Symposium: In sports-betting case, the Supreme Court should bet on federalism

Jonathan Wood is an attorney at Pacific Legal Foundation, an adjunct fellow at the Property and Environment Research Center, and a blogger for libertarianenvironmentalism.com. He represents a coalition of libertarian-leaning groups as amici supporting New Jersey in Christie v. National Collegiate Athletic Association.

Can Congress dictate to states what their own laws must be? The Supreme Court agreed to decide that question in Christie v. National Collegiate Athletic Association, the latest iteration of New Jersey’s years-long effort to legalize sports betting and have the federal Professional and Amateur Sports Protection Act declared unconstitutional. The Supreme Court’s decision will have wide-ranging implications for federalism, particularly cooperative federalism, and political accountability.

The present conflict began in 2011 when New Jersey voters approved a referendum, by a whopping 2-1 margin, favoring the legalization of sports betting. Thanks in part to PASPA, which forbids states from “authoriz[ing]” this type of gambling, it is illegal to bet on sports in almost every state. Only those states that allowed sports betting in 1992, basically just Nevada, may retain it.

The federally compelled state bans are widely and flagrantly violated. Illegal sports betting is likely a $100 billion dollar enterprise. Across the country, people openly gamble on the Super Bowl, the NCAA basketball tournament and many other sports events. President Barack Obama bragged about violating these laws during an appearance on “The Late Show with Stephen Colbert.” Even the commissioner of the National Basketball Association has called for PASPA’s repeal.

In response to the popular referendum, New Jersey initially tried to replace its state prohibitions with a licensing and permitting regime, which was challenged by the NCAA and four professional sports leagues. The U.S. Court of Appeals for the 3rd Circuit held that this reform violated PASPA, rejecting New Jersey’s argument that PASPA violates the equal-sovereignty doctrine by discriminating among the states (Nevada can have sports gambling but New Jersey can’t). The court also rejected New Jersey’s argument that PASPA unconstitutionally commandeers state law, interpreting “authorize … by law” to forbid states from affirmatively licensing or permitting gambling but not from repealing their own prohibitions. The Supreme Court declined to review that decision.

So New Jersey accepted the 3rd Circuit’s invitation and partially repealed its prohibitions on sports gambling at casinos and racetracks, without replacing them with any affirmative authorization or permit. Sports leagues challenged that too. This time, the en banc 3rd Circuit, abandoning the limits it had recognized earlier in order to avoid the commandeering problem, interpreted PASPA to forbid states from repealing their own prohibitions as well as from affirmatively authorizing gambling.

Nevertheless, the court of appeals once again rejected New Jersey’s commandeering arguments, construing commandeering to apply only when federal law compels states to adopt and enforce a new policy. “PASPA does not command states to take any affirmative actions,” the court held, but merely forbids states from amending policies they had previously, voluntarily adopted. The court suggested that PASPA may allow some repeals but refused to explain what those might be, leading the dissent to question whether, under the majority’s rationale, any “repeal of any kind will evade [PASPA’s] command.”

The Supreme Court granted certiorari to decide whether the 3rd Circuit’s narrow view of the commandeering doctrine is correct. Its past commandeering cases suggest that it will reject that view.

The Supreme Court has twice found federal laws to commandeer states unconstitutionally. In New York v. United States, the court considered a federal law that required states to either regulate radioactive-waste disposal according to standards set by Congress or accept ownership of the waste. States had no option to do nothing and cede the issue to the federal government, but were forced to adopt as state policy one of two options imposed by the feds. Although the Supreme Court had previously referred to commandeering as a constitutional limit on Congress’ power, this was the first time it had found that a federal law actually “commandeered the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program.” Under New York, if Congress wants a policy enforced, it can encourage states to voluntarily participate (so-called cooperative federalism) or it can enforce the policy itself directly on individuals, but it cannot simply dictate policy to states.

Printz v. United States extended the protections of the commandeering doctrine to state officials. The Brady Act required local law-enforcement officers to perform background checks for prospective gun sales. The United States argued that New York should be limited to situations in which Congress requires states to affirmatively enact policies set by Congress, arguing that “the constitutional line is crossed only when Congress compels the States to make law in their sovereign capacities.” But the Supreme Court rejected any limitation of the commandeering doctrine based on the “distinction between ‘making’ law and merely ‘enforcing’ it, between ‘policymaking’ and mere ‘implementation.’” Once again, the court emphatically concluded that the federal government “‘may not compel the States to enact or administer’” federal policy.

Commandeering is perhaps easiest to recognize in contrast to pre-emption cases. In the latter, Congress may give states an option of adopting some sort of state regulatory program or cede the issue to the feds. It has done so many times in the environmental arena: If states do not regulate up to federal standards, the federal government directly imposes those standards on individuals.

PASPA is a unique statute in two significant respects: It regulates states as states (and discriminates among them), and it gives states no option to cede the issue of sports betting to federal enforcement. PASPA does not contain a federal prohibition on sports betting (probably because that would have been a political nonstarter with Nevada). Instead, it forbids states from legalizing sports betting and individuals from placing bets pursuant to any state legalization effort.

The Supreme Court has previously identified two principal justifications for the commandeering ban: (1) Commandeering would frustrate the Constitution’s system of federalism; and (2) commandeering would frustrate political accountability. Both also cut against PASPA and the 3rd Circuit’s rule.

Limiting the commandeering doctrine to save PASPA would pose significant federalism problems. Most obviously, it would make cooperative federalism much more difficult, if not impossible. If Congress can compel states to continue enforcing policies forever as long as the initial adoption was voluntary, a state would have to think long and hard before participating in any cooperative federalism arrangement. If a state initially agreed to participate, the federal government could bind the state forever, no matter how expensive, unpopular or ineffective the policy proved. To do so, it would only need to enact a statute like PASPA forbidding the state from “authorizing” any activity prohibited by the policy.

PASPA also undermines traditional federalism principles by denying states the ability to experiment with novel solutions to vexing public policy problems. Consider the recent federalism revolution on the issue of marijuana. Because of the failed federal war on drugs, many states have experimented with more relaxed regulations or wholesale legalization of the drug. If PASPA is constitutional, Congress could stop this federalism experiment (or any other) in its tracks by forbidding any more states from “authorizing” anything that was previously forbidden.

This kind of commandeering would also frustrate political accountability. When the federal government dictates policy to states, accountability is diminished at both the state and federal level. The federal government is less accountable because it can adopt feel-good policies but shift the hard questions of how to implement and pay for them to states. And accountability at the state level will be undermined because voters will reasonably punish state politicians for these policies if they prove unpopular, even though the politicians are powerless to do anything about them. We have seen this play out in New Jersey, where the voters adopted a state referendum calling for state-law reform, apparently in the mistaken belief that the state had any say in what state law should be.

It’s easy to underestimate this political accountability concern. Won’t voters realize what’s going on and vote accordingly, especially when the issue has received as much attention as PASPA has? Although intuitively appealing, this is a too-cheery view of politics. Because people’s time and attention are limited, and the likelihood that a single vote will affect an election is incomprehensibly small, voters are rationally ignorant on political issues. Only 42 percent of Americans can name the three branches of government. Hitting more closely to home for SCOTUSblog fans, only 34 percent can name a single Supreme Court justice. Expecting voters to understand the ins and outs of a relatively obscure statute like PASPA is out of the question.

The Supreme Court’s decision to take up the question of PASPA’s constitutionality is a welcome sign. Letting the 3rd Circuit’s decision stand would risk Congress using a similar approach to undermine federalism and political accountability in other policy areas. By deciding the constitutional question now, the Supreme Court can set the necessary limits on commandeering while only PASPA is at stake. It would be harder for the court to take this step if PASPA’s approach, currently confined to a failed statutory regime, spread to other, more politically sensitive issues.