The US Supreme Court Just Gave States The Green Light To Regulate Sports Betting

The Supreme Court Just Gave States the OK

June 18th, 2018   |   Updated on December 17th, 2020

It’s official: A 1992 federal law prohibiting sports betting across most states in the US has now been overturned. The case was brought to the highest court in the land by the state of New Jersey.

Case #16-476 between Murphy, governor of New Jersey and the National Collegiate Athletic Association was argued before the Supreme Court of the United States between December 4, 2017 and May 14, 2018.

The Supreme Court Just Gave States the OK

PASPA (The Professional and Amateur Sports Protection Act) of 1992 was effectively rendered invalid. Now, the Supreme Court has paved the way for the potential legalization one of the biggest betting industries in the world.

Gambling aficionados estimate that $150 billion – $200 billion in gray market sports betting activity takes place annually. SCOTUS’s decision to put the issue of sports betting in the hands of states is a major victory for the pro-gambling lobby.

The Supreme Court Just Gave States the OK

New Jersey was handed a favorable ruling from the Supreme Court, and one which raised eyebrows and sent shockwaves throughout the nation. Sports gambling has heretofore been the exclusive domain of a handful of states, Nevada chief among them.

The ramifications of this legislative ruling have far-reaching implications for all forms of gambling and online gambling  activity.

25 years ago, in 1992, Congress passed legislation effectively banning sports betting in all but a few states. This law was deemed to be unconstitutional by most of justices on the Supreme Court bench.

The Supreme Court Just Gave States the OK

The 6-3 ruling now makes it possible for multiple states, including Nevada to permit legal sports betting. It also means that sports aficionados will no longer have to frequent offshore sports betting sites to place their bets.

While this might not bode well for Las Vegas’ virtual monopoly on sports betting a.k.a. March Madness and the Super Bowl, it certainly opens the entire market up at state level.


What Law Was Overturned and How Does This Impact States?

The Supreme Court Just Gave States the OK

PASPA (The Professional and Amateur Sports Protection Act) was dealt a death blow by the Supreme Court justices. This law effectively banned sports gambling at state level. At the time of its passage, PASPA was deemed necessary by the sports betting industry and lawmakers.

SCOTUS decided this law unconstitutional as it effectively planted federal officers at state legislature level and allowed  them to overturn state rulings. The Justice writing for the majority, Samuel A.

Alito Junior was quoted as saying, ‘A more direct affront to state sovereignty is not easy to imagine….’ While the 6-3 decision was a clear victory for sports betting proponents, the 3 dissenting voices – Justice Stephen Breyer, Justice Sonia Sotomayor, and Justice Ruth Bader Ginsburg were less enthusiastic about a hands-off approach by the feds.

Alito added, ‘… Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution.’

The Supreme Court Just Gave States the OK

Former GOP governor of New Jersey, Chris Christie was excited that SCOTUS had overturned PASPA. He tweeted, ‘… A great day for the rights of states and their people to make their own decisions.… I’m proud to have fought for the rights of the people of New Jersey.’

The incumbent Democratic governor, Murphy celebrated the news, and the New Jersey governor recently signed a bill that permits sports gambling after the Supreme Court ruling.

The bill was signed into law on Monday, 11 June 2018, and New Jersey now becomes the second state after Delaware to allow sports betting since the SCOTUS decision.

Now, the federal government will not be standing in the way of states wanting to legislate sports gambling. Legal scholars and gambling experts anticipate that most states will take up the cudgels and move swiftly to legislate sports betting.

Failure to do so would result in valuable tax dollars going elsewhere and no states are willing to make that sacrifice.

The Supreme Court Just Gave States the OK

To date, several states including West Virginia, New York, Pennsylvania, Connecticut, and Mississippi have passed some form of sports betting legislation, and at least 12 other states have introduced similar legislation.

The director of the sports law program at Tulane Law school, Gabriel Feldman believes that the Supreme Court decision will completely change the perception of sports.

Fans will likely now be more invested in their teams by way of sports betting, and will take a much greater interest in sports.

The recent decision is also likely to have multiple knock on effects for related industries including media companies, especially those with connections to the MLB, NHL, NFL, NBA and so forth.

The Supreme Court Just Gave States the OK

With fans taking an active interest in sports gambling, there are plenty of additional revenue sources waiting to be tapped. Of course, the decision to leave the legalization of sports gambling to the states is not being celebrated by everyone.

The MLB questions things like player safety, ethics, and legality when gambling is brought into sports. People are rightly concerned that legalized gambling may lead to questionable conduct on the sports field, such as match fixing and corruption.

However, this has always been a potential reality with the existence of a thriving illicit market in sports betting.

The Supreme Court Just Gave States the OK

The ruling by the Supreme Court was a major defeat to the NHL, NFL, NBA, MLB and the NCAA, however these organizations are willing to make the necessary changes and become proactive in ensuring the integrity of sports with sports betting.

Indeed, the commissioner of the NBA, Adam Silver is in favor of legalized sports betting since he believes it will bring greater accountability to the market. In the absence of a decision taken by Congress, all sports betting-related activity is determined at state level.

After the SCOTUS ruling, the NFL and the NBA reacted by calling on Congress to pass legislation on sports betting. The arguments for and against legalized sports betting are strong, however, it will be up to Congress to decide whether it wishes to get involved, or to leave the issue to individual states.


Will the Supreme Court Decision Lead to State Legislation for Online Casino Gambling?

The Supreme Court Just Gave States the OK

It’s important to understand the role of the Supreme court and the role of Congress when it comes to legislation.

There are 3 branches of government in the United States: the executive branch, the judicial branch, and the legislative branch.

Each of these branches is designed to operate independently of the others to prevent the corruption of government. The president of the United States controls the executive branch and enforces laws that Congress makes. The legislative branch a.k.a. Congress is responsible for making laws.

The Supreme Court Just Gave States the OK

There is a Senate and a House of Representatives. The judicial branch a.k.a. the Supreme Court and the 9 justices on the bench simply interpret the laws of the country based on the U.S. Constitution.

In the absence of a law passed by Congress, the Supreme Court decision on sports betting simply leaves the matter up to individual states.

Recall that New Jersey invoked the anti-commandeering principal at federal level to protect its right to regulate sports betting at state level. However, if Congress decides to legislate sports betting, the Supreme Court will honor that decision too.

The Supreme Court Just Gave States the OK

Given that Congress has opted – for now – to remain on the sidelines, individual states have taken it upon themselves to determine the legality of sports betting. There are many instances of increased liberalization of online gambling legislation across the US.

To date, New Jersey, Nevada, Delaware, and Pennsylvania have moved to legalize online gambling. The May decision to leave it up to individual states vis-à-vis sports betting is a major victory for the online casino industry.

The Supreme Court Just Gave States the OK

The precedent has been set, and it looks like online casino gaming will take its cue from the Supreme Court decision. We have already seen how successful online casinos can be, such as 888 casino in NJ, , and this has spurred interest in widespread legalization of the industry.

Even while all this hullabaloo is taking place, many states across the nation are debating the merits of legalizing online casinos. Frameworks are in place, and precedents have already been set with successful states like New Jersey, Delaware, and Nevada.

There is no doubt that lawmakers at state level realize the merits of regulated online gambling, and they are looking to add necessary tax dollars to the budget through this type of activity.

New Jersey is the gold standard for online casino gaming, but many other states have far greater markets to tap into, notably California, Pennsylvania, Illinois, et al.