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Sports betting case could have broad implications
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Sports betting case could have broad implications

Nebraska is one of 18 states backing N.J. in suit that may redefine limits of federalism

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U.S. SUPREME COURT

LAS VEGAS — Business is good for Las Vegas casinos. So good, in fact, that other states desperate for tax revenue want the U.S. Supreme Court to break Nevada's monopoly on the sports betting industry.

Today the court will consider an attack by New Jersey on the federal law prohibiting additional states from getting into the business. A decision that strikes down the law would "be a dam burst," said Kevin Braig, an Ohio lawyer who specializes in sports law.

The case is a titanic clash between states that want a piece of the action — New Jersey is supported by 18 other states — and the NCAA, the National Football League, Major League Baseball and other professional sports leagues. They contend the federal ban is necessary to protect the integrity of their games.

At stake: an underground sports betting economy estimated in the United States to be worth at least $150 billion a year and as much as $400 billion.

And yet the case is about even more than that.

It presents the justices with a rare opportunity to define the limits of federalism and the meaning of the 10th Amendment, which says: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Nebraska is among the 18 states that joined a friend-of-the-court brief supporting the New Jersey challenge.

Attorney General Doug Peterson, although not a supporter of expanded gambling, said the case raises an important issue of federalism. The brief argues that the federal law is unconstitutional because it bars states from changing their own laws to allow sports betting.

"Nebraska joined (the) brief solely because of the importance of the constitutional principle involved and not in any way based on the underlying state law at issue," he said.

The immediate question is whether Congress can force states to maintain bans on sports gambling. But a broad ruling for New Jersey could have consequences for other ways that the federal government tries to push policy preferences on state officials.

The decision "could have repercussions in areas that go well beyond sports betting: gun control, immigration, sanctuary cities," said Daniel Wallach, a Fort Lauderdale, Florida, lawyer who specializes in gambling and sports law. "It is the most important federalism case the Supreme Court has heard in many, many years."

A decision is expected in late spring.

Outgoing New Jersey Gov. Chris Christie initiated the fight years ago to help the state's flailing casinos and its racetracks. After voters approved a referendum in 2011 to allow sports betting, Christie signed a law authorizing it and dared the federal government to "try to stop us."

This has led to a battle in the lower courts. New Jersey has lost at every stage, with courts repeatedly upholding the Professional and Amateur Sports Protection Act of 1992. But as a sports bettor would say, throw out the record books now that the case is at the Supreme Court.

New Jersey, Wallach said, "just needs to win once."

It was to protect the integrity of the sport that Congress passed PASPA. It made it unlawful for a government entity to "sponsor, operate, advertise, promote, license, or authorize by law ... a lottery, sweepstakes, or other betting, gambling, or wagering scheme" on competitive sports.

The law grandfathered in Nevada's bookmaking operations, as well as existing sports lotteries in Delaware, Montana and Oregon. Importantly, it gave the rest of the states a one-year window in which to initiate sports betting — a provision specifically to benefit Atlantic City casinos. But New Jersey did not act.

When the state tried, in 2012, courts shot down the attempt, and the Supreme Court declined to get involved.

So the state tried a different tactic, following up on a passing comment from the U.S. Court of Appeals for the 3rd Circuit. Though New Jersey could not authorize sports betting, the court said, nothing in the federal law prevented the state from repealing laws that imposed criminal penalties on the practice. So New Jersey tried that, but lower courts said the state's intention was the same prohibited activity.

This time, though, over the opposition of the U.S. Solicitor General's Office, the Supreme Court apparently was intrigued.

The court accepted New Jersey's request to decide whether a federal law that prevents repeal or modification of a state law impermissibly "commandeers" the states' regulatory power.

World-Herald staff writer Martha Stoddard contributed to this report, which also includes material from the Associated Press.

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