WASHINGTON — A federal law that effectively bans commercial sports gambling across most of the nation faced skepticism at the Supreme Court on Monday. A majority of the justices indicated that the law had crossed a constitutional line by requiring states to do the bidding of the federal government.
New Jersey is leading the challenge to the law, and Chris Christie, the state's governor, watched the argument from the front row.
Americans are estimated to annually place $150 billion in illegal wagers on sports. If the Supreme Court strikes down the law, dozens of states could quickly make such wagers legal and reap tax revenues from them.
The court's decision, expected by June, could also affect other conflicts between federal and state authorities. At Monday's argument, Justice Sonia Sotomayor said some forms of federal regulation of marijuana could be threatened by a ruling that allows sports betting.
The betting law, the Professional and Amateur Sports Protection Act of 1992, prohibited states from authorizing sports gambling. It exempted Nevada, where sports betting has long been legal, along with sports lotteries in Delaware, Montana and Oregon. Other states were given a year to opt in, but none acted in time.
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In 2011, though, as casinos in Atlantic City were losing revenue, voters in New Jersey amended its state Constitution to allow sports betting, and the state Legislature soon passed a law authorizing it. The four major sports leagues successfully challenged the state law as a violation of the federal one.
In 2014, the Legislature tried a new approach, partly repealing its existing bans on sports betting to allow it at racetracks and casinos. The leagues again sued and won.
In the Supreme Court, the federal law faced headwinds.
"The citizens of the State of New Jersey are bound to obey a law that the state doesn't want but that the federal government compels the state to have," said Justice Anthony M. Kennedy.
He said that crossed a constitutional line and blurred the political accountability of elected officials. "The citizen doesn't know," he said. "Is this coming from the federal government? Is this coming from the state government? That's precisely what federalism is designed to prevent."
The Supreme Court has said that the federal government may not commandeer state resources to achieve federal objectives. On the other hand, the court has said that the federal government may regulate all sorts of things directly and that federal laws pre-empt contrary state laws under the Constitution's supremacy clause.
Most of Monday's argument in Christie v. National Collegiate Athletic Association, No. 16-476, was an effort to decide whether the 1992 law amounted to unconstitutional commandeering or permissible pre-emption.
Theodore B. Olson, a lawyer for New Jersey, said the law was a "direct command" to the states rather than a federal effort to regulate sports betting.
Justice Stephen G. Breyer proposed a distinction. The federal government can first make a policy determination to regulate an activity, he said. "Once it makes that determination, it can forbid state laws inconsistent with that determination," he said. "That's called pre-emption." What it cannot do, he added, "is to tell the state how to legislate."
Mr. Olson agreed. "I wish I had said that myself, Justice Breyer," he said.
Justice Elena Kagan did not seem fully persuaded, asking whether state officials were required to do anything in particular by the 1992 law. "Who is being conscripted in order to do what here?" she asked.
Paul D. Clement, a lawyer for the sports leagues and Mr. Olson's successor as solicitor general in the George W. Bush administration, said the 1992 law was part of a set of regulations establishing federal policy. "Congress in all of these statutes did not want there to be sports gambling schemes operating in interstate commerce," he said.
Jeffrey B. Wall, a deputy solicitor general who argued in support of the leagues, said New Jersey was not entitled to repeal only a part of its law, thereby "channeling sports gambling to particular state-preferred providers." He added that the federal government would not object to a wholesale repeal of the state law.
"The problem that Congress was confronting was state sponsored and sanctioned sports gambling schemes," Mr. Wall said. "It didn't care if I bet with my buddy on the Redskins game or we had an office pool. It wasn't going after all sports gambling."
For most of the argument, the lawyers and the justices ignored the potential consequences of a decision striking down the law. Toward the end, though, Mr. Olson noted that billions of dollars were at stake.
"Nevada has sports betting, and it has it regulated," he said. "What I'm saying is, and all of the evidence supports this, that betting on sports is taking place all over the United States. Five percent of it is legal in Nevada. The rest of it is illegal. New Jersey decided we are going to look at it."
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