The US Supreme Court’s new sports-gambling decision is all about states’ rights

Betting on athletics is already legal in Nigeria, and may soon come to a US state near you.
Betting on athletics is already legal in Nigeria, and may soon come to a US state near you.
Image: Reuters?Afolabi Sotunde
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New Jersey is the official winner today, but you can bet big bucks that states and gamblers will be celebrating today’s (May 14) US Supreme Court decision in Murphy vs. National Collegiate Athletic Association (pdf).

The case centers on the 1992 Professional and Amateur Sports Protection Act (PASPA), which prohibits states from authorizing sports gambling, as New Jersey did to a limited extent in 2014. PASPA allows the US attorney general, as well as professional and amateur sports organizations, to file civil suits against states that institute betting—whether through a lottery, sweepstakes, or “gambling, or wagering scheme”—on competitive sporting events. The National Collegiate Athletic Association in 2014 exercised that privilege in district court, suing the state of New Jersey for attempting to repeal a state prohibition on sports betting, and won.

New Jersey (helmed by governor Philip Murphy) appealed, arguing that PASPA is invalid because it tells states what to do in violation of the US Constitution’s “anti-commandeering principle,” which limits the federal government’s ability to intrude on state legislative activity. The Third Circuit Court of Appeals affirmed the district court. New Jersey then sought review from a panel of eight Third Circuit judges, who in 2016 agreed with colleagues, holding that PASPA didn’t commandeer states. Next, New Jersey petitioned the Supreme Court for review.

The PASPA statute was enacted to protect the integrity of sports themselves, as well as the best interests of athletes and fans. According to the Supreme Court’s majority opinion, one of the rationales for enacting that statute was that wagering on athletics is a particularly pernicious form of betting because it can turn passionate young sports fans into gamblers.

The only problem for those opposed to legal sports betting, according to the country’s highest court, the statute does violate the US constitution’s anti-commandeering principle. As such, Congress would have to find some other way to make athletic wagers illegal, rather than prohibiting states from doing so through this statute.

In its 7-2 decision, the Supreme Court explains that the statute intrudes on states’ right to regulate themselves, and gives Congress control it doesn’t actually have under federal law. “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,” the ruling says of PASPA. “A more direct affront to state sovereignty is not easy to imagine.”

While the majority opinion admits that legalizing sports gambling is “a controversial subject,” it essentially did just that today by finding for New Jersey. More precisely, the SCOTUS decision removes impediments to states that may wish to allow legal betting. As a result of today’s decision, state legislatures beyond New Jersey may decide to enact laws allowing athletic wagering.

As the Supreme Court judges noted, supporters of sports gambling argue that legalization will undermine illegal wagering and help states raise much-needed revenue. Opponents argue that legalized sports betting is likely to “encourage people of modest means to squander their savings and earnings and corrupt professional and college sports.”

Nonetheless, the federal government can’t regulate the activity through a statute that tells states what they can or cannot do, the majority opinion says. It concludes:

The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.

Athletic leagues have already been preparing for prospective state law changes, with the thinking that wagering will create a money-making opportunity for them. The National Basketball Association, for example, outlined its position in January, demanding in its proposed plan for gambling legalization 1% of every wager, plus other rules that would allow it to profit from athletics betting. Dan Spillane, an NBA attorney, said in a statement to New York lawmakers, “Our conclusion is that the time has come for a different approach that gives sports fans a safe and legal way to wager on sporting events while protecting the integrity of the underlying competitions.”