The U.S. Supreme Court Is Set to Decide on Sports Gambling. Is the NFL Ready for the Result?
Having taught sports law for many years, I am well aware of the rarity of sports-related cases that reach the United States Supreme Court, a number that can be counted on one hand. Well, we can add one to this short list, as this Monday the Court will hear oral arguments in Christie v. NCAA, a final attempt by New Jersey and its outgoing governor, Chris Christie, to overturn lower court rulings and legalize sports betting in the state. The Court will weigh the constitutionality of the Professional and Amateur Sports Protection Act (PASPA), a 1992 statute that bars states from implementing sports gambling, with exceptions for Nevada and a couple of others who had pre-existing sports betting and were allowed to continue.
New Jersey, seeing an opportunity to create revenue and juice flagging casino activity in Atlantic City, has waged a years-long battle with the sports leagues and the NCAA to have PASPA declared unconstitutional. And when the United States Solicitor General recommended that the Supreme Court not take the case in May, most legal experts—including this one—considered it a foregone conclusion that Christie had run out of legal options. And then against all odds, for reasons known only to the justices, they chose to hear Christie v. NCAA, a case that could have dramatic effects on the NFL and other sports leagues, as well collegiate athletics.
Thus on Monday oral arguments will pit all-star attorneys who have previously matched up in NFL litigation such as the lockout case: Ted Olsen arguing for New Jersey and Paul Clement arguing for the sports leagues. And Clement’s emphasis on “integrity” will be countered by Olsen’s label of “hypocrisy.” Let’s examine.
Integrity
Ethan Miller/Getty Images
A watchword for all sports commissioners has been the “integrity of the game,” a catchphrase particularly popular with Roger Goodell when disciplining players or teams. Sports gambling has traditionally been, and remains, antithetical to “integrity,” a taboo perhaps unlike any other in sports law.
Clement will point to history. Pete Rose was banished from baseball more than 28 years ago, never to be accepted back in, for betting on the sport while manager of the Reds. The NBA summarily dismissed former referee Tim Donaghy when he was found to have bet on games, labeling him a “rogue official” and moving on as if he never existed. The NFL once suspended stars Alex Karras and Paul Hornung for a year for betting on NFL games. And just three years ago, the league forbid players, including Tony Romo, from appearing at a fantasy football convention because it was held at a building annexed to a casino.
These attitudes about integrity and gambling, however, seem to be progressing in light of societal change.
Evolving attitudes
On November 13, 2014, NBA commissioner Adam Silver penned an Op-Ed in The New York Times suggesting a path toward gambling legalization, advocating bringing it out of the darkness into the light. I was a on a panel last week with NBA executive Dan Spillane, who suggested the same. Major League Baseball commissioner Rob Manfred has said he is reviewing the league’s stance on gambling; MLS Commissioner Don Garber has recently spoken out in favor of legalized sports betting.
Of course, these are the same sports leagues now fighting legalized sports betting in the Supreme Court. How to justify? One, they compartmentalize well, and two, the leagues prefer a federal solution through Congress rather than the state-by-state solution for which New Jersey is advocating. And yes, it is certainly an interesting juxtaposition that leagues are spending millions fighting legalized gambling while supporting it publicly. Notably absent from that support, however, has been Goodell, which brings us to our mixed messages.
Fantasy football softening
About 10 years ago while I was vice president of the Packers, we—scouts, administrators and front office executives—decided to have a fantasy football draft, similar to thousands of events being held in offices at that time. We were to have two rules to maintain “integrity”: (1) no money exchanged, and (2) no Packer players could be drafted. Even with those conditions, and much to my colleagues’ disappointment, I felt I had to call the NFL to get sign-off that we could do this.
I called my contact in the NFL office and explained the proposed draft, emphasizing the two features to preemptively address concerns. When I finished, there was a pregnant pause in the conversation. Finally, my contact said: “Andrew, we didn’t have this conversation.” Enough said, or not said. (Side note: Some of the worst fantasy players I have ever witnessed are people who actually pick NFL players—and do it well—for a living!)
That was then, this is now. Fantasy, both season-long and daily versions from companies such as DraftKings and FanDuel, have become a staple of the NFL and other sports leagues, which recognize fantasy as a wonderful fan engagement tool. It has, in my opinion, greased the skids for an overall acceptance of sports gambling. While the NFL does not hold equity in either of company—as the NBA, NHL and MLB do—virtually all NFL teams have sponsorship deals with either DraftKings or FanDuel (as does the NFLPA) and Jerry Jones and Robert Kraft are DraftKings investors (Cowboys players walk out onto the field through the DraftKings Fantasy Lounge).
Overcoming the Fear and Loathing of Las Vegas
Goodell has stated that fantasy is not “gambling” as it does not involve team outcomes, only individual player statistics. You can decide if you think fantasy is gambling or not, but from my view it, while “softer,” it is gambling nonetheless. Indeed, I have argued that if nefarious sorts were looking to influence a football game with so many interdependent parts, individual fantasy statistics would be easier to manipulate than game outcomes.
Beyond the embrace of fantasy, the NFL has exhibited other mixed messages about gambling. I spent a decade with the Packers, where one of our primary sponsors was the Oneida Casino. (Packers players stay at the hotel annexed to the casino every night before home games.) Other teams also have casino sponsorship deals, and the Patriots, Texans and Saints have all held training camp at the Greenbrier Resort, whose primary feature is ... a casino. Teams have worn sponsor patches on training camp jerseys featuring state lotteries. And then there is the true crossing of the Rubicon: The NFL, like the NHL, has now placed a team in the gambling mecca of this country, Las Vegas.
In announcing the Raiders relocation, Goodell praised the regulatory environment in Nevada—the same regulatory environment he is vigorously opposing in New Jersey. As I said, they compartmentalize well.
Inevitability
The NFL knows the inevitability of some form of legalized gambling but needs to be prepared for it. I have long suggested that the NFL hire a Chief Gambling Officer—just as it has a Chief Marketing Officer and Chief Medical Officer—to monitor players, coaches and officials and set guidelines for the changing environment ahead. And, in an under-the-radar move in 2015—pardon the pun ahead—the NFL, as other leagues, invested in Europe-based data company Sportradar, part of whose business is to ensure gaming integrity and monitor sports betting.
The NFL Wrestles with Its Vegas Double Standard
Beyond the philosophical discussion of gambling, there is, of course, the monetization angle. Teams are constantly seeking new revenue and fan engagement opportunities; gambling is an obvious and important one ahead. Although leagues would not actually take a percentage of gambling revenues—that would truly fly in the face of integrity—there would be myriad sponsorship activation opportunities for teams and leagues. Owners have seen what fantasy has done for fan engagement; legalized sports betting would put that engagement on turbo. As an example, I recently spoke on a panel with Stephen Master from Nielsen Research, which has found that non-bettors, on average, watch 16 NFL games a year while bettors, on average, watch almost 40 a year. NFL owners salivate at statistics such as this.
Thus, while the NFL fights legalized sports betting in New Jersey in the name of integrity, it is already figuring out its next steps in the sports betting space, having placed a team in Vegas and invested in Sportradar. Depending on your point of view, these actions represent hypocrisy, good business or both.
What will happen?
A decision in Christie v. NCAA, expected sometime next spring, could have several permutations. The Court could simply leave the status quo, although this seems unlikely as it took the case, we assume, for a reason.
The Court could declare PASPA unconstitutional, allowing New Jersey to start operating sports books immediately, with other states poised to follow suit. This is something the leagues oppose but must be prepared to manage.
Beyond those two extremes, the Court could resolve the dispute in more technical legalese. This result would probably make the ruling “New Jersey specific,” a result other states would dislike.
The Court could also invoke the extremely unlikely “nuclear option,” banning gambling everywhere, including Nevada, in order to treat all the states equally. That result would send shock waves through the gambling world and halls of Congress.
As we know, the recent world of the NFL has involved a lot of lawyers. However, none of those cases has reached this level—arguing in front of the highest court in the land. Get your popcorn ready, legal version.
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