Supreme Court Allows States to Parlay Laws Into Moneyline of Sports Betting

by Ballard Spahr LLP
Contact

Ballard Spahr LLP

The U.S. Supreme Court this week struck down a federal law that prohibits most states from allowing gambling on competitive sporting events. The Court's May 14 ruling in Murphy v. NCAA has significant potential implications for gaming companies as well as sports teams and leagues, depending on how Congress responds.

The Court held that the Constitution’s anticommandeering principle prohibits Congress from giving direct orders to state legislatures or from dictating what a state legislature may do regarding sports betting. Now that the Supreme Court has found the Professional and Amateur Sports Protection Act (PASPA) (28 U.S.C. § 3701, et seq.) to be unconstitutional, states are free to pass laws regulating—and potentially taxing—sports gambling. Indeed, several states, including New Jersey, New York, Pennsylvania, West Virginia, and Mississippi have already enacted legislation to legalize and regulate sports betting within their jurisdictions. Additional states, such as Oregon, Delaware, and Rhode Island, also appear to be making substantial preparations for sports betting through their lotteries.

It is possible that legislation similar to PASPA will return, however. Immediately after the Supreme Court issued its ruling, Senator Orrin Hatch, one of the original authors of PASPA, stated his intention to introduce legislation to replace PASPA. It remains unclear exactly what form this legislation will take. Congress could criminalize or regulate sports betting on a national level.

Professional sports leagues also have been preparing for this outcome after the justices appeared poised to strike down PASPA following oral argument in December. Although the National Basketball Association (NBA) and Major League Baseball (MLB) appear open to state laws legalizing sports betting, the National Football League immediately called on Congress to return to the drawing board to draft new legislation. The National Collegiate Athletic Association has yet to adopt a firm position, apparently taking a wait-and-see approach.

Typical estimates put the value of illegal sports betting in the United States at around $100 billion. While it is too early to know the exact effects of the Murphy decision, one thing is clear: all interested stakeholders will jockey for a piece of this potential new revenue source. Representatives from MLB and the NBA have previously floated the idea of states imposing a small tax on sports wagers to be paid to the leagues to cover “integrity” services, such as increased compliance and monitoring costs due to more betting. Players’ associations and their members will want a cut of these increased revenues as well. And, while it is unclear what effect more betting will have on day-to-day team operations, it is widely believed that team valuations will see a net positive effect.

New state taxes and regulations on sports betting would have substantial implications for gaming company operations, including immediate costs of complying with a patchwork of new state licensing and taxation regulations. It is also possible that states rushing to develop their own regulations in light of Murphy may find their laws preempted by Congress shortly thereafter. We will continue to keep a close watch on developments and will issue timely updates.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Written by:

Ballard Spahr LLP
Contact
more
less

Ballard Spahr LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.