NJ argues constitutionality of sports betting ban

TRENTON, N.J. (AP) -- State sovereignty, not point spreads, took center stage Thursday as lawyers for New Jersey and the Department of Justice sparred over the constitutionality of a 21-year-old federal law prohibiting all but four states from allowing legal sports betting.

At stake is New Jersey's attempt to revive its casino and horse racing industries by grabbing a piece of what is considered a multibillion-dollar sports wagering pie — not to mention stanching the flow of gamblers and dollars to Nevada casinos where sports betting is legal.

Thursday's arguments before U.S. District Judge Michael Shipp likely are far from the last in the lawsuit filed last year by the four major pro sports leagues and the NCAA to stop New Jersey from allowing sports betting. Shipp said he would rule within two weeks, but it is almost a certainty the case will go to the 3rd U.S. Circuit Court of Appeals and possibly to the Supreme Court.

New Jersey has attacked the 1992 Professional and Amateur Sports Protection Act, or PASPA, on several constitutional levels. In filings, the state has argued the law unfairly "grandfathered" Nevada and three other states that already have some form of sports gambling. New Jersey said the law violated state sovereignty and equal protection provisions and trampled the authority of state legislatures under the 10th Amendment.

Former U.S. Solicitor General Theodore Olson, representing New Jersey, told Shipp that Congress could have prohibited all sports gambling but instead washed its hands of the responsibility of enforcing a ban.

"The government, through PASPA, has chosen to thrust the unwelcome burden of regulating sports gambling on the states," he said. "If it isn't going to do so, it can't instruct the states not to do it or else abandon it to Nevada or organized crime."

The breadth of court cases cited by both sides during Thursday's arguments strayed far from the sports field: A New Orleans case involving pushcarts, a New York case about toxic waste dumping, even a 1911 case in which the government tried to require that Oklahoma delay moving its state capital as a condition for entrance into the Union.

In the New Jersey case, U.S. Attorney Paul Fishman, representing the Justice Department, said the Constitution empowers Congress to regulate an interstate industry such as sports gambling and to treat states differently, in this case Nevada, Delaware, Montana and Oregon.

PASPA doesn't supersede the authority of state legislatures because it doesn't require any affirmative actions such as enacting laws, said Jeffrey Mishkin, representing the sports leagues. Mishkin added that New Jersey was given a special dispensation by Congress to approve sports gambling at its casinos within a year in the early '90s, but didn't do so.

"So of all the states in the Union, New Jersey has the least basis to complain that it was treated unfairly by Congress," he said.

Olson argued that the landscape has changed since 1992 and that New Jersey's Legislature is merely attempting to stop billions of sports gambling dollars from going to the "permanent monopoly" in Nevada.

New Jersey voters passed a sports betting referendum in 2011, and last year the Legislature enacted a sports betting law that limited bets to the Atlantic City casinos and the state's horse racing tracks. Bets wouldn't be taken on games involving New Jersey colleges or college games played in New Jersey.

Gov. Chris Christie said last year he planned to license sports betting as soon as January, and in October published regulations governing licenses.

Fishman said New Jersey's finances are not the issue.

"I get that," he told the court. "As a taxpayer, in some ways I'm attracted by that. But that's not the point.

"The question is not whether gambling is a good policy choice for New Jersey or that the Legislature didn't act in good faith. It's that Congress and the president decided 20 years ago that the spread of legal gambling on college and professional sports is a bad idea and bad for the country."