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PASPA And It’s Implications On Legal Sports Betting In The US

Book Of LawSports betting is one of the most lucrative industries worldwide. However, the United States missed out on the benefits for a long period of time due to a federal ban known as the Professional and Amateur Sports Protection Act, or PASPA. Under PASPA, 46 states were barred from hosting any type of regulated brick-and-mortar sports betting activity.

In May of 2018, the United States Supreme Court found this law to be unconstitutional and it was effectively repealed.  American-based sports betting is now in the hands of each individual state as it should have been all along. With the repeal of PASPA, which altered the application of the Federal Wire Act, sports betting laws in the US no longer impose the previously endured draconian ban on sports gambling entertainment.

Here we provide a breakdown of PASPA, including its origin and how it affected the US sports betting market. You will also find information on which states have already launched their own sports betting industries and other efforts to legalize sports betting in the United States.

Update On Paspa - May 14th, 2018

PASPA was repealed by a historic ruling by the United States Supreme Court who determined that the law does violate the Constitution of the United States.  New Jersey has been involved in an ongoing case in opposition to the professional sports leagues after an attempt made by the state to legalize state-regulated sports betting. New Jersey's victory has far-reaching implications for all states that seek to legalize sports betting.  As developments unfold we will provide updates to this page.

Where Did PASPA Come From?

PASPA, otherwise known as the Bradley Act, was passed back in 1992 in an effort to thwart the rise of sports betting in the US. The law was named after its main sponsor, Senator Bill Bradley of New Jersey. Gambling expansion was on the rise at the time, with South Dakota, Iowa, Colorado, Illinois, Mississippi, Louisiana and Missouri all legalizing casinos in the years leading up to PASPA. Before South Dakota legalized casino gambling in 1989, only Nevada and New Jersey had any sort of legal commercial gambling.

Which States Were Exempt From PASPA?

The only four states exempted from the federal ban on American sports betting are Nevada, Delaware, Montana and Oregon. These states were exempt from the ban because they already some form of sports betting already in place. Nevada is the center of American sports betting action. Las Vegas is the only location in the country where you can walk into a brick-and-mortar sportsbook and place single-game wagers.

New Jersey was given a year to implement state-regulated sports betting and also be designated as exempted from the law. However, the state failed to take advantage of this window of opportunity and was therefore forced to comply with the law's prohibition on sports betting.

Oregon had something called Sports Action that ran through the state Lottery. It was a parlay card system that offered NFL betting lines in its first year, then added the NBA in its second. Sports Action was not very successful regarding sales and also prompted a lawsuit from the NBA.

The NFL and NCAA held the state to ransom by saying Oregon would never have a professional franchise or any major NCAA tournaments as long as Sports Action was operational. The state finally caved and ceased NFL betting lines after the 2007 season.

The Delaware Lottery also ran a parlay card system on NFL games. Their system was not pulling in enough revenue to justify its existence, so it was discontinued after one season. In 2009, the state attempted to introduce Nevada-style sports betting as a way to jumpstart their economy, but the NFL, NHL, MLB, NBA and NCAA took legal action against them.

The Third Circuit Court of Appeals ruled that Delaware could not introduce any sort of new sports betting under their exemption from PASPA. Delaware can only host sports betting options that were present before PASPA went into effect, which means parlay cards.

Montana was different from the other states because they didn’t have any sort of Lottery parlay system or single-game wagering. Their exemption came via a sports pool law that allows establishments licensed to sell alcohol to provide betting square contests. These establishments do not take any portion of the prize pool.

Did PASPA Apply To Online Sports Betting?

No. PASPA only applied to US brick-and-mortar sports betting. Until PASPA's repeal, the Federal Wire Act dealt with US-based online sports betting. However when PASPA was struck down, the online sports betting prohibition imposed by the Wire Act no longer applied. The UIGEA is another federal law that has to do with online gambling but does not criminalize sports betting or any other form of licensed online gambling.

Had There Been Any Attempts To Repeal The Professional and Amateur Sports Protection Act?

While there was a growing wave of resistance to the federal ban since it became law 25 years ago, it wasn't until New Jersey decided to push back against the law that any formal effort was made to address the law's unfair application.  Once NJ moved forward their efforts to legalize sports betting at the state level, several states drafted legislation in anticipation of the law being repealed as opposition to the law grew.

New Jersey led the anti-PASPA movement and through a lengthy legal battle with the NFL, NBA, NHL, MLB, and NCAA, ended up before the US Supreme Court. SCOTUS heard the case and in May 2018 ruled in favor of New Jersey, opening the floodgates to legal sports betting in the United States.

Are There Legal Forms Of Domestic Sports Betting In The US?

Yes, multiple states legalized sports betting in anticipation of a favorable ruling from SCOTUS regarding PASPA.  Their diligence paid off as they were able to launch their sports betting initiatives very quickly after the law's repeal.

Multiple states have legalized sports betting within their borders, though not all have launched their sportsbooks yet. Regions that have launched either online, brick and mortar or both types of sports betting include the following states, though we expect this list to grow quickly as many states have pending legislation:

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