The U.S. Department of Justice has joined the dispute over New Jersey’s power to legalize sports wagering at casinos and horse-racing tracks.
The DOJ on Tuesday intervened in a suit by the National Collegiate Athletic Association and four major sports leagues that seeks to strike down New Jersey’s law as an encroachment on federal authority.
The action came in response to N.J. Attorney General Jeffrey Chiesa’s filing of a notice of constitutional question in the case, NCAA v. Christie, 12-cv-4947, pending in federal court in Trenton.
U.S. District Judge Michael Shipp certified the question and gave notice to the U.S. Attorney General’s Office, as required by statute in cases where the government is not a party.
Shipp, in an order on Tuesday, gave DOJ lawyers until Feb. 1 to brief the issue and granted their participation in upcoming oral arguments.
Chiesa spokesman Lee Moore said, “We are confident in our position and look forward to defending our statute.”
A N.J. constitutional amendment authorizing sports wagering was approved in a referendum in 2011 and the statute was enacted on Jan. 17, 2012. It permits wagering on professional and collegiate sporting events that take place outside New Jersey and do not involve a New Jersey team.
Last August, the NCAA sued, along with the National Basketball Association, National Football League, National Hockey League and Major League Baseball.
They sought a declaration that the law violates the federal Professional and Amateur Sports Protection Act (PASPA), enacted in 1992, which effectively banned sports betting in every state but Nevada, where it already was legal.
They also claimed legalized wagering in New Jersey would repel fans and compromise the sports’ integrity.
The state urged dismissal on summary judgment for lack of subject matter jurisdiction, contending that the plaintiffs lacked standing to sue because they failed to allege an injury-in-fact.
In a Dec. 21 opinion, Shipp ruled for the leagues on the standing issue, finding they sufficiently demonstrated that legalization would affect the sports’ perception. He referenced spectator and athlete surveys about wagering and game-fixing.
Shipp reserved a ruling on the constitutionality of PASPA. The issue is set for oral argument on Feb. 14.
Chiesa, in his brief supporting the motion for summary judgment, argued that PASPA’s mandate that states maintain pre-existing sports-wagering bans “violates the Constitution’s structural principles of federalism in several ways.”
Requiring New Jersey to maintain and enforce its sports-betting ban — rather than directly prohibiting sports betting — amounts to a congressional seizure of state legislative powers to achieve a federal objective, he argued.
And by treating states differently, PASPA is “an invalid exercise of Congress’s power to regulate interstate commerce” and “turns the equal-sovereignty principle on its head,” he said.
Congress doesn’t have “a free hand to pick winners and losers,” Chiesa wrote. “Otherwise, Congress could decree that automobiles may be made only in Michigan, or airliners only in Washington.”
Distinctions among states are justified only in connection with the existence of a localized problem, which sports wagering is not, he said. “Indeed, PASPA’s discrimination in favor of Nevada … is so blatant and so utterly lacking in justification that it fails even the low threshold for constitutional regulation set by the Due Process and Equal Protection Clauses,” he added.
Chiesa said precedent “has made clear that intentional discrimination among commercial interests cannot be justified by a desire to permanently ‘grandfather’ existing market participants.”
The government’s lead counsel, Peter Phipps, senior trial counsel for the Civil Division’s Federal Programs Branch, declines comment, as does a DOJ spokeswoman.
The plaintiffs’ lead counsel, Jeffrey Mishkin of Skadden, Arps, Slate, Meagher & Flom in New York, did not return a call seeking comment.