Top 10 questions and answers regarding New Jersey's sports betting US Supreme Court hearing
27 Nov 2017
By Gary Trask
By Gary Trask
On Monday, 4 December, the U.S. Supreme Court will hear arguments on whether the state of New Jersey should be able to legalize sports betting, even though federal law currently bans it in 46 states. The case, dubbed Christie v. National Collegiate Athletic Association, is a battle between New Jersey Governor Chris Christie and the state's Thoroughbred Horsemen's Association versus the NCAA and all four professional sports leagues (NBA, NFL, MLB and NHL). If Christie and the state prevail, not only would it provide an almost immediate green light for Las Vegas-style sports betting inside New Jersey's withering casino venues, but it could also open the door for other states to do the same.
With so many questions about the case in anticipation of Monday's pivotal hearing, we turned to Christopher L. Soriano for some answers. Soriano, who will be in attendance at the hearing on Monday, is a partner in the Cherry Hill, N.J., office of Duane Morris LLP and concentrates his practice in gaming law, where he represents casino operators, gaming equipment manufacturers, iGaming companies, financial institutions and other participants in the gaming industry.
10. How does a Supreme Court oral hearing work, and what exactly will happen on Monday?
The Supreme Court hears oral arguments between October and April, usually hearing two arguments per day on Monday, Tuesday and Wednesday. The arguments are an opportunity for the justices to ask questions directly to the attorneys representing the parties in the case, and for the attorneys to highlight arguments they view as important.
Monday's hearing will begin around 10 a.m. ET and last about one hour. Usually, each side gets 30 minutes, but in this case the federal government has asked permission to argue on behalf of the sports leagues. So, on Monday the state will get 30 minutes, the leagues will get 20 minutes and the solicitor general representing the federal government will get 10 minutes.
All nine justices will hear the arguments, and Soriano said that they typically do not allow a lot of time for discussion or back-and-forth.
"It will be mostly questions from the justices, and the questions will come hard and fast," he said. "You can often watch the arguments and think to yourself, 'Wow, that person has no chance,' but then when the other side has their turn they get peppered just as hard and then you don’t know what to think."
9. How often does the Supreme Court decide to hear oral arguments?
Very rarely, according to Soriano. Of the 7,000 or so cases the Supreme Court gets asked to hear every year, less than 100 are actually selected.
"The fact that they decided to hear this case means that at least four of the nine justices believe there is a question of significant importance on a national level regarding this case," Soriano explained. "But we don't know which four, or if there were more than four."
8. What happens after the hearing? How long until we get a decision?
Bad news for those hoping for a quick result: Once the arguments are over, the case will be taken under advisement and the court will have an internal conference. One of the justices will be assigned to write the opinion, but it may not be released for months.
"It can happen any time between now and the end of June, so my guess is we don't hear anything until March or later because it takes so long to write the opinion," Soriano said. "And they don't give you any indication as to when it will be released. You've just got to watch the blogs and social media on the days when they release opinions and see if it's going to be the day."
7. What are the most likely results?
While Soriano said that it's a "dangerous exercise" to try and predict what the Supreme Court will do in any case, he says that chances are one of the following three things will happen:
1. The court agrees with the 3rd Circuit decision, affirms that the 1992 Professional and Amateur Sports Protection Act (PASPA), which bans sports betting in 46 states, but allows Nevada, Montana, Oregon and Delaware to operate sportsbooks, is constitutional and the full repeal by New Jersey is not permitted. "In this case, you are pretty much stuck with it for a long time," Soriano said. "Once the Supreme Court concludes that a statute is constitutional, they're not going to turn around and change it, so, at this point, if you want expanded sports betting there has to be some legislative change."
2. The court rules that PASPA is constitutional, but New Jersey's partial repeal complies with PASPA. In this case, if other states want to have sports betting, all they will have to do is use a similar partial repeal. "This leads to a situation where it becomes very interesting as to whether sports betting could be regulated in the casinos," Soriano said. "Because if you look at the language of PASPA, it makes it hard for the states to regulate."
3. The court concludes that the entire statute is unconstitutional and needs to be tossed, in which case there would no longer be a federal ban on sports betting. In turn, individual states would do what they want and choose to opt-in or opt-out. Also in under this scenario, Congress could take another shot at a different version of PASPA, or a determination could be made that sports betting is something that should be permitted, but on a federal basis rather than state-by-state. "I don't think that's likely because so much of gambling is state-by-state," Soriano added. "If anything, I think that PASPA just goes away and any state that wants to implement sports betting does it, and the states that don’t want to, don't. It's that simple."
6. Are there any other, more improbable scenarios that could happen?
Soriano said that while the above three results are most probable, there are two wildcards that, while unlikely, are not completely out of the question.
1. The court concludes that PASPA is unconstitutional, but only because it permits sports betting in Nevada, Delaware, Montana and Oregon. "As a result, the court would strike the grandfather provision and now sports betting is illegal in the other four states," Soriano said. "It's a real sleeper. No one is arguing for this, but it's something that the court could do."
2. The Supreme Court decides that it never should have heard arguments in the first place and within a week or two there would be an order that says the decision is dismissed and the 3rd Circuit decision remains law. "This only happens maybe once a year or every two years," Soriano added. "It's rare, but it's on the table. The Supreme Court can do whatever it wants. That's why they're the Supreme Court."
5. In the years since this case began back in 2011, there have been a number of positive developments for legalized sports betting. It has become more and more accepted and embraced by the mainstream media. The city of Las Vegas has landed two professional sports teams. And even though it is a plaintiff in the lawsuit, the NBA and Commissioner Adam Silver have actively called for federally regulated sports betting. Do all of these factors bode well for the state of New Jersey's case on Monday?
While all of the above are music to the ears of those of us who, at long last, want legalized sports betting in the U.S., they will have zero impact on what the Supreme Court decides.
"They may matter for future lobbying efforts and interests, but none of it really matters to the Supreme Court," Soriano said. "People need to understand that the Supreme Court justices are not gaming law experts, they’re constitutional law experts. They're looking at what, if any, implications from a constitutional perspective are at stake here.
"They are not interested in whether or not sports betting is a good thing or a bad thing. They’re not passionate about the issue of sports betting. This is more of a vehicle for them to reexamine the balance of power in the federal state government. All they're looking at is how the ruling they make in this case governs what happens in other cases down the road."
4. If we get the best-case scenario for legalized and regulated sports betting, how soon after the decision is announced will we be able to drive to New Jersey and place a bet?
Gov. Christie is already on record as saying that Monmouth Park would be ready to accept bets "inside a week to 10 days" if the Supreme Court sides with the state, since William Hill has already built a sports bar on the property that resembles a Las Vegas sportsbook. Elsewhere, MGM Resorts International announced earlier this month that it is making plans to begin construction on a $7 million sportsbook at The Borgata Hotel Casino and Spa.
"My guess is that the technology is already in place and a switch could be flipped pretty quickly," Soriano said. "The only thing you would need is an emergency adoption of regulation by the New Jersey Division of Gaming Enforcement, and I'm sure that, given they have been at the forefront of this case, they'll be ready to regulate quickly."
3. And if all of the above transpires, would there be a domino effect with other U.S. states quickly regulating and legalizing sports betting?
In a word, yes.
"I would think within the first year at least 10 more states would follow suit," Soriano predicted. "I could see the more mature gaming jurisdictions like Pennsylvania, New York, Louisiana and Mississippi, to name a few, moving quickly. And even though California is tribal, it could also happen there pretty quickly because everyone knows there are a lot of potential customers there."
2. Will the ruling have any implications on state lotteries and could it also pave the way for online sports betting?
If the result is that there is no federal prohibition on sports betting, states that have lotteries but not casinos could very likely offer sports bets through the lottery.
"With no PASPA, states are free to do whatever they want, so if they wanted to do lottery sports betting they would be free to do so," Soriano said.
As for online sports betting, Soriano warns that would be a bit more complicated because of the Federal Wire Act.
"It’s an interesting question," he said. "There's one school of thought that says on an inter-state basis it's OK to place to place wagers online right now, like what is done in Nevada. The other school of thought is that doing it online is still a violation of the Federal Wire Act, and perhaps UIGEA, and would probably require some more study. My guess is that a lot of operators would study it very carefully before going that route."
1. OK, any predictions on what happens?
As much as he would like to try an peer into his crystal ball, get inside the Supreme Court's head and forecast what will happen, Soriano said it's "impossible to handicap" what will transpire.
"I don't dare to make any predictions right now," he said with a shrug. "Maybe try me again after the arguments are made. Then I might be more willing to make a prediction depending on what I see and hear, but right now I'm not willing to make a guess. Until something is written in ink on formal Supreme Court opinion paper, anything we do now is a complete guessing game.
"But I will say this: There are at least four justices who are interested enough in the case to make it worth hearing because they thought something wasn't quite right with the lower court's decision. That's a fact, but that's as far as you can go at this point."