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SCOTUS Strikes Down PASPA, Sets Stage for Legalization of Sports Gambling by States

This morning, in a monumental decision, the United States struck down PASPA.

Blake Yagman

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LAS VEGAS – MARCH 19: In this handout provided by the Las Vegas News Bureau, the Mirage Resort Race and Sports Book in Las Vegas is shown crowded with basketball fans during NCAA March Madness Tournament March 19, 2010. in Las Vegas, Nevada. (Photo by Glenn Pinkerton/Las Vegas News Bureau via Getty Images)

In 1992, the United States Congress passed a bill called the Professional and Amateur Sports Protection Act (“PASPA”) which made gambling on professional and collegiate athletics illegal. However, PASPA exempted four states, Nevada, Delaware, Montana, and Oregon; this allowed these four states to permit and regulate their own sports gambling spheres. According to the Supreme Court then (“SCOTUS”), “PASPA makes it unlawful for a State… ‘to sponsor, operate, advertise, promote, license or authorized by law or compact… a lottery, sweepstakes, or other betting, gambling, or wagering scheme based… on’ competitive sporting events.”

This morning, in a monumental decision, the United States struck down PASPA. The Supreme Court stated in their decision, “In our view, petitioners’ interpretation is correct: When a State completely or partially repeals old laws banning sports gambling, it “authorize[s]” that activity. This is clear when the state-law landscape at the time of PASPA’s enactment is taken into account. At that time, all forms of sports gambling were illegal in the great majority of states…”

The summary of the sports gambling debate was best encapsulated by Justice Alito in the Court’s majority opinion, “The legalization of sports gambling is a controversial subject. Supporters argue that legalization will produce revenue for States and critically weaken illegal sports betting operations, which are often run by organized crime. Opponents contend that legalizing sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports.”

The majority decision states: “Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA regulates state governments’ regulation of their decisions… [t]he Constitution gives the Congress no such power.”

Historically, former New Jersey governor Chris Christie’s administration decided to challenge the constitutionality of PASPA on behalf of the state of New Jersey; a defeat of PASPA would allow New Jersey to bring regulated sports gambling to the Garden State. Presently, the case is now referred to as Murphy (the new governor of New Jersey) v. NCAA.

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The legal challenge to PASPA was rooted in the 10th Amendment’s anti-commandeering principle. The 10th Amendment’s anti-commandeering principle “forbids the federal government from commanding the states to implement federal laws or policies that would interfere with state sovereignty.” With respect to PASPA, the law forbids states from setting up their own sports gambling governing scheme; the anti-commandeering argument is rooted in the belief that the United States government should not be allowed to dictate how states govern sports gambling. New Jersey’s argument is that the federal government, consistent with Supreme Court precedent set in U.S. v. New York, does not have the power to regulate what states may legislate.

Going forward, the Supreme Court’s ruling makes it possible for individual states to legalize and regulate sports gambling on their own. Some states, including West Virginia, are already preparing to legalize sports gambling and are creating a regulatory scheme by which the state can monitor and tax competitive sports gambling. West Virginia’s potential system also provides an integrity fee—a fee which is paid to the state’s public universities (namely WVU and Marshall) that claims “to help protect [the integrity of the competition] and keep the outcomes honest.” These integrity fees are to be paid out by the states’ casinos rather than by the state itself.

It should be interesting to see which states move forward with legalization. Somewhat akin to the legalization of Marijuana in some states, expect to see some of the states that legalize give their reasoning as a way to produce additional tax revenue. According to the American Sports Betting Coalition (“ASBC”), PASPA’s illegalization of sports wagering lead to a “thriving, $150 billion illegal gambling market.” The redistribution of sports gambling’s underground economy could help states do a variety of things they initially did not have funding for (as with Colorado and the legalization of Marijuana) – such as improving local infrastructures or investing in public schools.

Stay current on the Supreme Courts’ decision and on the legalization of sports gambling here on Front Office Sports. The Supreme Courts’ 49-page decision in Murphy v. NCAA can be found here.

Blake, a recent law school graduate, lives in New York City. Blake attended undergrad at the University of Miami where he worked for Hurricanes football, WVUM and student government. Blake writes about legal issues related to the sports industry for Front Office Sports.

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Rematch: Analyzing the USWNT’s Latest Legal Battle with the USSF

The United States Women’s National Team’s lawsuit comes at a crucial time for women’s athletics. Here are the implications of the suit.

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Photo Credit: Matthew Emmons-USA TODAY Sports

The U.S. Women’s Soccer Team (USWNT) recently reignited its three-year battle with its employer, the U.S. Soccer Federation (USSF), by filing a lawsuit in federal court for institutional wage discrimination.

The lawsuit comes after the USWNT had initially filed a wage discrimination complaint under the Equal Pay Act (EPA) and Title VII with Equal Employment Opportunity Commission (EEOC), the government agency responsible for examining such claims. After a lengthy investigation, the EEOC granted the USWNT a “right to sue” letter, allowing them to clear a necessary procedural hurdle, and the team filed its lawsuit a month later on International Women’s Day 2019.

A quick recap of the dispute so far. The USWNT had filed a complaint with the EEOC in March of 2016 alleging that they were paid less than the men’s national team, a potential violation of both the EPA and Title VII. The USSF responded by arguing that: 1) the pay disparity was not as stark as the USWNT made it out to be; 2) any pay difference between the two sides could be attributed to the pay structure agreed upon by the USWNT Players’ Association; and 3) the USSF had not violated either the EPA or Title VII because they could rely on the affirmative defenses available to them under the law. In the midst of the EEOC’s investigation, the two sides reached a new collective bargaining agreement in 2017, through which many of USWNT’s complaints were addressed. The current lawsuit, however, is for potential EPA and Title VII violations that occurred before the current CBA went into effect.

READ MORE: NBC and Refinery29 Promote Female Empowerment Through ‘On Her Turf’

This lawsuit is particularly interesting for two reasons. First, it provides a rare glimpse into what wage-discrimination lawsuit looks like in a professional sports context. Most sports-related wage-discrimination claims occur in college as opposed to professional sports because men and women’s professional sports leagues are institutionally separated. This means that players in the WNBA, for example, cannot sue the NBA for being paid less than men because the NBA is not their employer.

In college sports, however, men and women’s sports programs fall under the same institution, and male and female coaches are employed by the same entity, which allows female coaches to bring equal pay claims by arguing that a common employer — the university — pays a female employee less than a male counterpart. The lawsuit with the USWNT is more analogous to college sports because the USSF is the common employer for both the men and women’s soccer teams, thereby allowing the USWNT to meet the preliminary requirements of establishing a case under the EPA.  

Second, what separates this lawsuit from other wage-discrimination claims both in and out of sports is that the USWNT is suing for institutional wage discrimination. Instead of saying that a particular female employee was paid less than a particular male employee, the USWNT is looking to establish a class action lawsuit and is alleging that the Federation acted in a way that hurt the women’s soccer program as a whole. Such institutional disparity lawsuits are common in college sports because of Title IX but are relatively rare in the EPA and Title VII context.

Just like it did in its response to the USWNT’s initial EEOC complaint, the USSF will likely rely on a market-force defense in its answer. Essentially, they’ll not only deny that a pay disparity exists in the first place but also argue that any wage discrepancy between the men’s and women’s soccer teams is justified because the market for men’s soccer is greater than the market for women’s soccer — and, as a result, the men’s team generates more revenue than the women’s team. Thus, any additional wages paid to the men’s soccer team over the women’s team are not discriminatory but rather based on “a factor other than sex,” a recognized defense under the EPA and Title VII.

What will make this case tricky for the court evaluating it is that, in order to properly assess the validity of the market-force defense, the court must not only understand the differences in the markets between the two sides but also look at the USSF’s role in shaping the respective markets.

READ MORE: Elias Sports Bureau Continues Evolution While Staying in the Family

In other words, this runs a lot deeper than simply stating that the men’s team generated more revenue than the women’s team. If the USSF spent more money on advertising men’s games over women’s games or ensured that the men’s team played during prime time TV slots while the women played during off times, then the USSF has contributed in allowing the men’s team to generate more revenue than the women’s team by investing in one market at the expense of the other. Such an analysis will require the court to reject taking the market at face value but instead examine the underlying factors that comprise the market in the first place.  

How the USSF actually responds to the USWNT’s complaint and how a court handles a future trial between the two sides remains to be seen. What is clear, though, is that this latest USWNT lawsuit comes at a time when women are shattering the glass ceiling throughout sports. A few years after becoming the first female full-time assistant coach in any of the four major U.S. professional leagues, Becky Hammon became the first female coach to be interviewed for a head coaching job in the NBA when the Milwaukee Bucks spoke to her about their vacancy in May 2018. The Tampa Bay Buccaneers recently became the first NFL team to hire two full-time female assistant coaches. On the equal-pay front, the U.S. Women’s National Hockey Team won a dispute with its governing body after threatening to boycott the 2017 Hockey World Championships.

Even if the USWNT is unable to obtain its desired outcomes through litigation, the team is making strides in the larger fight for women’s equality simply by filing this lawsuit and bringing awareness to the issue. And, already, there is evidence that the USWNT’s lawsuit is sparking change. Adidas recently announced that it would begin paying equal bonuses to women’s World Cup winners as those earned by winners of the men’s tournament. Other sponsors and business partners may soon follow suit. No matter the outcome, the USWNT is reminding the entire sports industry that the fight for gender equality is here to stay. But the rallying cry will be even louder if they win.

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Former Louisville Players Take On NCAA in New Lawsuit

Five players from Louisville’s 2013 Men’s National Championship team have decided to file suit against the NCAA to “restore their names”.

Blake Yagman

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Luke Hancock, a former Louisville basketball player and 2013 Final Four Most Outstanding Player, and four of his former teammates have filed a lawsuit against the NCAA.

Hancock and his fellow plaintiffs — Gorgui Dieng, Stephan Van Treese, Tim Henderson and Michael Marra — are alleging that the NCAA portrayed the 2012-2014 Louisville Cardinals in a false light, breached their contract with “student-athletes” by vacating wins of eligible players, and negligently handled the investigation into the Louisville escort scandal during the tenure of former coach Rick Pitino.

This case is particularly important because it can redefine the types of cases that are brought against the NCAA; essentially, it could open the floodgates to litigation against the collegiate sports organization for sullying the names of current and former “student-athletes” who are subjects of investigations and violations.

An added layer of nuance to this lawsuit is that Hancock and his former teammates are represented by Morgan & Morgan’s John Morgan — an attorney with a reputation for his tireless pursuit of justice for injured plaintiffs seeking to be made whole. In this case, the plaintiffs want to be redressed through an NCAA declaration “clearing them of any wrongdoing and to have the program’s wins and national title reinstated.”

Morgan’s cases, which are guided by the firm’s motto of “For the People,” often demonstrate the ability to strike down the Goliath’s of society, including governmental institutions, major corporations, and mass tortfeasors. For example, Morgan has been locked in a high-profile court battle over the legality of smokable medical marijuana in Florida with the state’s governor, Rick Scott; Morgan represents some of the most critically ill citizens of the state who have medical marijuana prescriptions.

Morgan’s tenacious pursuit of fairness and justice led him to represent the plaintiffs in the immediate case against the NCAA.

“We’re here to reinstate all of those wins, not just some of those wins. But more than that — we are here today to get these players’ good names back,” Morgan stated during a press conference last week.

Hancock feels optimistic about his chances of attaining justice in this case.

“I have to live with this every day,” Hancock said. “I’m involved with the right things and do the right thing. I’m excited that Morgan & Morgan partnered with us and is going to represent us because enough is enough.”

John Morgan feels that this case represents more than what happened to his plaintiffs; he believes it is symbolic of the NCAA’s corruption as a whole. “College rules are phony. Everyone knows they’re being broken by every single school, every single day. They exist to protect the integrity of the game.

Our firm is used to taking on giants. What the NCAA is good at doing is exploiting young men for big money. The one thing bullies understand is blood in their mouth. That is what we do.”

Attorney Mike Morgan, who is co-counsel to John Morgan on the NCAA case, elaborated on why the firm is representing Hancock and his former teammates in this matter: “The NCAA has overstepped its authority when it stripped these Louisville players of their wins, awards & championship. The NCAA  sanctions were based off alleged criminal acts, which is clearly outside of their jurisdiction. The NCAA is not the moral police and certainly not the actual police. [I]nvestigations of alleged criminal acts should be left to the professionals where the accused are afforded actual due process. What the NCAA has done to the good names of our clients is unconscionable and we look forward to restoring them to the place of honor that they deserve.”

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Earlier this summer, we covered some of the cases which could alter the way collegiate sports function. This is such a case; it bears watching as the litigation process moves forward.

The plaintiffs, in this case, are represented by John Morgan, Michael Morgan, Bernard Mazaheri, Jonathan Rabinowitz, Shea Conley and Keith Mitnik of Morgan & Morgan; the players are also represented by co-counsel Shawn Freibert and James Ellis.

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How an Agent is Synthesizing Athlete Representation with the Law

For Chris Patrick Jr., being able to successfully blend representation and law has helped him carve out a unique niche as an agent.

Blake Yagman

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Part of what makes the sports industry special is its practitioners’ willingness to innovate within different pre-existing roles in sports.

Chris Patrick Jr. created a niche role for himself by synthesizing the position of a sports agent with the skill set of an attorney; while many sports agents attend law school, fewer have passed a bar exam and are actually practicing law. Patrick’s firm, the Sports Law Group, provides National Basketball Association players with a powerful toolset to maximize their potential on and off the court.

The Sports Law Group, which is based in Washington D.C., negotiates player contracts for NBA players and handles their legal needs — including matters pertaining to family law, business law, estate planning, and real estate.

“Whether you want to create a foundation to give back to the community, buy your first house, or invest in a business venture, we are here to counsel and guide you through the process,” he said. “Our goal is not to just negotiate your contract, but to be in your corner for the next 20 years.”

Part of what makes Patrick so successful as a sports professional is his genuine passion for the game of basketball. The roles that he has successfully occupied include an AAU coach, an NBA agent at a major sports agency, and now, the managing partner of the Sports Law Group.

“Basketball has been a part of me my whole life,” Patrick said, “[and, because of my knowledge of basketball] I know enough about the game to know if a guy can make it [as an NBA player].”

Patrick’s knowledge of the game has helped him tremendously when recruiting clients; he has a unique eye for NBA talent that has served him well. For example, over the course of his career as an agent, Patrick has signed six undrafted players that were eventually signed to NBA contracts — including Robert Covington, Eric Moreland, and Dwight Buycks.

Moreland, currently represented by the Sports Law Group and a member of the Detroit Pistons, emphasizes Patrick’s well-roundedness.

“I appreciate his business acumen along with the fact that he knows the game of basketball, which gives me the best of both worlds,” he said. “Chris is very analytical and can break down statistical information to layman’s terms so that I can understand the business side of this profession.”

Damyean Dotson, also represented by the Sports Law Group and a member of the New York Knicks, stressed the importance of having an agent who is also an attorney.

“[Chris] being an attorney was an added bonus and made me confident knowing that he had my back with everything I would be doing.”

Ultimately, NBA players seek an agent that they can trust; Patrick believes that because he is an attorney, he has the ability to sell to players that he is governed by even stricter rules than sports agents are.

“Being an attorney,” Patrick said, “you have to do things the right way.”

This is a point that athletes recognize: an increased emphasis on ethics. Although sports agents are governed by ethics rules set forth by their respective player’s associations, the competition of the sports agency business can sometimes lead agents to do unscrupulous things. As an attorney, the ethics rules imposed by bar associations and the Model Rules of Professional Ethics impose an even stricter standard than those which govern sports agents. Patrick, who is both an attorney and an agent, must follow the rules in both.

“Outside of basketball, he is just a good, decent human being, who truly wants to ‘do the right thing,’” Moreland said. “He definitely wants the best for me as a person, a player and as a professional.”

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Additionally, Patrick emphasizes some of the other benefits of having a practicing attorney as your agent, including understanding some of the nuances that can be negotiated in a player contract, a deep knowledge of the NBA’s collective bargaining agreement, and the ability to formulate thorough arguments on behalf of his client.

At the end of the day, it is clear that Patrick’s success is driven by his passion for the game of basketball and his willingness to do whatever it takes to make his clients successful.

Patrick’s innovation flows organically from his love of the work he does.

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