Our system of dual sovereignty limits the degree of control that Congress can exercise over state regulation. Indeed, the Constitution effectively provides Congress with two means to influence or displace state policy choices. First, Congress may “encourage a State to regulate in a particular way” by “hold[ing] out incentives to the States as a method of influencing a State’s policy choices.” New York v. United States, 505 U.S. 144, 166 (1992). Second, when Congress decides “to regulate matters directly” through an affirmative federal regime, the Supremacy Clause authorizes “pre-empt[ion] [of] contrary state regulation.” Id. at 178.
With PASPA, Congress has selected neither option: It has not provided States with incentives to prohibit sports wagering nor has it enacted a federal sports betting regime to displace contrary state law. Instead, PASPA prohibits States from modifying their own laws to “authorize” or “license” sports wagering and, under the en banc Third Circuit’s reading, compels States to enforce their own preexisting betting prohibitions, even if the people or their elected representatives have voted to repeal them.
That is impermissible. Congress cannot “regulate state governments’ regulation.” New York, 505 U.S. at 166. That is because “the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress’ 4 instructions.” Id. at 162. But that is precisely what the court of appeals held that PASPA does: It requires state legislatures to maintain unpopular laws on the books, state executives to police those laws, and (presumably) state judges to enforce them. So interpreted, PASPA erodes our federal constitutional design in which both the national and state governments are presumed to have sovereignty to regulate in their respective spheres.
Two lines of this Court’s federalism jurisprudence confirm that Congress, through PASPA, has exceeded its legitimate powers.