States are free to allow sports betting, U.S. Supreme Court rules

Author: Robert Barnes, The Washington Post - May 14, 2018 - Updated: May 14, 2018

In this March 15, 2018 photo, people watch coverage of the first round of the NCAA college basketball tournament at the Westgate Superbook sports book in Las Vegas. The Supreme Court has struck down a federal law that bars gambling on football, basketball, baseball and other sports in most states, giving states the go-ahead to legalize betting on sports. (AP Photo/John Locher)

The U.S. Supreme Court on Monday struck down a federal law that kept most states from authorizing sports betting, a ruling that is sure to set off a scramble among the states to find a way into a billion-dollar business.

The challenge was brought by New Jersey, which had said it could be ready within weeks of a favorable decision to offer sports betting at its racetracks and casinos. Other states are expected to act quickly as well.

The court’s 6-3 decision struck down the Professional and Amateur Sports Protection Act (PASPA), which Congress passed in the early 1990s to protect the integrity of sports, according to its sponsors.

Only Nevada’s sports wagering industry was protected by the law, which said it was unlawful for other states to authorize such gambling.

But the court’s majority on Monday said that violated states’ rights to make their own decisions, when Congress itself has not passed a law regulating an activity.

“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make,” wrote Justice Samuel A. Alito Jr., for the majority.

“Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”

Justices Ruth Bader Ginsburg and Sonia Sotomayor said the law did not need to be struck down, and Justice Stephen G. Breyer agreed with them in part.

The gambling industry was excited by the decision.

“Today’s ruling makes it possible for states and sovereign tribal nations to give Americans what they want: an open, transparent, and responsible market for sports betting,” American Gaming Association President Geoff Freeman said in a statement.

“Through smart, efficient regulation this new market will protect consumers, preserve the integrity of the games we love, empower law enforcement to fight illegal gambling, and generate new revenue for states, sporting bodies, broadcasters and many others.”

New Jersey for years has tried to breathe new life into its troubled casinos and racetracks by authorizing sports betting at the facilities.

As of now, PASPA allows live betting on sports events only in Nevada facilities, while a handful of other states have sports lotteries.

Former New Jersey governor Chris Christie (R) was one of the leaders of the effort to authorize sports betting in his state. Current Gov. Phil Murphy (D) has continued the fight.

“I am thrilled to see the Supreme Court finally side with New Jersey and strike down the arbitrary ban on sports betting imposed by Congress decades ago,” Murphy said.

“New Jersey has long been the lead advocate in fighting this inherently unequal law, and today’s ruling will finally allow for authorized facilities in New Jersey to take the same bets that are legal in other states in our country.”

The case is a high-stakes clash between states that want a piece of the action — New Jersey is supported by 18 other states — and the NCAA, the National Football League, Major League Baseball and other professional sports leagues. They contend that the federal ban is necessary to protect the integrity of their games.

The underground sports betting economy in the United States is estimated to be worth at least $150 billion a year.

New Jersey voters in 2011 approved a referendum proposal to allow sports betting. Christie signed a law authorizing it and dared the federal government to “try to stop us.”

Courts did. They said New Jersey’s law violated a section of PASPA that forbids states to license and authorize sports betting. The Supreme Court decided not to review that ruling.

New Jersey tried a different tactic, taking advantage of a passing comment from the U.S. Court of Appeals for the 3rd Circuit. While the state could not authorize sports betting, the court said, nothing in the federal law prevented the state from repealing statutes that imposed criminal penalties on the practice.

So New Jersey tried that, but lower courts said the state’s intention was the same prohibited activity.

Alito issued a strong statement objecting to the way Congress tried to outlaw sports betting–not by directly confronting the issue but by keeping states from passing laws authorizing sports betting or by getting rid of laws that prohibited it.

That violated states constitutional protections against being “commandeered” by Congress to do something, Alito said.

“It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals,” Alito wrote. “A more direct affront to state sovereignty is not easy to imagine.”

The case is Murphy v. NCAA.

Robert Barnes, The Washington Post