Could Donald Trump Expand Sports Betting Nationally Through His AG Appointment?

In the aftermath of Donald Trump's shocking election night victory, many gaming analysts are assessing what, if any, impact a Trump presidency might have on the U.S. gaming industry. Some point to his past experience as a casino owner/operator as a positive harbinger of things to come. But others astutely note that his backing by Sheldon Adelson (a staunch opponent of online gaming), coupled with the Republican Party regaining full control of Congress, could have a negative overall impact, particularly in the online sector. The possibility exists that a Republican-controlled Congress could enact legislation banning online gambling, and thereby roll back the clock for those states (e.g., New Jersey, Delaware and Nevada) that have already entered the online poker space. Whether or not that scenario actually comes to pass is unknown at this early juncture, but a number of leading analysts view the Republican control of all three branches of government as a potentially troubling development for online gambling.

But one area where a Trump presidency could benefit the gaming industry is in the sports betting sector. As many might recall (especially with the help of YouTube), President-Elect Trump was a vocal supporter of legalized sports betting when he owned several New Jersey casinos. During the early 1990's, when New Jersey was given a "one-year" window under PASPA to legalize sports betting, then-casino magnate Trump pushed hard for New Jersey to enact sports betting legislation, calling it "vital to keeping taxes low and putting the bookies out of business." While New Jersey failed to beat the PASPA clock in 1993 and have been unsuccessful (to date) in overcoming the federal ban in court, the Garden State's sports betting hopes could receive a significant boost with Mr. Trump in the White House and New Jersey Governor Chris Christie in an influential advisory or cabinet role (perhaps as Attorney General).

Specifically, President-elect Trump could influence sports betting policy through his appointment of a new Attorney General. Under PASPA, the Attorney General is empowered to seek an injunction against any violation of PASPA in federal district court. (28 U.S.C. § 3703). By contrast, "professional sports organizations" and "amateur sports organizations" (the only other entities with standing to sue under PASPA) can seek injunctive relief for violations of PASPA only when their own "game[s] are alleged to be the basis such violation." (Id.). Thus, a sports organization would only have standing to sue under PASPA to protect its own games, but not those associated with another sports organization (despite Judge Michael Shipp's ruling to the contrary in the Christie II case). For example, while the National Basketball Association could seek a court injunction against any State or federally-recognized Indian Tribe that has legalized sports betting on NBA games (since it meets PASPA's definition of a "professional sports organization" with respect to its own games), it would lack standing under PASPA to seek injunctive relief to block the wagering on the competitive games of other sports organizations, such as those sponsored by Major League Soccer or the PGA Tour.

This standing limitation could provide states with an unconventional avenue for legalizing sports betting on soccer, golf, tennis, boxing, mixed martial arts, arena football, and NASCAR (as well as a number of other "non-major" sports), since the governing organizations of those sports might not object to such wagering schemes, and, indeed, might tacitly (or even explicitly) support it to increase interest in their sport. And the five major U.S. sports leagues (NBA, NFL, MLB, NHL, and NCAA) would be powerless to block it in court, so long as the legislation at issue expressly excluded those organizations' athletic contests from any new sports wagering regime. Of course, this strategy would only work if the U.S. Attorney General (who is empowered to seek injunctive relief against any violation of PASPA, irrespective of the sport) opted not to pursue litigation against states that have authorized this limited form of sports gambling. But as we have seen with the recent spate of state legislation approving fantasy sports wagering (which arguably falls within PASPA's broad scope), the Attorney General has not exactly been a vanguard of PASPA enforcement. In the nearly 25-year history of PASPA, the Attorney General has never initiated a lawsuit against a state for violating PASPA, opting instead for the more subservient role of an "intervener" or "interested party" in the two PASPA lawsuits brought by the major sports leagues against the State of New Jersey. Although a number of states have explicitly legalized fantasy sports through legislative enactments, the Attorney General has not involved PASPA to block any of those new laws, and probably never will.

With the Attorney General possessing so much discretionary power (especially when the major sports leagues are not incentivized--or, in some cases, not even allowed--to sue), Mr. Trump's election could lead to the expansion of traditional sports betting without requiring any Congressional action. By way of illustration, a new Presidential administration could decide that blocking state-authorized sports betting is not a high enough priority (especially when it is supported by the affected sports organizations) and thus direct the new Attorney General not to pursue any legal challenges when the sports betting at issue is legal under state law and is undertaken with the approval or acquiescence of the affected sports organizations. This could provide an opportunity for a state like New Jersey to enact a true sports gambling regime--with regulatory oversight--albeit one that is somewhat limited in nature (involving only those sports organizations that support wagering on their games). Perhaps Major League Soccer or mixed-martial arts could whet the sports betting appetite for now. After all, having some sports betting is better than having none. A measure like this could provide some temporary relief to New Jersey's struggling casinos and racetracks until a more comprehensive federal regime is enacted. This is one potentially intriguing approach for expanding legal sports betting without repealing or amending PASPA.

-- Daniel Wallach