In breaking news out of New Jersey, the Interactive Media Entertainment and Gaming Association (iMEGA) is suing to declare the Professional and Amateur Sports Protection Act (PASPA) unconstitutional. The organization is also involved with trying to overturn the Unlawful Internet Gambling Enforcement Act (UIGEA) through the courts.
A press conference announcing the lawsuit is scheduled for Monday, March 23rd at Room 103 of the State House in Trenton at 11:00am. Slated to appear are iMEGA Chairman Joe Brennan, Michael Campbell of the Thoroughbred Breeders Association of New Jersey, Dennis Drazin of the New Jersey Thoroughbred Horsemen’s Association, Tom Luchento of the Standardbred Breeders and Owners Association of New Jersey, and New Jersey State Senators Jeff Van Drew and Raymond Lesniak.
PASPA was passed in 1992 and prohibited expansion of sports betting beyond four states that permitted it at the time: Nevada, Delaware, Oregon, and Montana. The other 46 states had one year from its passage to opt out of the law. Brennan explained why PASPA is problematic in his eyes: “PASPA, as it’s written, is a violation of federalism and infringes on a state’s rights to raise revenue. It created a special class for a small number of states and deprived other states from being able to be a part of it.” New Jersey did not opt out of the law within the provided one year time frame. iMEGA’s brief notes that the New Jersey legislature was unable to pass a pro-sports betting law in that time frame.
Recent declining revenues in New Jersey have ignited the desire for sports betting to be legalized. However, PASPA represents an obstacle. To Brennan, iMEGA, and the other parties involved, the law marks a violation of the Tenth Amendment of the United States Constitution, which prescribes, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Brennan told Poker News Daily, “The Federal Government passing a law that intruded on states’ rights to determine whether to engage in gambling, and what type of gambling, is a violation of federalism.”
Brennan added that, when the law was passed, the Attorney General and U.S. Department of Justice both opposed the law, arguing that it was a violation of federalism. However, PASPA has not been challenged in the last 17 years since its passage. He explained, “That law, as flawed as it may be, has remained on the books.” The complaint will be filed in the U.S. District Court, District of New Jersey. iMEGA is also suing to declare the UIGEA unconstitutional and awaits word as to when and if an appeal will be heard. It is using the same attorneys for its PASPA challenge.
The sports betting market is a multi-billion dollar industry. Wagering in Nevada’s 176 sports books on the 2009 Super Bowl between the Arizona Cardinals and Pittsburgh Steelers was over $81 million. In 2008, when the New York Giants upset the New England Patriots, wagers were $92 million. This year, Nevada sports books posted a $6.7 million win as a result of the wagers. In New Jersey, regional pressures from casinos like Foxwoods as well as “racinos” in Philadelphia and West Virginia have resulted in declining revenues. In addition, the overall decline in the worldwide economy has led to fewer patrons heading to Atlantic City to gamble. In February, New Jersey casinos posted a “win” of $310 million, down 19.2% in comparison to the same period in 2008. Consequently, taxes paid to the State of New Jersey have also fallen.
Brennan explained iMEGA’s interest in seeing PASPA overturned: “New Jersey is interested in doing intrastate wagering on sports and using technology as a remedy for problems that opponents would have. It could be used as a case study for the rest of the country.” iMEGA was granted standing to sue to declare the UIGEA unconstitutional last March by Judge Mary L. Cooper. The case has since been appealed to the Third Circuit Court and resumption of the legal proceedings may occur in April.
iMEGA is also part of the ongoing battle in Kentucky to preserve the future of 141 internet gambling domain names. It has obtained funding for that lawsuit by spreading the cost over its membership. The Commonwealth of Kentucky has appealed to the State Supreme Court, although it has not been announced whether the highest court in the Bluegrass State will hear the case.
In addition to being a violation of the Tenth Amendment, iMEGA’s brief also charges that PASPA tramples on the Commerce Clause of the U.S. Constitution, Equal Protection Clause, First Amendment, Eleventh Amendment, due process, and privacy rights. In addition, the organization charges that PASPA should be “void for vagueness,” its central argument in the UIGEA case.
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