This morning, the Supreme Court heard oral argument in Christie v. NCAA, an important federalism case. The case involves an effort by the NCAA and various professional sports leagues to block New Jersey’s effort to partially legalize sports gambling under state law. Overall, the argument went well for New Jersey, and badly for the NCAA and its allies (including the federal government).

That’s not only good news for sports bettors, it’s also good news for constitutional federalism. The case has implications that go far beyond the specific issue of gambling. If the NCAA were to prevail, the federal government would have a free hand to block many state efforts to legalize activities previously forbidden under state law. Fortunately, it appears that a majority of the justices don’t want to gamble away federalism.

The sports leagues contend that New Jersey’s 2012 and 2014 laws partly legalizing sports betting are illegal because they violate the federal Professional and Amateur Sports Protection Act (PASPA), which mandates that states may not “sponsor, operate, advertise, promote, license, or authorize by law or compact” sports betting. New Jersey’s legalization law, the leagues contend, qualifies as “authorization.”

This provision of PASPA clashes with Tenth Amendment, which the Supreme Court has long interpreted as banning “commandeering” of the states, in cases such as Printz v. United States (1997) and New York v. United States (1992). The federal government cannot require state officials to help enforce federal law, or force state legislatures to enact any legislation. To get around this constitutional constraint, the NCAA and its allies claim that there is a difference between mere legalization of sports betting under state law and “affirmative authorization” of gambling. The latter, supposedly, can be banned by Congress even if the former cannot. The New Jersey law, they claim, qualifies as “authorization” because it regulates sports betting in various ways and confines it to particular locations, such as Atlantic City casinos, and current and former race tracks.

This distinction was endorsed by the lower court in its ruling in favor of the NCAA. If the Supreme Court were to adopt it, Congress could potentially enact laws blocking states from legalizing almost any activity they previously banned, except perhaps in cases where they do so without leaving any regulatory restrictions in place at all. That will potentially constrain state experimentation on a wide range of issues including drug legalization, licensing reform, gun control, land use restrictions, environmental policy, and many, many others. Almost all such legalization initiatives leave some regulations in place. For example, state marijuana legalization laws often limit sales to specially licensed establishments, and continue to forbid sales to minors, among other restrictions.

Fortunately, today’s oral argument reveals that most of the justices don’t buy this attempt to circumvent the constitutional rule against commandeering. Justice Anthony Kennedy, a key swing voter in many Supreme Court federalism cases, put the issue well in his very first question to Paul Clement, the famous “super-lawyer” representing the sports leagues:

[PASPA] leaves in place a state law that the state does not want, so 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. That seems commandeering.

Justice Stephen Breyer, a liberal who in the past has not been sympathetic to state anti-commandeering claims, made a similar point. As he put it, “the subject matter of this law is the state. That’s what this is about, telling states what to do, and therefore, it falls within commandeering.”

Breyer and Kennedy are exactly right. Forcing states to either maintain laws that ban sports gambling or legalize the activity completely is indeed a form of commandeering, because it it is “telling states what to do” (Breyer) and forces a state to keep in place “a law that the state doesn’t want” (Kennedy) As Paul Clement admitted in his response to Kennedy, “partial repeal [of state anti-gambling laws] is forbidden” by PASPA. That imposes a major constraint on states’ control of their own laws.

Justice Elena Kagan asked Clement to explain “what’s the difference between saying you must pass a certain piece of legislation and saying you must maintain a piece of legislation on the books?” Clement was forced to admit that “I don’t think that there is a distinction necessarily between those two.” If there is no meaningful distinction, then surely both qualify as commandeering.

At various times during the oral argument, Justices Kagan, Ruth Bader Ginsburg, and Sonia Sotomayor suggested that PASPA may be constitutional because it is similar to federal laws that preempt conflicting state laws. Congress does indeed have the power to override state laws that conflict with federal legislation. But preemption does not typically force a state to make an activity illegal under the state’s own laws, or require it to either legalize the activity completely or keep current laws banning it on the books indefinitely. Preemption merely prevents the states from interfering with federal enforcement efforts, or – in some cases – from regulating private activity that the federal government wishes to leave free. It does not force states to keep existing state laws on the books, and it does not prevent states from partially repealing them.

It is fair to ask, as some of the justices did, whether New Jersey’s authority to partially legalize sports gambling under state law matters very much in a world where Congress could potentially just enact its own law banning the activity. The answer is that it matters a great deal. The federal government’s law enforcement resources are often very limited, and it is difficult for it to effectively enforce laws against a widespread activity like sports gambling without state support. Thus, state-level legalization can have a major impact, even if the activity in question remains illegal under federal law. Over the last few years, state legalization of marijuana has had just such a major effect, even though marijuana remains illegal under federal law.

In addition to Kennedy and Breyer, Chief Justice John Roberts and Justices Neil Gorsuch and Samuel Alito also seemed generally sympathetic to New Jersey’s position. Justice Clarence Thomas kept silent, as he does at nearly all oral arguments. But he is known for his support of very strong enforcement of constitutional limits on federal power, and it would be very surprising if he deviated from that position in this case. Overall, it seems as if New Jersey has the backing of a majority of justices, perhaps even a 6-3 or 7-2 majority (with Breyer and Kagan voting against PASPA in the latter scenario, along with the five conservative justices).

Oral argument is not a perfect predictor of the justices’ views, and it is always possible that one or more of them will change their minds. But if I were a betting man, I would say that today’s argument indicates that the smart money is on federalism.

UPDATE: A complete transcript of the oral argument is available here.