Justia Gaming Law Opinion Summaries

Blizzard Entertainment, Inc. (Blizzard) appealed an order denying its motion to compel arbitration. B.D., a minor, played Blizzard’s online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes” - items that offer “randomized chances . . . to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constituted unlawful gambling, and, thus, violated the California Unfair Competition Law (UCL). Plaintiffs sought only prospective injunctive relief, plus attorney fees and costs. Blizzard moved to compel arbitration based on the dispute resolution policy incorporated into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard’s service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. The Court of Appeal disagreed: the operative version of Blizzard’s license agreement was presented to users in an online pop-up window that contained the entire agreement within a scrollable text box. View "B.D. v. Blizzard Entertainment" on Justia Law

The 1992 federal Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. 3702, prohibited governmental entities from involvement in gambling concerning competitive sports. New Jersey’s 2012 Sports Wagering Act authorized sports gambling. NCAA and professional sports leagues (Appellees) filed suit. The district court entered a temporary restraining order (TRO) barring the New Jersey Thoroughbred Horsemen’s Association (NJTHA) from conducting sports gambling, finding that the state law violated PASPA. The court required Appellees to post a $1.7 million bond as security. On appeal, NJTHA successfully challenged the constitutionality of PASPA in the Supreme Court. On remand, NJTHA unsuccessfully sought to recover on the bond. The Third Circuit vacated and remanded. NJTHA was “wrongfully enjoined” within the meaning of Federal Rule 65(c) and no good cause existed to deny bond damages. PASPA provided the only basis for enjoining NJTHA from conducting sports gambling. The Supreme Court ultimately held that that law is unconstitutional; NJTHA had a right to conduct sports gambling all along. There was no change in the law; NJTHA enjoyed success on the merits and is entitled to recover provable damages up to the bond amount. View "National Collegiate Athletic Association v. Governor of New Jersey" on Justia Law

The Professional and Amateur Sports Protection Act (PASPA) makes it unlawful for a state or its subdivisions “to sponsor, operate, advertise, promote, license, or authorize by law or compact . . . a lottery, sweepstakes, or other betting, gambling, or wagering scheme based . . . on” competitive sporting events, 28 U.S.C. 3702(1), and for “a person to sponsor, operate, advertise, or promote” those same gambling schemes if done “pursuant to the law or compact of a governmental entity,” 3702(2), but does not make sports gambling itself a federal crime. PAPSA allows existing forms of sports gambling to continue in four states. PAPSA would have permitted New Jersey to permit sports gambling in Atlantic City within a year of PASPA’s enactment but New Jersey did not do so. Voters later approved a state constitutional amendment, permitting the legislature to legalize sports gambling in Atlantic City and at horse-racing tracks. In 2014, New Jersey enacted a law that repeals state-law provisions that prohibited gambling schemes concerning wagering on sporting events by persons 21 years of age or older; at a horse-racing track or a casino in Atlantic City; and not involving a New Jersey college team or a collegiate event. The Third Circuit held that the law violated PASPA. The Supreme Court reversed. When a state repeals laws banning sports gambling, it “authorize[s]” those schemes under PASPA. PASPA’s provision prohibiting state authorization of sports gambling schemes violates the anti-commandeering rule. Under the Tenth Amendment, legislative power not conferred on Congress by the Constitution is reserved for the states. Congress may not "commandeer" the state legislative process by directly compelling them to enact and enforce a federal regulatory program. PASPA’s anti-authorization provision dictates what a state legislature may and may not do. There is no distinction between compelling a state to enact legislation and prohibiting a state from enacting new laws. Nor does the anti-authorization provision constitute a valid preemption provision because it is not a regulation of private actors. It issues a direct order to the state legislature. View "Murphy v. National Collegiate Athletic Association" on Justia Law

FanDuel and DraftKings conduct online fantasy‐sports games. Participants pay an entry fee and select a roster, subject to a budget cap that prevents every entrant from picking only the best players. Results from real sports contests determine how each squad earns points to win cash. Former college football players whose names, pictures, and statistics have been used without their permission sued, claiming that Indiana’s right-of-publicity statute, Code 32‐36‐1‐8, gives them control over the commercial use of their names and data. The district court dismissed the complaint, relying on exemptions for the use of a personality’s name, voice, signature, photograph, image, likeness, distinctive appearance, gestures, or mannerisms "in" material “that has political or newsworthy value” or “in connection with the broadcast or reporting of an event or a topic of general or public interest." The Seventh Circuit certified the question to the Supreme Court of Indiana: Whether online fantasy‐sports operators that condition entry on payment, and distribute cash prizes, need the consent of players whose names, pictures, and statistics are used in the contests, in advertising the contests, or both. Plaintiffs’ details on the websites are not necessarily “in” newsworthy “material” or a form of “reporting” and there is no state law precedent interpreting a statute similar to Indiana’s. The Supreme Court of Indiana may consider not only the statutory text but also plaintiffs’ arguments about the legality of defendants’ fantasy games and the possibility of an extra-textual illegal‐activity exception. View "Daniels v. Fanduel, Inc." on Justia Law

The 1992 Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. 3701, provides: It shall be unlawful for a governmental entity to sponsor, operate, advertise, promote, license, or authorize or for a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental entity, a lottery, sweepstakes, or other betting, gambling, or wagering scheme based competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games. PASPA exempts state-sponsored sports wagering in Nevada and sports lotteries in Oregon and Delaware, and had an exception for New Jersey if New Jersey were to enact a sports gambling scheme within one year of PASPA’s enactment. New Jersey did not do so. After voters approved a sports-wagering constitutional amendment, New Jersey enacted the Sports Wagering Act in 2012, providing for sports wagering at casinos and racetracks, under a comprehensive regulatory scheme. Sports leagues sued to enjoin the 2012 Law.The district court held that PASPA was constitutional and enjoined implementation of the 2012 Law. The Third Circuit affirmed. PASPA, by its terms, prohibits states from authorizing by law sports gambling, and the 2014 Law does exactly that. View "Nat'l Collegiate Athletic Ass'n v. Governor of N.J." on Justia Law

Seeking to address illegal sports wagering and to improve its economy, New Jersey sought to license gambling on rofessional and amateur sporting events. Sports leagues sought to block those efforts, claiming, with the United States intervening, that the proposed law violates the Professional and Amateur Sports Protection Act of 1992 (PASPA), 28 U.S.C. 3701, which prohibits most states from licensing sports gambling. New Jersey argued that the leagues lacked standing because they suffer no injury from legalization of wagering on their games and that PASPA was beyond Congress’ Commerce Clause powers. The state claimed that PASPA violates principles under the system of dual state and federal sovereignty: the “anti-commandeering” doctrine, on the ground that PASPA impermissibly prohibits states from enacting legislation to license sports gambling; and the “equal sovereignty” principle, in that PASPA permits Nevada to license sports gambling while banning other states from doing so. The district court enjoined New Jersey from licensing sports betting. The Third Circuit affirmed, holding that the leagues have Article III standing to enforce PASPA and that PASPA is constitutional. The court noted that accepting New Jersey’s arguments would require extraordinary steps, including invalidating a law under the anti-commandeering principle (the Supreme Court has only twice done so) and expanding that principle to suspend commonplace operations of the Supremacy Clause over state activity contrary to federal laws. View "Nat'l Collegiate Athletic Ass'n v. Governor of NJ" on Justia Law

In 1986, the Association signed an agreement with Beulah Park governing racing operations; later, they amended to establish a regular process in which the Association periodically would grant or withhold consent to simulcast races to betting facilities outside of Ohio. In 1996, the Association executed a similar agreement with River Downs. Under the agreements, when Beulah Park and River Downs want to simulcast races to out-of-state betting facilities, they send a letter to the Association outlining the terms of the proposed simulcast and requesting authorization. After the Association withheld consent to 2006 requests, Beulah Park and River Downs filed a complaint with the Ohio Racing Commission. The Racing Commission ruled in favor of the race parks. The Association sued, arguing that the federal Interstate Horseracing Act, 15 U.S.C. 3004(a) preempted the Ohio law. The district court agreed. The Sixth Circuit affirmed, stating that "To respect the state law is to slight the federal one." View "Horseman's Benevolent & Protective Ass'n v. DeWine" on Justia Law