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Does the Proposed Sports Betting Legislation Have the Same Commandeering Problem as Murphy v. NCAA?

By: Michael Shaffer

A newly introduced federal sports betting bill would allow the federal government to veto the state sports betting laws that do not meet the minimum requirements of the federal law. The bill was introduced by now retired U.S. Senator Orrin Hatch (UT) and U.S. Senator Chuck Schumer (NY).[1] Some of the main provisions of the bill include altering the Wire Act to allow for some sports betting information to flow across state lines; mandating the use of official league data through at least 2022; and creating a national sports wagering commission and clearinghouse (of data) for the purpose of coordinating federal and state regulation efforts.[2] The proposed federal legislation does not address how to deal with the states that have already passed sports betting legislation.[3] The bill omits guidance on this issue even though seven states have joined Nevada in authorizing full-scale legalized sports betting.[4] Two more states have recently passed a bill and 20 other states as well as the District of Columbia have introduced sports betting legislation.[5]

However, the most interesting provision of the bill is the requirement that the states must have their sports wagering law approved by the U.S. Attorney General.[6] The bill contains certain minimum standards that must be met in order for the state law to take effect.[7] The U.S. Attorney General then has 180 days to approve the law.[8] If it does not meet the standards of the federal law, then steps must be taken to conform the law with the federal standards.[9]

This proposed federal law is an attempt to replace the federal government’s previous sports betting law, the Professional and Amateur Sports Protection Act (PASPA).[10] Other than an exception for Nevada and limited exceptions for four other states, PASPA prohibited states from authorizing a sports betting scheme.[11] In the summer of 2018, PASPA was struck down as unconstitutional in Murphy v. NCAA.[12] In that case, the U.S. Supreme Court found that PASPA violated the anticommandeering principle.[13] The court summed up PASPA’s violation of the anticommandeering principle by finding that “[E]ven where Congress has the authority under the Constitution to pass laws requiring or prohibiting certain acts, it lacks the power directly to compel the States to require or prohibit those acts.”[14]

The proposed federal legislation which gives a federal official oversight over state regulation now has the potential to run into the same anticommandeering problems as Murphy. There were two landmark cases that established the anticommandeering principle before the decision in Murphy. In New York v. United States, the court found that the federal government could not “[compel the States to enact or administer a federal regulatory program” which in this case was to “take title” of radioactive waste within their borders.[15] In Printz v. United States, a federal law which commanded the chief law enforcement official of each local jurisdiction to conduct gun background checks in accordance with the federal law was unconstitutional.[16] The court found that the prohibition on commandeering states like in New York could not be circumvented by commandeering state officials.[17]

However, in Reno v. Condon, the court rejected extending the anticommandeering principle to a federal law which regulated a state’s ability to disclose the information of registered drivers without the driver’s consent.[18] The court found “That a State wishing to engage in certain activity must take administrative and sometimes legislative action to comply with federal standards regulating that activity is a commonplace that presents no constitutional defect.”[19]

The proposed federal legislation does seem to match the description of what is allowed by Reno as it requires that a state wishing to engage in certain activity (regulated sports betting) complies with federal standards. The requirement that a state law must comply with a federal law also has precedent as the Federal Food Stamp Act requires that state plans comply with federal standards set by the Secretary of Agriculture.[20]

Nevertheless, the federal law could also be seen as an attempt by the federal government to have states “administer a federal regulatory problem” as was the issue in New York. The issue may be decided by the level of scrutiny that the U.S. Attorney General uses in approving each state’s plan. If states are generally allowed to implement their plans as they please with little or no change caused by the federal law, then it is unlikely to offend the states or cause a commandeering problem. However, if the U.S. Attorney General uses this power to force states into regulating as the federal government wishes, then it is likely that this power is seen as the federal government forcing the states to “administer a federal regulatory program.”

This proposed federal legislation may not pass Congress, but if it does the law and its administration could pose the same anticommandeering problems that caused PASPA to be found unconstitutional.

[1] Hilary Russ, Federal bill Would Regulate U.S. Sports Betting, Reuters (Dec. 19, 2018), https://www.reuters.com/article/us-usa-congress-sports-betting/federal-bill-would-regulate-u-s-sports-betting-idUSKCN1OI2OZ.

[2] Dustin Gouker, Feds Would Have to Approve State Sports Betting Laws Under New Draft Bill In Congress, Legal Sports Report (Dec. 4, 2018), https://www.legalsportsreport.com/26545/federal-sports-betting-bill-2018/.

[3] Id.

[4] See Ryan Rodenberg, State-by-State Sports Betting Bill Tracker, ESPN (Nov. 14, 2018), http://www.espn.com/chalk/story/_/id/19740480/gambling-sports-betting-bill-tracker-all-50-states (last visited Jan. 19, 2019).

[5] Id.

[6] Gouker, supra note 2.

[7] Id.

[8] Id.

[9] Id.

[10] See 28 U.S.C. §3702–3704.

[11] See 28 U.S.C. §3702, 3704(a).

[12] Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S. Ct. 1461, 1481 (2018).

[13] Id.

[14] Id. at 1477 (quoting New York v. United States, 505 U.S. 144, 166 (1992)).

[15] New York v. United States, 505 U.S. 144, 188 (1992).

[16] Printz v. United States, 521 U.S. 898, 935 (1997).

[17] Id.

[18] Reno v. Condon, 528 U.S. 141, 151 (2000).

[19] Id. at 150–151.

[20] John Brennan, Legal Experts Examine the New Federal Sports Betting Bill: Is This PASPA All Over Again?, US Bets (Dec. 6, 2018), https://www.usbets.com/new-federal-sports-betting-bill-paspa-similarities/.