West Virginia Sports Betting Bill Gains Momentum; Could Set Stage for PAPSA Challenge in Supreme Court

After introducing a strongly worded bill that would legalize sports betting in the state, West Virginia appears poised to join New Jersey in challenging a longstanding federal prohibition.

A coalition of 11 lawmakers within the state’s House of Representatives introduced House Bill 2751 – officially titled “Legalizing Sport Pool Betting” – on March 1.

If passed, HB-2751 would call on the West Virginia State Lottery Commission to create the regulatory framework needed to allow the state’s brick and mortar casinos to operate on-site sportsbooks.

In choosing specific legislative language, lawmakers signaled West Virginia’s willingness to dispute the constitutionality of the Professional and Amateur Sports Protection Act (PAPSA) of 1992. That federal law forms the basis for the current ban on sports betting, which covers all but four American states (Nevada, Oregon, Delaware and Montana).

The textual language contained within HB-2751 immediately clarifies West Virginia’s stance on PAPSA, stating that the “legislature finds” Congress “unlawfully enacted” the law.

Going one step further, the bill’s authors include a section “finding that federal law prohibiting sports betting in West Virginia is unconstitutional,” before offering a final legislative finding stating the “federal government has no authority to prohibit sports betting in West Virginia.”

As documented by sports betting lawyer Daniel Wallach, writing for Legal Sports Report, the precise wording of these sections suggests that West Virginia is well aware of New Jersey’s ongoing struggle to challenge PAPSA.

Wallach cites the pivotal Interactive Media Entertainment & Gaming Association (iMEGA), Inc. v. Holder, 2011 WL 802106 (D.N.J. Mar. 7, 2011), in which several plaintiffs – including iMEGA, the New Jersey Thoroughbred Horsemen’s Association, and state senator Raymond Lesniak – brought their case against PAPSA to federal district court.

That court dismissed the lawsuit on the basis of judicial “standing,” a provision of the Constitution’s Article III which essentially holds that the federal judiciary will only hear “cases or controversies” that are actually occurring, and not merely hypothetical:

“Any civil enforcement action [to challenge PASPA] would be premature, because New Jersey law does not permit the sports gambling sought by Plaintiffs … [and if] PASPA were found unconstitutional, New Jersey law would still prohibit the sports gambling activities Plaintiffs and their members seek to legalize.”

In layman’s terms, New Jersey’s initial PAPSA challenge failed because state law doesn’t allow for sports betting as it currently stands.

This ruling resulted in New Jersey putting the issue to voters via public referendum, which was overwhelmingly passed to amend the state constitution to allow sports betting.

West Virginia’s bill seeks to cut the judicial standing argument out of the equation preemptively, by using the language of “legislative findings” to declare that sports betting is already authorized within the jurisdiction.

Looking forward, that strategy would set the stage – assuming the legislature passes HB-2751 and Governor Jim Justice signs it into law – for the State Lottery Commission to formulate sports betting licensing procedures. From there, the four major professional sports leagues (NFL, MLB, NBA, and NHL), along with the NCAA, would be expected to issue cease and desist letters to the state – as happened in New Jersey following that state’s successful referendum.

Any subsequent lawsuits stemming from that dispute would be heard by the US District Court for the Southern District of West Virginia, with that jurisdiction’s eventual ruling likely to be challenged to the Fourth Circuit US Court of Appeals, and then to the Supreme Court if necessary.

West Virginia’s legislative session ends on April 8, and HB-2751 is currently being considered by the state’s House Judiciary Committee.