On May 14, 2018, the United States Supreme Court issued an opinion with nationwide ramifications that could create a potentially massive new industry. In Murphy v. National Collegiate Athletic Association, the Court found that the Professional and Amateur Sports Protection Act (PASPA), a 1992 federal law that purports to make it unlawful for states “to sponsor, operate, advertise, promote, license, or authorize . . . a lottery, sweepstakes, or other betting, gambling, or wagering scheme based . . . on” competitive sporting events, violates the “anticommandeering” rule created by the US Constitution’s Tenth Amendment. PASPA contained “grandfather” provisions that allowed certain historical sports betting programs in a limited number of states, including Nevada, which had been in place before PASPA, to continue. The Court held that, because PASPA dictates what state legislatures may and may not do, rather than make sports betting itself a federal crime by regulating private actors, the law impermissibly infringed on state’s rights under the Constitution’s dual sovereignty system.
The direct implication of the case is that New Jersey’s 2014 law (2014 N. J. Laws p. 602) repealing a prior sports betting prohibition in the state no longer violates federal law. This gives New Jersey something of a head start in implementing legal sports betting [1], but the ruling applies equally to any other state that similarly decides to permit sports betting. With further action required by state legislatures (other than New Jersey) to implement state sports betting programs, and with the Supreme Court signaling that Congress could still act to directly prohibit sports betting, the long term impacts of the ruling are far from certain and will develop over a number of years. Nevertheless, gaming and sports industry participants are already anticipating widespread change in the near term, with some sources predicting that sports betting could be legal in more than half of the states within five years.
[1] The New Jersey legislature is said to be in the process of creating regulations to govern sports betting in the state.
