SCOTUS hearing NJ case puts sports leagues in a bind, experts say

August 15, 2017 9:11 PM
  • Aaron Stanley
August 15, 2017 9:11 PM
  • Aaron Stanley

With the U.S. Supreme Court’s decision to hear New Jersey’s appeal to allow sports betting within its borders, the fence-straddling position held by professional sports leagues on the question of sports gambling is reaching a breaking point, a group of sports law experts said during a panel Tuesday morning.

Story continues below

Major pro sports leagues like the National Football League, Major League Baseball and the National Basketball Association have served as the primary bulwark behind enforcement of the Professional and Amateur Sports Protection Act, the 25 year-old law that largely prohibits sports betting outside of Nevada.

The leagues, led mainly by the NFL, have vociferously opposed in court attempts by New Jersey to repeal its state prohibitions on the activity at racetracks and casinos. However, the league has simultaneously embraced daily fantasy sports contests as a vehicle for fan engagement and even signed off on a franchise – the Oakland Raiders – to relocate to Las Vegas.

“I think the NFL understands that their position is mixed. It’s an amazing comment for Roger Goodell to say he praises the regulations in and around Nevada that are going to be in place when the Raiders arrive, while fighting those same exact same regulations that New Jersey has proposed,” said Andrew Brandt, a former executive with the Green Bay Packers and currently an NFL business analyst for ESPN and director of the Moorad Center for Sports Law at Villanova University, during a webinar hosted by Daniel Wallach, an attorney and sports law expert with Becker & Poliakoff in Fort Lauderdale.

“Those are diametrically opposed viewpoints on this issue,” Brandt added.

Daniel Wallach said that the leagues have used PASPA as an “impenetrable fortress” against any expansion of sports betting for the past 25 years.

“This particular statute has been enforced time and again by major sports leagues and the NCAA when a state has tried to criminalize sports betting,” he said, pointing to New Jersey’s nearly decade-long series of defeats across various federal and district courts.

“New Jersey is sort of like the Anthony Young of the sports betting debate,” Wallach continued, a reference to the New York Mets pitcher who lost a record 27 consecutive decisions in 1993. With the Supreme Court agreeing court agreeing to hear its case, “finally New Jersey’s persistence and investment may have paid off,” he said.

David Purdum, an ESPN journalist who covers sports gambling issues, said that the SCOTUS decision to take on the case was a “pretty huge momentum swing” for the state’s push to allow the activity.

“A lot of people didn’t give New Jersey much of a chance,” he continued, adding that “it feels like a football game where the favorite was dominating for three quarters and everybody thought the end result was already decided” only to have a surprise fourth quarter comeback.

Purdum added that the fact that the case has advanced this far puts the leagues in a real bind.

“The leagues are in a tough spot here going to the Supreme Court,” he said. “If they were to lose, they would relinquish a lot of control of the sports betting industry to the states, and good luck trying to get that back.”

“If the Supreme Court resolves the case in favor of New Jersey, strikes the federal law on its face and leaves nothing in its place, the leagues are going to be in a very difficult position to basically unscramble the egg,” added Wallach.

But Purdum added that even if New Jersey and sports betting expansion proponents were to prove victorious, there would still be ample monetization opportunities for the leagues.

“If the leagues were able to find a way to get a direct revenue stream from [sports betting regimes in new states] without having the appearance of that, that would be the ideal scenario,” Purdum said.

Purdum reckoned that the prospects of victory for New Jersey have increased significantly.

“I would definitely say that New Jersey is the favorite, but I don’t think it’s overwhelming by any means,” he said. “But then again, what does a New Jersey victory look like? It could be a very nuanced decision.”

Brandt, who spent a decade as an NFL executive, added that the NFL has a window of time until 2019 or 2020, when the Raiders arrive in Vegas, to coalesce around a firm posture toward the issue.

“In those three years, they know – they’re not dumb – they know that there’s going to have to be a solution to having a team placed in casinoland and having alternate teams coming every other week in casinoland when there’s supposedly now a ban [on players in casinos],” he said.