The Mouthpiece


By Martin Owens
Contributing Editor


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    Martin Owens

    The Passing Strange Tale of PASPA or how Major League Baseball got a veto in Dover

    Philadelphia, PA (Sports Network) - Since when does the Commissioner of Baseball get to pick and choose which laws the State of Delaware is allowed to enact? Since 1992, and the passage of the Professional and Amateur Sports Protection Act (PASPA). That's what MLB says, along with, the NFL, NHL and the NCAA. But the Federal court fore the State of Delaware does not agree. The MLB's suit for a Federal court injunction against Delaware's coming legalization, or re-legalization, of sports betting through its state lottery system has just failed.

    What's that all about? And what does it mean for you, the player?

    PASPA

    It has been said that the people who demand that government enforce their ideas as laws, are usually the kind of people whose ideas are idiotic. PASPA is a perfect example; the sort of pious publicity stunt that politicians so often resort to instead of doing their jobs. The idea behind it was that the pure spirit of American sport needed protection from Wicked Gambling. So never mind that football, basketball, and most college sports became nationwide media powerhouses precisely because more and more people were betting on them. Slamming gambling is the lowest common denominator of public virtue.

    So in 1992 Congress passed a law which prevented state or tribal governments from legalizing sports betting. Even the Clinton administration objected, for PASPA is unconstitutional on its face. In the first place it violates the Tenth Amendment- a Federal intrusion into matters reserved for the States. It violates the Fifth Amendment guarantee of due process and fair warning: you cannot outlaw "games" " or sports wagering" if these terms are not defined. It violates the Commerce Clause and the Equal Protection Clause by placing unequal and arbitrary burdens on interstate commerce: Delaware, Montana, Nevada and Oregon all had "grandfather" waivers to carry on with their sportsbooks and sports related betting. And of course this is silly: if betting is an actual threat to American sports, it should have been outlawed nationwide. If not, it should be allowed, subject to the decision of state authorities. As it stands, Federal law regards a sports bet made in Salt Lake City as a threat to our way of life, but the same bet made in Las Vegas is a wholesome and upstanding enterprise- regardless of what the people who actually live there may think or want.

    What makes the current case even weirder is that Congress, in granting these grandfather clauses, did not give a cutoff date - "act by January first or lose it." PASPA (28 U.S. Code sec 3704) specifically exempted pari-mutuel betting, and it gave a pass to three types of state sponsored sports betting . First, the operations conducted directly by the state between 1976 and 1990; second, state licensed sports betting that was legal as of October 1991 and actually conducted in that state between 1989 and 1991; and finally, casino based sports betting (and there was language here that would have allowed New Jersey to authorize sports betting, but the New Jersey authorities didn't bite).

    Now Delaware actually did have sports betting back in 1976. It was parlay betting on football games, but it was so unsuccessful it was withdrawn. Nevertheless, Delaware insists that it is within its rights to reinstate sports gambling if it wants to. And in this economy, Delaware very definitely wants to. Moreover, they have a point: there is nothing in PASPA that says "once you shut sports betting down, you can't get it back". All it says is that only states operating at those times, under those conditions can get a waiver.

    But the big sports leagues see it differently. Pounding on gambling is proof of public virtue, and it's a great distraction from other problems besetting the sports industry's image today. Football players torturing their fighting dogs or getting shot at strip clubs? Baseball players shooting steroids until their bats grow muscles, too? Billionaire team owners extorting impoverished cities for new stadiums? Never mind, one good public slap at Wicked Gambling and all's well.

    Nevertheless the MLB suit asks a couple of necessary questions: First, did Congress intend to limit sports betting to only those "schemes" games and drawings in existence in 1992, or are the states with waivers allowed to run any kind of sports betting they want? The big leagues, of course want it limited to only those games running in 1992; Delaware wants carte blanche to expand and experiment.

    The first answer probably lies in Las Vegas. Nevada was also given a waiver from PASPA. If the sports betting there has not changed since 1992, then there is an argument that the privilege of offering sports betting was meant to be frozen in the form it took that year. If, however, Vegas sports betting has evolved and developed new games and programs, (and I doubt that offerings like "half-juice", bet recycling and in-game betting were around when PASPA was written) then it would be unreasonable to infer that only Nevada had that right- that would be an exception to the exception, and not even Congress writes 'em that complicated.

    Second, does Delaware have an open invitation to re-install sports betting anytime, or was there a time limit for the states with waivers to either get in or stay out? That's a tougher one. There's nothing in the actual wording of the statute either way. This will probably come down to a court determining what would have been a "reasonable" time, and interpreting "the intent of Congress". In other words, the white collar version of tea leaves and a crystal ball. For the moment however, the Delaware law has not been shut down automatically, which was what the MLB request for injunction was designed to do.

    REFORM AND REPEAL

    Could PASPA be rewritten to include the new developments? Not without lots of work. Probably the best thing to do about PASPA would be to repeal it, and the Interactive Media Entertainment & Gaming Association (iMEGA) is trying to do just that. Their lawsuit, filed in Federal Court in New Jersey, recounts all the Constitutional problems above, plus makes the added point that deputizing the sports leagues to sue state governments without the states' consent is a violation of the Eleventh Amendment. It received strong support from the Jersey horse racing industry and Legislature.

    PASPA has not safeguarded the moral purity of American sports, and has instead placed arbitrary and unreasonable handicaps on most states (including the tribal governments of the Native Americans) while granting equally arbitrary and unfair advantages to a few. Here's hoping IMEGA's lawsuit succeeds- it's time this fossil was gone.

    WHAT CAN YOU DO?

    But it is also time for individual bettors need to make their voices heard.

    Just why should any individual's leisure pursuits be subject to inspection and interdict by the sports leagues? The players would be corrupted? To judge by the headlines, throwing games is the only thing they don't do. And if the voters of a US state, through their elected representatives, choose to legalize a given wager or game, where do the sports leagues get the power to sue state governments and veto their legislation? What part of the Constitution makes the sports industry a co-equal branch of government ? (Things would be a whole lot different today if GM or Exxon had been able to overturn state laws at will, don't you think?)

    Time to cut through the hypocrisy and pious PR. Bettors are people too, and it's time they let their public servants know it. Their choices deserved to be respected as much as anyone else's. Tell the powers that be to take a pass on PASPA and repeal it.

    Mr. Owens is a California attorney specializing in the law of Internet and interactive gaming and related issues, serving clients worldwide since 1998. He co-authored INTERNET GAMING LAW with Professor Nelson Rose, America's senior authority on gambling law (Mary Ann Liebert Publishers 2005, second edition just out, 2009), as well numerous other articles. He is an Associate Editor for "Gaming Law Review and Economics" magazine. Comments and inquiries welcome at to mowens@trade-attorney.com.

    Copyright 2009


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