013 Order and in clear violation of federal law," the leagues take direct aim at the "label" used by New Jersey in describing the new law. The leagues assert that while the new law is "styled as a repeal," in reality, it "is nothing more than a de facto authorization of sports gambling," pointing to the fact that the repeal is limited to state-licensed casinos and state-licensed racetracks, which remain subject to extensive regulation by the State. Therefore, despite its facial "repeal" language, the leagues argue that the new law "is a blatant attempt to by the State to sponsor, operate, advertise, promote, license, and/or authorize sports gambling in Atlantic City casinos and New Jersey racetracks," in violation of PASPA. Alternatively, the leagues argue that even if the new law "is really nothing more than the 'repeal' that it purports to be," then it violates the New Jersey Constitution, which requires any gambling to be "specifically authorized" by the New Jersey Legislature. By definition, a "repeal" of a ban on sports wagering is not an "authorization" of same.

Even though the Complaint asks for an injunction, the leagues would still need to file a motion for a preliminary injunction in order to prevent Monmouth Park Racetrack from proceeding with its plans to offer sports betting on Sunday. A complaint, by itself, would not accomplish that in the short term. In federal court, defendants are given 21 days to answer a complaint. By the time Governor Christie and the other New Jersey defendants get around to responding to the complaint, sports betting will have already started at Monmouth Park and it may then be too late to put the genie back in the bottle. Therefore, the leagues would need to file a formal request for judicial intervention (which lawyers call a "motion") in order to put an immediate halt to those plans. Specifically, I expect the leagues to file an emergency motion for a temporary restraining order and/or preliminary injunction within the next day or two. The leagues will ask Judge Shipp (to whom both cases are assigned) to enter a temporary restraining order immediately and on an ex parte basis in order to prevent Monmouth Park from commencing its sports betting operation on Sunday. The temporary restraining order would essentially maintain the status quo (e.g., no sports betting in New Jersey) until such time as the court can conduct a hearing on the motion for preliminary injunction (which would probably be in mid-to-late November). I expect Judge Shipp to sign such an order later this week, which would prevent Monmouth Park from offering any sports betting, effective immediately.

The leagues would likely find Judge Shipp to be a very receptive audience since he previously ruled in their favor. Moreover, Judge Shipp made several rulings earlier in the case that are likely to influence any new ruling. For example, in his February 28, 2013 order granting summary judgment in favor of the leagues and permanently enjoining New Jersey from implementing its sports betting law, Judge Shipp held that the leagues would suffer "irreparable harm" in the form of a "reputational injury" through the unwanted association with gambling and from fans' negative perceptions that the outcomes of games may be rigged. In that same ruling, he also held that there was an "inadequate remedy at law" because New Jersey, by operation of the Eleventh Amendment, would not be liable for monetary damages. Judge Shipp also held that the entry of a permanent injunction against New Jersey would serve the "public interest." Each of these prior findings would bear directly on any new motion for preliminary injunction filed by the leagues since the same considerations are at play. Since Judge Shipp has already ruled in the leagues' favor on these issues, I would expect him to do so again. Thus, the leagues' entitlement to a preliminary injunction will likely come down to whether they can establish a "probability of success on the merits," since each of the other elements required for an injunction (e.g., irreparable harm, balancing of the harms, and the public interest) will almost assuredly be decided in the leagues' favor based on Judge Shipp's prior rulings.

Saturday, October 18, 2014

Not So Fast on NJ Sports Betting; Injunction Hearing Looms

With yesterday's bombshell announcement that New Jersey Governor Chris Christie signed legislation partially repealing the state-law prohibition against sports wagering and also withdrew his federal court motion seeking to clarify the existing injunction, many are trumpeting the arrival of legal sports betting in New Jersey. But not so fast. While Monmouth Park Racetrack is making plans to launch sports wagering beginning on October 26th, Atlantic City's casinos are wisely taking a "wait-and-see" approach. And for good reason too, as legal sports betting in New Jersey remains a long shot despite Governor Christie's headline-grabbing move yesterday. I expect the sports leagues and the DOJ to counter New Jersey's surprise move by dropping a bombshell of their own next week: they will likely file an emergency motion for an ex parte temporary restraining order prohibiting Monmouth Park and any other licensed racetrack or casino from offering sports betting. As part of that request, the leagues and the DOJ will also ask the federal court judge (Michael A. Shipp) to schedule a hearing on a motion for preliminary injunction.

Expect the leagues and the DOJ to argue that New Jersey's partial repeal (which is limited solely to casinos and racetracks) runs afoul of the Professional and Amateur Sports Protection Act ("PASPA"), which prohibits States from "sponsoring, licensing or authorizing" sports wagering, because casinos and racetracks require licenses to operate in New Jersey and are heavily regulated by the State. Thus, as the DOJ argued in their response to New Jersey's motion last month, "[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."

The leagues and the NCAA raised similar concerns in response to New Jersey's recent motion, stating:
[V]irtually every detail concerning the operation of casinos and racetracks is heavily regulated by both State law and by regulations promulgated by the [Division of Gaming Enforcement] and Racing Commission. For example, State regulations upon casinos and racetracks include licensing and permitting requirements (e.g., N.J. Stat. Ann. ss 5:5-32 & 5:12-96), specifications on equipment used for gambling (id., ss 5:5-63; 5:12-100), and payment to the State of a portion of revenue derived from casino and racetrack wagering (id., ss 5:5-48; 5:12-144).
According to defendants, all of these regulations will apply equally to sports wagering [under a partial repeal]. In other words, in their view, this Court's injunction leaves New Jersey free to accomplish precisely what the Sports Wagering Law was enacted to achieve: state-regulated sports wagering in casinos and racetracks. Not only is that result flatly inconsistent with this Court's injunction; it is flatly inconsistent with PASPA. PASPA does not prohibit States from repealing existing prohibitions ad "complete[ly] deregulating" sports wagering. [citation omitted]. But it does prohibit States from simply labeling something a "repeal" that is plainly, in substance, authorization and regulation of sports gambling. Accordingly, defendants' latest arguments are nothing more than a blatant attempt to circumvent the Court's injunction and the federal law that it prohibits defendants from violating.
(Leagues' Response, at pp. 12-13)

The leagues and the DOJ make a fair point about New Jersey's partial repeal being a "back-door" licensing and regulation of sports betting. Think about it. What do you think would happen if the sports book of a New Jersey casino or racetrack accepted "prohibited wagers," such as wagers from persons under the age of 21 or wagers on contests involving New Jersey collegiate sports teams, both of which are prohibited under the new law. They would be prosecuted, of course, by New Jersey law enforcement authorities. But don't think for one second that New Jersey gaming regulators (such as the Division of Gaming Enforcement) wouldn't also take a hard look at such illegal activity. A casino and racetrack that accepted illegal sports bets could very well find its license suspended, revoked or non-renewed, and also be subjected to substantial fines. Consider what might also occur if a New Jersey casino or racetrack accepted sports wagers from convicted felons or failed to honor winning wagers. Their State-issued license would be in serious jeopardy. Thus, a persuasive argument can be made that, even under a partial repeal, New Jersey would still be able to "regulate" the sports wagering activities of casinos and racetracks.

And what about the revenues attributable to sports wagering? Under existing law, New Jersey's casinos are required to pay the state 8% of gross gaming revenues (GGR)? Would revenues from sports wagers be included in GGR? If they are included, the state would be "taxing" the sports wagering activities of its licensed casinos, which could be viewed as a violation of PASPA. But even if New Jersey did not directly tax sports wagering revenues, it would still "indirectly" tax sports betting by virtue of the fact that the presence of sports books at casinos and racetracks would attract additional patrons who would wager on casino games or horse races, thereby increasing both GGR and the tax payments thereon. Either way, the State would reap a substantial monetary benefit from "unregulated" sports wagering, which might very well place its recent legislative action in the cross-hairs of PASPA.

And has anyone considered the Wire Act as a possible surprise argument by the leagues and the DOJ? The Wire Act prohibits the use of a "wire communication facility for the transmission in interstate or foreign commerce of bets or wagers on any sporting event or contest." 18 U.S.C. s 1084(a). Sports books, such as those operating in Nevada (and possibly Monmouth Park), use computerized bookmaking services and communications technology to handle their sports bets. Could the use of such technology by Monmouth Park or another New Jersey gaming operator trigger the Wire Act? Possibly. Remember, the Third Circuit has already concluded that sports wagering "substantially affects interstate commerce." It will be interesting to see if the leagues invoke the Wire Act next week as part of their expected assault on Monmouth Park's plans to offer sports betting beginning October 26th.

Several people have asked me whether Monmouth Park, a private entity (although the leagues would dispute that), is beyond the reach of PASPA. Since PASPA prohibits state-sponsored sports betting, their reasoning is that private persons are not covered by PASPA. But that overlooks Section 3702(2) of PASPA, which prohibits private parties from conducting sports wagering "pursuant to the law or compact of a governmental entity." The leagues would argue that Monmouth Park's operation of a sports books is "pursuant to the law" signed by Governor Christie on Friday. The leagues are also expected to argue that Monmouth Park is a "state governmental entity' (and thus subject to PASPA) because it is owned and operated by the New Jersey Sports and Exposition Authority ("NJSEA"). Thus, based on the state's alleged ownership of Monmouth Park, the Leagues would argue that any sports wagering conducted at Monmouth Park "would violate the provisions of PASPA that prohibit a State from directly sponsoring, operating, or advertising sports wagering." However, New Jersey officials are expected to dispute that characterization, claiming that the NJSEA only owns the land, but does not operate the racetrack.

PREDICTION: At some point between October 20th and October 24th, the leagues and the DOJ will file an emergency motion for an ex parte temporary restraining order seeking to block Monmouth Park Racetrack from offering sports betting. The motion will be filed on an "emergency" basis because Monmouth Park has announced that it will offer sports betting beginning October 26th, which is one week away. The leagues and DOJ thus need to file their motion this week to have any realistic chance of blocking Monmouth Park from offering sports betting beginning next Sunday. Any delay in filing this motion could expose the leagues and the DOJ to the argument that they have "waived" the right to claim an "irreparable injury" (one of the requirements for a temporary restraining order and/or preliminary injunction). Thus, it would be a shocker if the leagues and the DOJ did not act quickly on this, such as by filing their motion on Monday or Tuesday. As part of their emergency motion, I expect the leagues and DOJ to also ask for a preliminary injunction prohibiting all New Jersey casinos and racetracks from conducting sports wagering. Judge Shipp will likely issue the temporary restraining order later this week, and schedule a hearing on the preliminary injunction for November (possibly the same November 21st date that was already slotted for the hearing on New Jersey's now-withdrawn motion for clarification and/or modification of the injunction).

Things are about to get real interesting in New Jersey!

Tuesday, September 30, 2014

DOJ Argues No Such Thing as "Unregulated" Sports Betting Since Casinos & Racetracks Still Subject to Licensing Requirements; Backtracks on Prior Statements that NJ Free to Repeal Ban

Late last night, the United States Department of Justice filed its memorandum in opposition to New Jersey's motion to clarify and/or modify the federal court injunction prohibiting it from authorizing 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 significant 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 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 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 statement 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 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 deigned to address). The DOJ contends 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.

Monday, September 29, 2014

Leagues Push Back on NJ's Latest Sports Betting Gambit: Call Such Efforts a "Blatant Violation" of Federal Court Injunction

In a post two weeks ago, I analyzed Governor Christie's latest strategy for bringing single-game sports betting to the Garden State: by arguing in a federal court motion that the state-law prohibitions against sports wagering have already been repealed through the enactment of the New Jersey Sports Wagering Law, even though that legislation was found by two different federal courts to be preempted by the Professional and Amateur Sports Protection Act. ("PASPA"). Governor Christie had argued, I maintain unconvincingly, that the portion of the legislation allowing casinos and racetracks to "operate sports pools" could be "severed" from the portion of the law authorizing the state to "license" sports betting (the part found to be in express conflict with PASPA).

Earlier today, the four major professional sports leagues and the NCAA filed their joint response in opposition to Governor Christie's motion. The Preliminary Statement wastes no time laying waste to the Governor's main guments. Here are some of the highlights:
  • "This motion reflects defendants' latest unlawful attempt to authorize sports wagering in New Jersey's casinos and racetracks."
  • "Contrary to this Court's decision and defendants' prior position -- as well as to the very words of the Sports Wagering Law itself -- the Governor takes the astounding position that, in providing that casinos and racetracks 'may operate a sports pool," the Sports Wagering Law does not 'authorize' sports wagering, but simply repeals the State's existing prohibition on sports wagering. This despite the fact that throughout the litigation, defendants consistently asserted that the Sports Wagering Law authorized casinos and racetracks to operate sports wagering games."
  • "Moreover, even in their current motion, defendants expressly acknowledge that sports pools operated by racetracks and casinos pursuant to the Sports Wagering Law would be subject to all of the laws and regulations that apply to those venues, including the extensive legislation and licensing and regulatory scheme addressing gambling in New Jersey's Casino Control Act, N.J. Stat. Ann. s 5:12-1 et seq. In other words, this Court's injunction has no practical effect whatsoever on New Jersey's ability to accomplish precisely what PASPA prohibits.
In the main portion of their opposition brief, the Leagues characterize New Jersey's implied repeal argument as both "improper" and "disingenuous," pointing to the plain language of the Sports Wagering Law, the two court rulings, statements made in the defendants' prior court filings, and the recent unsuccessful legislative repeal efforts:
  • "The plain language of the Sports Wagering Law readily refutes defendants' new reading, as the phrase 'may operate' is as clear an authorization as one could imagine. In fact, both this Court and the Third Circuit have recognized that the Sports Wagering Law is an attempt to authorize sports gambling, not to 'repeal' existing prohibitions.
  • "So, too, have defendants, who repeatedly represented--including throughout this litigation--that the Sports Wagering Law does in fact seek to authorize sports gambling.
  • "Immediately after this litigation (seemingly) concluded, the State Legislature attempted to enact legislation that purported to repeal sports wagering prohibitions at casinos and racetracks--legislation that would have been wholly unnecessary had the Sports Wagering Law accomplished that end."
On the related issue of "severability," the Leagues argue that the defendants' attempt to sever only five words ("may operate a sports pool") from the Sports Wagering Law's authorization of sports wagering "utterly misconstrues" the doctrine of severability. As the Leagues explain in their joint response, "[t]he critical inquiry for severability is legislative intent, which 'must be determined on the basis of whether the objectionable feature of the statute can be excised without principal impairment of the principal object of the statute.'" 

The Leagues argue that the legislative intent behind the Sports Wagering Law was to enact a "licensing regime" that would shift illegal economic activity into legal channels where it could be monitored, regulated and appropriately taxed. They point to the 2010 public hearings during which legislators "expressed a desire to 'stanch the sports-wagering black market flourishing within New Jerseys borders.'" And, as icing on the cake, the leagues quote directly from a Third Circuit brief filed by two New Jersey legislators (Stephen M. Sweeney and Sheila Oliver) in which they stated that unregulated sports betting "would be contrary to the considered judgment of the Legislature and the expressed desire of their constituents." Based on the foregoing, the Leagues conclude that "Defendants--and this Court--cannot, consistent with legislative intent underlying the Sports Wagering Law, sever the law's provision authorizing casinos and racetracks to operate sports gambling from its requirements that any sports gambling in New Jersey (i) be authorized and approved by the [state regulators]; and (ii) conform to the licensing requirements of the Casino Control Act and the regulations promulgated thereunder."

The Leagues also take issue with the notion that there can ever be such a thing as "unregulated" sports betting at New Jersey's casinos and racetracks, since they would still remain subject to an extensive licensing and regulatory regime in New Jersey (whether there is sports betting or not). Indeed, the Leagues stress, "virtually every detail concerning the operation of casinos and racetracks is heavily regulated by both State law and by regulations promulgated by the DGE and Racing Commission." For example, State regulations upon casinos and racetracks include licensing and permitting requirements, specifications on equipment used for gambling, and payment to the State of a portion of revenue derived from casino and racetrack wagering. As the Leagues point out, even the defendants have stated that these requirements "will apply equally to sports wagering if the provision of the Sports Wagering Law providing that casinos and racetracks 'may operate a sports pool' is reinstated. Thus, the Leagues argue that this would leave New Jersey "free to accomplish precisely what the Sports Wagering Law was enacted to achieve: state-regulated sports wagering in casinos and racetracks," adding that "[n]ot only is [such a] result flatly inconsistent with this Court's injection, it is flatly inconsistent with PASPA." 

Finally, the Leagues argue that, under no circumstances, could sports wagering be conducted at Monmouth Park or at the Meadowlands because those two racetracks are owned and operated by the New Jersey Sports and Exposition Authority, a state governmental entity. Based on the state's ownership of those racetracks, the Leagues contend any sports wagering conducted at either the Monmouth Park or at the Meadowlands "would violate the provisions of PASPA that prohibit a State from directly sponsoring, operating, or advertising sports wagering, regardless of whether those facilities purport to offer gambling pursuant to a state authorization or a state repeal."

As of the this writing, the Department of Justice has not yet filed its response brief. But if past practice is any indication, I would expect the DOJ to file a response shortly (i.e., before midnight tonight)

New Jersey is now on the clock, with its Reply Brief due on October 10.

Monday, September 22, 2014

Daniel Wallach Interviewed on Ray Rice Investigation

Becker & Poliakoff sports litigator Daniel Wallach made several radio appearances last week to provide legal commentary and analysis on the Ray Rice controversy. Dan appeared on WTOP 103.5 FM (Washington, DC), SportsNet 590 (Toronto), The Big 920 (Milwaukee, WI), The Big 170 (Madison, WI) and KRXO (Oklahoma City, OK) to discuss Ray Rice's legal options in the wake of his recent suspension by the National Football League. Dan also weighed in on the NFL's investigation of the controversy, Roger Goodell's future as NFL Commissioner, and what to expect from the upcoming independent investigation. You can listen to Dan's interviews here and here.

Wednesday, September 17, 2014

Daniel Wallach Interviewed About Adrian Peterson Controversy

Becker & Poliakoff sports litigator Daniel Wallach was interviewed by KWSN Sports Radio to discuss the legal aspects of the Adrian Peterson child abuse case and what it may mean for his future in the National Football League. Dan analyzed the criminal charges brought against Peterson and offered insights into the unique "parental justification" defense available under Texas law. Dan also explained why Adrian Peterson may have played his last game for the Minnesota Vikings. You can listen to the full interview here.