Extras on Excise: Five Key Moments from Oral Arguments in the Supreme Court’s Case on Sports Betting

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On Dec. 4, 2017, the Supreme Court of the United States heard oral arguments in Murphy v. NCAA, a case generally concerning the legality of sports gambling at the state level. The case centers on New Jersey, which partially repealed certain prohibitions on sports gambling in 2014, and on federalism concerns, as New Jersey claims 28 U.S.C. § 3702 (one provision of the Professional and Amateur Sports Protection Act of 1992, or “PAPSA”) impermissibly commandeers state regulatory authority in violation of the Tenth Amendment. Even though the Supreme Court’s decision has not yet been released, states are not hesitating to take action in light of the case’s potential impacts.

Specifically, as reported by Bloomberg Tax’s Ryan Prete on Feb. 13, 2018, a plethora of states have either fully enacted legislation to legalize, tax, and regulate sports gambling, or have proposed legislation to legalize sports gambling pending the result of Murphy. More states are joining in, as seen as recently as Feb. 20, 2018, when West Virginia’s Senate passed S.B. 415, which would permit sports betting at several locations throughout the state.

Even though the Supreme Court’s opinion may not be released for several months, Bloomberg Tax analyzed the transcript of the oral argument and gleaned five key takeaways from the text.

It is worth noting that while a justice’s commentary certainly does not reveal his/her ultimate position in a case, a justice’s comments, questions, and hypotheticals can still be quite communicative.

1. Justice Breyer Successfully Summarizes New Jersey’s Argument (p. 12).

Roughly eight pages into the transcript, Justice Breyer took a few moments to question the attorney representing New Jersey—Theodore Olson—and to clarify New Jersey’s argument in the case.

Justice Breyer specifically stated, “Now, I think what you actually say is the federal government makes a determination of what interstate commerce will be like in respect to this particular item. … Once it makes that determination, it can forbid state laws inconsistent with that determination. That's called preemption. But what it can't do is say that our determination is that the states roughly can do it as they want, but they can't do it that way; for to do that is to tell the state how to legislate, in which case, it is the state and not the person who becomes the subject of a federal law.”

In a rare moment of levity, Olson responded, “I wish I had said that myself, Justice Breyer.”

2. Justice Kagan Presses New Jersey on its Position (p. 20-21).

Several pages after Justice Breyer’s exchange with Olson, Justice Kagan presses the attorney on the line between valid preemption and unconstitutional commandeering.

Specifically, the Justice remarked, “I mean, just the way you say that, Mr. Olson—the federal government is saying to the states you can't do something—so that sounds to me the language of preemption. All the time the federal government takes some kind of action, passes a law, and then says to the states: you know what, we've got this; you can't do anything.”

3. Justice Gorsuch Questions New Jersey on its Argument Selection (p. 28-30).

Later in the argument, Justice Gorsuch appeared to show his thinking on the case by asking Olson about New Jersey’s selection of arguments presented to the Court. The Justice noted that New Jersey made an argument to the lower courts that New Jersey was not actually authorizing sports betting; rather, it was repealing certain sports betting prohibitions at casinos and various other gambling houses. Thus, New Jersey argued, it was not violating 28 U.S.C. § 3702 because the state did not actually “authorize” sports gambling.

When Olson confirmed that New Jersey was no longer pursuing this argument, Justice Gorsuch remarked “I was curious, why?” and, several paragraphs later, asked, “you’d take a win on statutory grounds, wouldn’t you?”

4. Justice Kennedy Raises Commandeering Concerns (p. 31).

Roughly one-half page into the NCAA’s rebuttal—argued by Paul Clement—Justice Kennedy poignantly commented on the potential commandeering concerns in the case.

The Justice remarked that PAPSA “leaves in place a state law that the state does not want, so the citizens of the State of New Jersey are bound to obey a law that the state doesn't want but that the federal government compels the state to have. That seems commandeering.”

5. Justice Ginsberg Questions the United States on the Continuity of its Arguments (p.63).

Near the end of the arguments, Justice Ginsburg questioned Deputy Solicitor General Jeffery Wall—representing the United States as amicus curiae, supporting the NCAA—in a manner that was quite reminiscent of Justice Gorsuch’s points made above.

Justice Ginsburg noted, “Mr. Wall, the last time around, the government did say, in recommending that we deny cert, that PASPA does not require New Jersey to retain prohibitions it adopted. Pre-PASPA, it is free to repeal those prohibitions in whole or in part. That's what the government represented to this Court. Was that—was that statement inaccurate?”

Wall’s response was honest, though perhaps not as substantively convincing as he might have hoped: “No. I think we did not take into account the gamesmanship in which New Jersey was going to engage.”

Regardless of each justice’s commentary, we likely have several months before the Court releases its opinion, and we still do not know what the final result will look like. Luckily, the points raised by each justice provide more than enough debate fodder to tide attorneys—and sports fans—over until the decision is released.

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: How do you think the Court will rule in Murphy v. NCAA?

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