Supreme Court Strikes Down Federal Sports Gambling Law

Sheppard Mullin Richter & Hampton LLP

Sheppard Mullin Richter & Hampton LLP

On Monday, the Supreme Court opened the door for states across the country to authorize sports gambling within their borders—a decision that could have a dramatic effect in the world of sports and potentially weaken the federal government’s authority over states on a number of fronts.

In Murphy v. National Collegiate Athletic Association, No. 16-476, the Court struck down the Professional and Amateur Sports Protection Act (PASPA), a 26-year-old federal law that banned most states from legalizing sports betting. The Court held that PASPA unconstitutionally “commandeered” the states to enforce federal laws or policies in violation of the 10th Amendment.

Writing for the majority, Justice Samuel A. Alito Jr. acknowledged that the issue of whether to legalize sports gambling “is a controversial subject” with good policy arguments on either side. However, he determined that Congress—while free to regulate sports gambling directly—cannot force states to do so, and that the PASPA provision in question was a “direct affront to state sovereignty.” On the other side, dissenting Justices Ruth Bader Ginsburg and Sonia Sotomayor argued that the decision was too broad. “The Court wields an ax … instead of using a scalpel to trim the statute,” Justice Ginsburg wrote.

The Court’s ruling will have a significant economic impact on a number of states that are already eager to collect tax revenues associated with legal sports gambling.

The decision could also shift the existing power dynamic between states and the federal government by buttressing 10th Amendment challenges to federal action. For example, enforcement efforts related to federal marijuana laws might be more easily challenged under the 10th Amendment in states where the drug is legal. Similarly, challengers to recent federal immigration enforcement efforts involving so-called “sanctuary cities” will certainly latch onto this decision. The impact of this case could be far-reaching, as any number of industries that implicate federal funds or laws could be impacted.

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.

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