Supreme Court Strikes Down Federal Law that Prevented Gambling On Sports
States now have the authority to legalize sports gambling. The United States Supreme Court struck down the Professional and Amateur Sports Protection Act (PAPSA) on 10th Amendment and anti-commandeering grounds. Essentially, the Supreme Court ruled that the federal government could not prevent states from legalizing sports gambling. After PAPSA went into effect on January 1, 1993, it effectively prevented any state from legalizing sports gambling unless a state had already legalized it. In effect, this meant Nevada, which had vast state-sponsored sports bettors, and three other states that had more restricted betting (Delaware, Montana, and Oregon) were permitted to continue to allow sports betting, but other states were prohibited from authorizing it.
The case in which the Supreme Court struck down PAPSA via a 6-3 vote was Murphy v. National Collegiate Athletic Association. New Jersey sought to have PAPSA overturned and argued that the federal statute that prohibited modification or repeal of state-law prohibitions on private conduct, such as betting on sports, impermissibly commandeered the regulatory power of states in contravention of the Court’s ruling in New York v. United States. In that case, the Court opined “the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress’ instructions.” Similarly, the Court in Murphy opined, “PASPA regulate[s] state governments’ regulation of their citizens,” which it concluded was unconstitutional. The Court conceded that Congress can regulate sports gambling directly, “but if it elects not to do so, each State is free to act on its own.”
The ruling is a victory for New Jersey, where it is estimated that sportsbooks could bring up to $9 billion in revenue each year to the Garden State. Other states are expected to follow New Jersey’s lead, establishing sports betting as a way to raise revenue and edge out illegal operations. For example, West Virginia, which already has passed a law to permit sports betting, could have sports betting within 90 days of PAPSA being struck down. There are an additional 16 states that have legislation pending in their respective legislatures that would legalize sports betting.
Interestingly, many of the major sports organizations, such as the Professional Golfers Association of America Tour, Major League Baseball, and the National Basketball Association that were vehemently opposed to PAPSA being overturned have supported legislation in the state of Indiana that would legalize sports betting. They condition their support on the legislation, which would include a one percent “integrity fee” that would go to the leagues on whose games bets are being placed to ensure sufficient oversight against match-fixing or point shaving. However, some in the law enforcement community oppose leagues keeping such fees, as they believe they are in the best position to oversee sports gambling. For example, Chuck Canterbury, the National President of the Fraternal Order of Police stated, “Our professional leagues should focus on their sport and let us focus on enforcing the law.”
Congress did not make sports gambling a federal crime when it adopted PAPSA even though it would have been free to do so under the Constitution. Ultimately, now states and sovereign tribal nations will have the authority to decide whether or not to permit sports betting in their respective territories.