US Supreme Court Rules Federal Sports Betting Ban UnconstitutionalMay 14, 2018 6:17 pm
On Monday, May 14th, the U.S. Supreme Court overturned a federal act that for more than two decades has limited sports betting to just a handful of states in the country. As a result, individual states can now officially launch legal sports betting industries of their own if they wish, with around a dozen having already passed sports betting bills since 2016 in anticipation of the landmark ruling.
New Jersey’s challenge to the Professional and Amateur Sports Protection Act (PASPA) of 1992 was originally launched in the lower courts back in 2012, with the Supreme Court only agreeing to hear an oral argument on the case on December 4th 2017. A decision was subsequently expected sometime before the end of June, but today the country’s highest legal court delivered its favorable opinion with 7 of 9 justices deeming the federal ban on sports betting to be unconstitutional.
The majority opinion was delivered by Justice Samuel Alito, with other Justices also lending their support to the decision including Kennedy, Roberts, Kagan, Thomas, Gorsuch, and Breyer. In fact, the only two justices voting against legal widespread sports betting were Sotomayor and Ginsburg. Following its positive ruling, the Court subsequently declared:
“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.”
Murphy v. NCAA
In 2012, former New Jersey Governor Chris Christie tried to circumvent PASPA by passing a bill legalizing sports betting in his state, invoking a quick legal response from major sports leagues preventing the Garden State from implementing the new law. The following year, the Third Circuit Court of Appeals sided with the sports leagues, and despite the Supreme Court initially deciding not to accept the case, it eventually agreed to hear New Jersey’s arguments at the end of 2017.
In 2018, Phil Murphy subsequently replaced Christie as the Governor of New Jersey, after which the legal case was then known as Murphy v. NCAA (National Collegiate Athletic Association).
Nevertheless, NJ Gov. Phil Murphy thanked both former politicians State Sen. Ray Lesniak and Chris Christie for their “incredible bipartisan effort” in getting PASPA struck down, with Gov. Murphy saying that he was now looking forward to “working with the legislature to enact a law authorizing and regulating sports betting in the very near future.”
Presenting its best case scenario for the USA’s sports betting market, research firm Eilers & Krejcik Gaming predicted that thirty-two states offering legal sports betting by 2023 would result in revenue of $6.03 billion per year. Nonetheless, other sources estimate that the market would be worth considerably more. In 2017, for instance, Nevada alone reported $4.8 billion in sports bets, with DraftKings CEO Jason Robins asserting that around $150 billion is currently being wagered illegally each year through black market bookmakers.
Up until now, just Nevada has been allowed to offer regulated sports betting, with Oregon, Delaware, and Montana permitted to offer only limited parlay bets.
Following the Supreme Court ruling, these three states are expected to be amongst the first wave of states to take advantage of the windfall by changing their laws to correspond with the enacted legislation. New Jersey, of course, will also be a front-runner, with the New Jersey Division of Gaming Enforcement having already publicly announced its intention to approve regulation within 90 days of the ruling, and to have online sites operational before the end of this year.
In the meantime, dozens of other states will now be motivated to set up regulated sports betting markets of their own as soon as possible, including a number who have already put laws in place facilitating a quick launch, such as Connecticut, New York, Pennsylvania, West Virginia and Mississippi.