Inside Asian Gaming

INSIDE ASIAN GAMING JULY 2018 42 GAMBLING AND THE LAW Imagine a statute passed in 1928, declaring that it was a felony to offer movies with sound, but exempting states that were already showing talking pictures. Regardless of whatever changes occurred in technology or in the way society viewed films, only a few states could have “talkies”. The New Jersey Legislature passed a ridiculous law in an attempt to get around PASPA, the ridiculous federal statute. PASPA bans states “authorizing” sports betting, so the Legislature approved a bizarre bill eliminating all criminal laws against such wagers. There were some limits, like the bets had to take place in a racetrack or casino. But the state purposely did not “authorize”, only decriminalized sports betting. Accepting wagers on sports events was now legal and unregulated, even if the sportsbook was run by the Mob. The collision of these two ridiculous laws resulted in one of the most ridiculous court decisions of all time. The US Third Circuit Court of Appeals ruled that PASPA was not only constitutional, but that it prevented New Jersey from changing its criminal laws. In other words, the federal government required the state to keep something a crime, even when the voters and state legislature want to make it legal. PASPA was the first federal law in history that openly interfered with states’ rights to set their own public policies about gambling. I thought the Supreme Court would limit the reach of the federal government, but only when a state police power issue was involved. The police power is the almost unlimited right of states to protect the health, safety, welfare and morality of their residents. But police powers are usually limited to such areas as fire, disease and gambling. The Court said Congress telling New Jersey that it could not change its sports betting laws was exactly the same as if it had an agent in the state legislature commanding the state to only enact laws that the federal government wanted. And it did not limit its decision to state police power issues. What does this mean for the legal gaming industry? WINNERS Obviously New Jersey and other states that have casinos and racetracks and don’t yet have heads-up sports betting will be able to attract more bettors and tourists. Delaware, for example, has sportsbooks with gaming devices, but it lost a court decision under PASPA limiting the state to parlay bets. So Delaware is in the best position to be the first state other than Nevada to take heads- up sports bets. Full Disclosure: I was a legal consultant for Delaware when the state reopened its sportsbooks. Some Indian tribes will be big Could tribal properties like Foxwoods in Connecticut be among the big winners from the US Supreme Court’s decision? PASPA was the first federal law in history that openly interfered with states’ rights to set their own public policies about gambling.