So there’s this underground industry, see. Americans spend an estimated $150 billion on it every year. All but 3% of that commerce currently flows through illegal channels.
Some people consider the activity a vice. They say it’s addictive, it destroys families and ruins lives. But many other people say, Hey, this is something most adults can enjoy and handle in moderation. We’re not children. Why would you arrest us for enjoying this small bit of pleasure?
The US Supreme Court just ruled that states can legalize and regulate an activity prohibited by the federal government.
Some states want to bring it into the open—to legalize it, but limit it through well-controlled regulation. The federal government balks at this idea. Special interests have hired high-priced lawyers to fight it out in court.
I’m writing, of course, about sports betting.
For years, the state of New Jersey has been fighting the federal government and the major professional sports leagues for the right to legalize and regulate sports betting within the state’s hourglass-shaped borders.
In a landmark ruling published this morning, the U.S. Supreme Court agreed with New Jersey. The federal Professional and Amateur Sports Protection Act, passed by Congress in 1992, banned wagering on professional and college sports. The Act also explicitly prohibited states from sponsoring or authorizing such gaming.
That language had always held New Jersey back. New Jersey officials first tried to legalize sports betting at casinos and race tracks in 2012. The NCAA, NFL, NBA, NHL and MLB promptly sued. The case has been tied up in the courts ever since. Lower courts generally held that proactively regulating sports betting clearly “authorized” the federally banned activity.
The U.S. Supreme Court saw it differently.
The 10th Amendment Is Strong
Citing the Constitution’s 10th Amendment, the court’s 7-2 majority affirmed that states are not required to enforce federal law. If the feds prohibit an activity, federal officers can enforce that ban. The states may choose to enforce that ban, too—but state officials are not required to enforce it.
Here’s perhaps the most optimistic sign in the Murphy v. NCAA decision: This was a bipartisan ruling led by the court’s most conservative justices.
The long-running case has a ponderously long name but will forever be known as Murphy v. NCAA. Phil Murphy inherited the title when he was sworn in as governor of New Jersey in January, and the NCAA just happens to be first in line among all the sports leagues battling to keep wagering illegal.
The implications for cannabis in Murphy v. NCAA are obvious and enormous. The idea that states are not required to carry out federal laws has always been a strong card in the hand of legalization proponents. But they’ve never had to actually play it, not like New Jersey just did—all the way to the Supreme Court, the final table.
Learn About ‘Anti-commandeering’
My Leafly colleague Ben Adlin covered this ground a couple months ago. Ben’s piece (When State and Federal Laws Conflict, Who Wins?) quoted Karl Manheim, a constitutional law professor at Loyola Law School in Los Angeles:
“As is often the case in constitutional law, we have an equal and opposite constitutional command in the 10th Amendment, which says that states have a certain degree of autonomy and that Congress cannot commandeer state processes,” Manheim said. The anti-commandeering doctrine, as it’s known, limits the supremacy clause by prohibiting the federal government from forcing states to do its bidding.
If Congress were to pass a law expressly barring states from taxing the sale of silly hats, a state law establishing a tax on silly hats would clearly violate the supremacy clause. On the other end of the spectrum, if Congress were to ban silly hats outright, states could freely pass laws preventing local police departments from enforcing that federal law. “As a general principle,” Manheim said, “states don’t have any constitutional obligation to cooperate with any federal agency.”
Today’s ruling actually updates Manheim’s theoretical example. The Supreme Court held that Congress may not issue “a direct order to the state legislature.” By doing so in the case of sports gambling, the Court majority held, the federal law that prohibits state licensing of sports gambling schemes “violates the anticommandeering rule.” In his majority opinion, Justice Samuel Alito wrote:
“As the Tenth Amendment confirms, all legislative power not conferred on Congress by the Constitution is reserved for the States. Absent from the list of conferred powers is the power to issue direct orders to the governments of the States. …Adherence to the anti-commandeering principle is important for several reasons, including, as significant here, that the rule serves as ‘one of the Constitution’s structural safeguards of liberty’…”
Conservative Justices On Board
The court also held that the ban on sports gambling advertising, which is included in the 1992 federal act, is not constitutional. If the ad ban were allowed to stand, Justice Alito wrote, “federal law would forbid the advertising of an activity that is legal under both federal and state law—something that Congress has rarely done.” Alito’s majority opinion remained silent on the question of whether states may regulate or prohibit advertising of sports betting. That’s directly relevant to the cannabis industry, as most legalized states do regulate cannabis advertising to varying degrees.
Here’s perhaps the most optimistic sign in the Murphy v. NCAA decision: This was a bipartisan ruling led by the court’s most conservative justices. The majority coalition consisted of justices Alito, Roberts, Thomas, and Gorsuch (conservative); Kennedy (moderate); and Breyer and Kagan (liberal). In a court where most decisions are slim 5-4 outcomes, a 7-2 vote is a strong signal of agreement.
What Next? Betting at the Jets Game?
This morning’s ruling sent sports radio hosts into a frenzy of speculation. “Are they gonna have a betting window at Giants and Jets games?” asked one of the guys on the Dan Patrick Show. Both “New York” teams, of course, play their home games at the Meadowlands in New Jersey. “When you go to a restaurant, will they give you a ticket you can mark up? Can I bet my food on the Raptors game?”
I remember the same kind of banter on Denver radio when cannabis stores opened in early 2014. Drive-time radio jocks joked about hotboxing the studio. People wondered when they could buy a joint and a latte at Starbucks.
Now that New Jersey has a green light to proceed with sports betting, the state would do well to take a bit of wisdom from the cannabis space: Start low, go slow. Legal cannabis rolled out under extremely strict regulations in Colorado and Washington. We learned from those states, and now regs in California, Massachusetts, and other second-wave states are more reasonable and sensible.
We give to you, you give to us. Sports betting can learn from the past experience of cannabis regulation—and the legal minds crafting the next wave of state legalization measures will surely learn from Murphy v. NCAA.