Monday, May 14th, 2018, the Supreme Court of the United States voted in favor of New Jersey casinos when it ruled that the Professional and Amateur Sports Protection Act (PASPA) violates constitutional rights. In a 7-2 decision, the SCOTUS knocked down federal restrictions that limited 46 states from offering sports betting. It is now believed that states will have the right to legalize domestic sports betting operations but for now the US is in a grey area. Now that the PASPA act is out the door, Congress has the option to regulate sports betting federally, but if it elects not to do so, states will have the power to implement sports betting however they choose to do so.
This case began when New Jersey elected to pass a state law allowing sports betting at their Atlantic City casinos. This action violated the current American gambling laws and professional and college sporting leagues didn’t take to kindly to the news. Over the past decade many casinos in Atlantic City have struggled to produce enough revenue and as a result, some of the major casinos have closed. Even US President Donald Trump has a rundown, closed, massive casino in Atlantic city set to be demolished. Once the state law was passed the NCAA, NFL, NBA, MLB and NHL all sued the New Jersey under the PASPA act. New Jersey lost the civil case but quickly appealed to the Supreme Court. The SCOTUS stated that they would have a decision in the case by summer 2018 and released their decision a month or so early.
The PASPA act was enacted in 1992 after multiple states started lobbying for casino gambling. Lawmakers believed that a ban on sports betting would delay any sort of legislation to allow it in casinos. The PASPA act also blocked potential revenue for casinos in the hopes that fewer casinos would open across the US. When the PASPA act was first enacted states that had casinos were given a 1-year window to enact a sports betting operation or else they would fall into the ban. At the time the PASPA act was spearheaded by the New Jersey Senator Bill Bradley, who even had the act named after him in its initial stages “Bradley act”. Before the SCOTUS decision came on Monday, there were only 4 states exempt from the PASPA act; Nevada, Delaware, Montana, and Oregon. They were only exempt because they already had domestic sports betting operations in place.
Now that the PASPA act is on its way out the door, there is real belief that the Federal Wire Act could be next. The Federal Wire Act bans US-based online sports betting by outlawing all bets placed through a wire transmission. Originally intended to fight mob activities, the law blocked the exchange of bets and gambling information between the states. In 2002, the Federal Wire Act was under scrutiny when the act was ruled to cover online sports betting, but no agreement could be reached about online casino games. The Federal Wire act has changed over time, but it would be no surprise to see this act get dragged to the SCOTUS next.
Now that the SCOTUS decision is out and in favor of states ridding the PASPA act, we will have to wait and see if Congress decides to federally regulate sports betting or if they will let the states decide how they want to regulate the industry. The professional sports leagues want federal regulation and an integrity fee of 1% but we will have to wait and see what Congress decides. Congress still has to option to enact a federal ban on professional sports betting that would trump any state laws in existence. Many states have already drawn up legislation in the hopes that the PASPA act would be lifted. If Congress decides to leave it up to the states, there is no way the leagues are going to get their integrity fee. You must remember professional sports are one of the USA’s most profitable industries. Recently the Miami Marlins (MLB) paid 1 player (Giancarlo Stanton) $325 million for a 13-year contract and there are several other similar contracts out there. Sports is big money and the casinos are wanting their cut. Once the SCOTUS decision was announced the NFL immediately called on Congress to step in and provide regulation.
Since New Jersey won their case they will be able to have legal sports betting within the next couple of weeks or however long it takes for them to get their systems in place. Other states that have already passed laws will likely have legal sports betting within the next couple of months. While all other states on board will have to enact laws and set up systems before they can have legal sports betting.