Today, oral argument took place in US District Court in Trenton, before Judge Michael Shipp in the NCAA v. Christie sports betting litigation. The only issue before the court was whether the NCAA and four major professional sports leagues (“Leagues”) have standing to challenge the state’s enactment of sports wagering. The court decided to consider standing before turning to the merits. The state has argued that the Leagues lack standing under Article III of the US Constitution to challenge New Jersey's efforts to legalize sports betting.
The court began by noting that the burden to establish standing was on the Leagues, and asked the Leagues to address the impact of Officer of the Commissioner v. Markell (the Delaware sports betting lawsuit) on standing; the necessary level of injury in order to establish standing; whether the Professional and Amateur Sports Protection Act (“PASPA”) could, in and of itself, convey standing; and whether the undisputed facts before the court could convey standing.
The Leagues argued that they have a sufficient personal stake in the litigation because it is the Leagues’ games that are being wagered on, and that Article III standing requires only an “identifiable trifle” such that there is a live case or controversy. If a party is the object of the challenged conduct, argues the Leagues, then it necessarily has a personal stake in the outcome of the litigation sufficient to confer standing. The Leagues feel that more gambling on their games will adversely affect the perception of those games and argued that existing case law supports the proposition that an impairment of perception is sufficient to create an injury. The Leagues believe that there will be greater suspicion of the normal occurrences within games if there is additional wagering on those games, and that fans will not care about the games as much as they will care about point spreads.
The court inquired about the fact that sports betting has proliferated in Nevada and in the illegal market. The Leagues responded that the central purpose of PASPA was to protect the integrity of sports, and that Congress concluded that even a little more wagering on sports would cause the Leagues harm. The Leagues suggested that the court should defer to this finding. The court also inquired about fantasy sports endorsed by the Leagues. The Leagues responded that Congress has, in subsequent pronouncements (for example, UIGEA) concluded that fantasy sports does not constitute gambling; the Leagues made an analogy between playing Monopoly versus being in the real estate market. The Leagues emphasized that it is they who get to decide, as a business, whether something will have a negative impact on their business; they have concluded that fantasy sports does not, but expanded wagering will. The Leagues concluded that, even without PASPA, the Leagues have the identifiable trifle required to establish injury.
Turning to PASPA, the Leagues noted that Congress found that the spread of gambling will affect sports, and that as long as that conclusion is rational, the court is bound by it. The Leagues noted that Congress gave the Leagues, through PASPA, the right to be free from the spread of sports betting, and that New Jersey is trying to deprive the Leagues of that right.
The Leagues also attempted to counter the proposition that there would be no harm from just one more state legalizing sports betting by stating that this point is not relevant to standing. The Leagues noted that this same point was argued to Congress, and rejected, at the time of the adoption of PASPA. Moreover, the Leagues noted that if New Jersey is permitted to authorize sports betting, all states would probably soon follow suit. Finally, the Leagues noted that the fact that the New Jersey sports betting legislation prohibits wagering on New Jersey college sporting events is an acknowledgement by the state that there are risks on integrity involved in sports wagering.
Turning to the state, the court asked the state to focus on the questions of the impact of Markell on standing; if the evidence the Leagues has offered on the potential negative effects of sports betting is sufficient to constitute the identifiable trifle required for standing; and can PASPA confer standing on its own. The state argued that the Supreme Court has identified standing as an “irreducible minimum” and a “hard floor,” and that standing is particularly important in cases where a federal court is being asked to consider the constitutionality of a statute, because a lack of standing avoids a situation where a federal court has to determine the constitutionality of acts of the other branches of government. The state cited several Supreme Court cases construing narrowly attempts by Congress to assign standing.
The state argued that just because Congress created a cause of action in PASPA, there must still be standing established before a party can bring an action, and that while standing might only require a trifle, that trifle must be an actual, identifiable, particularized, concrete injury. Damage to the perception of an event, the state argues, is simply not enough to create a concrete injury – otherwise, the concept of standing would be much broader. The state went on to argue that the Leagues cannot overcome the fact that there is a huge sports betting industry, both in Nevada and illegally; the Leagues have never claimed harm based on the prevalence of NCAA tournament brackets, for example.
The court asked about the fact that the Leagues submitted a study that said 17% of their fans would spend money on NBA sporting events if there were a team in Las Vegas. While questioning that study, the state argued that the study did not differentiate between legal or illegal sports wagering, and posed the question of under what circumstances is a game more likely to be fixed – with a regulated gaming industry or an unregulated black market? The state argued that undue influence arises as a result of the illegal industry, not the legal industry.
The court asked whether the Markell case necessarily meant that the Leagues have standing. The state responded that standing was simply not briefed or argued in that case, and thus it is of no precedential value on the question of standing.
Turning back to harm, the state argued that the Leagues are not actually arguing in opposition to sports betting – they are arguing in opposition to the regulation of sports betting. The Leagues have conceded that PASPA does not prohibit a state from withdrawing prohibitions on sports gambling. New Jersey could, therefore, repeal the portions of its criminal law that make it unlawful to bet on sports, and PASPA would not prohibit those wagers. What PASPA does prohibit, however, is actions by the state to regulate those wagers. The state argues that this is nonsensical, positing that it is better to have an illegal industry be regulated by the state rather than allow that illegal industry to proliferate. Thus, the state argues, the Leagues have not shown any harm that would result from state regulation of sports wagering, which is what is actually at stake in this litigation. Finally, the state reiterated that a finding by Congress does not substitute for the court’s independent duty to examine standing.
The court took the matter under advisement and stated that a written ruling would be issued by Friday, December 21.