Cato Institute Amicus Brief Supports New Jersey Sports Gambling Appeal

Last updated on November 2nd, 2018

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The Cato Institute and the Pacific Legal Foundation this week filed an amicus brief which supports New Jersey’s recent appeal to the U.S. Supreme Court regarding online sports betting. In February, Chris Christie’s administration filed an appeal with the Supreme Court, stating the federal ban on sports gambling in all but 4 states (the PAPSA law) is unconstitutional.

The Cato Institute is a libertarian think tank located in Washington D.C. The think tank was founded in 1974 by Charles Koch. It is considered one of the leading think tanks in the world, sitting at 6th best among American think tanks and #14 among the world’s list of such institutes, according to the University of Pennsylvania’s 2011 Global Go To Think Tank Index Report.

Cato Institute Cites Tenth Amendment

According to the Cato Institute amicus brief, two questions must be asked of the PASPA. One, does PAPSA’s prohibition on state licensing of sports wagering commandeer the power of U.S. states to regulate, in violation of the Tenth Amendment? Two, does PAPSA’s discrimination in favor of Nevada, Oregon, Montana, and Delaware violate the fundamental principle of equal sovereignty?

At one point, the brief states, “PASPA is unique in that it directly regulates the ability of states to change their own laws, interfering with the relationship between the states and their residents and undermining the democratic process at the state level.”

The Cato Institute brief may help New Jersey’s case, though its wording does have flaws. For one, its author only mentions three states which have authorized sports gambling–Montana was forgotten. Such oversights might hurt its standing somewhat before the United States Supreme Court justices, but the underlying logic of its argument still stands: the PAPSA is an extraordinary and possibly unconstitutional piece of legislation.

New Jersey Appeals Sports Betting Ban

New Jersey appealed to the U.S. Supreme Court its ban on sports betting in all but four states, in hopes of providing Atlantic City casinos equal footing with their competitors in Las Vegas. Under provisions of the Professional and Amateur Sports Protection Act of 1991, only Nevada, Delaware, Montana, and Oregon are allowed to have sports gambling.

In 1991, New Jersey was offered the chance to legalize sports betting in their state, too. The legislature declined to do so, inaction which many New Jersey politicians and taxpayers have regretted since that time. The lack of sportsbooks in Atlantic City casinos is one reason the Boardwalk gaming venues have declined over the past 20 years.

Faced with budget concerns and hoping to save the Atlantic City gaming industry, New Jersey politicians search for ways to raise revenues through gambling. One well-publicized method is to legalize online gambling, which happened in November 2013. Another attempt to raise money through gaming is to argue before the Supreme Court that the PAPSA law is unconstitutional. According to New Jersey’s legal filing, the PAPSA violates the 10th amendment, which states that the principle of federalism stipulates that powers not granted to the federal government under the Constitution (nor prohibited of the States in the Constitution) are reserved to the States (or American people). In other words, the Constitution does not provide for the U.S. federal government the power to decide gambling laws (nor keep states from doing so), therefore the states should have the right to decide.

Oklahoma Indian Tribes Give up Gaming Website

Last month, the Cheyenne and Arapaho Tribes of Oklahoma gave up its online poker site: PokerTribes.com. The combined Native American tribes built the site in mid-2012 as a free-play website. At the time, they promised to turn the card room in a real money site.

The Cheyenne and Arapaho negotiated a compact with Oklahoma in 2013, which gave them the go-ahead to accept players from outside the United States. Officials from the U.S. Department of the Interior, which handles tribal affairs, objected to the activities on PokerTribes in December 2013

This prompted a lawsuit from the Cheyenne and Arapaho Tribes, hoping to overturn the Interior Department’s decision. Due to questions about the tribe’s finances and conflict among rival factions of its leaders, the tribes decided to end their lawsuit in late February.

Two factions of the tribe elected different governors in late 2013: Darrell Flyingman and Eddie Hamiltn. The Bureau of Indian Affairs never recognized either leader as legitimate, though each faction has announced separate decisions ending the Poker Tribes card room. Meanwhile, Flyingman’s administration has hired investigators to look into the $9.4 million the tribes paid to Universal Entertainment Group, which developed the PokerTribes website. According to the Native Times, Flyingman has filed charges against the individual who bought and administered PokerTribes. The spending was approved under the former governor, Janice Prairie Chief-Boswell.