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Volume 26 No. 7
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Supreme Court Strikes Down PASPA, Opens Door To Sports Gambling

The ruling is expected to open up the floodgates for legalized sports betting nationally
Photo: GETTY IMAGES

The U.S. Supreme Court this morning struck down federal restrictions against sports betting, opening the door that industry analysts predict most states will walk through in the coming years. In a ruling that nullified the 26-year-old Professional & Amateur Sports Protection Act of '92 (PASPA), the court ruled that while the federal government has the authority to regulate or prohibit sports betting, it did neither through PASPA, opening the opportunity for states to do so if they choose. Five justices joined Samuel Alito in the majority opinion, with Justices Ruth Bader Ginsberg, Sonia Sotomayor and Stephen Breyer dissenting. Gaming analysts have predicted that 14 states will sanction sports betting by '20, with the market growing to 32 states within five years. New Jersey, West Virginia, Mississippi, Pennsylvania, New York and Delaware already have passed legislation in anticipation of a ruling. More than a dozen others considered, or are considering, similar bills this year (Bill King, Staff Writer). USA TODAY's Richard Wolf writes the Court's action "could jump-start action in Congress to pass legislation calling for federal regulation of sports betting -- something the sports leagues would prefer over separate rules from state to state" (USATODAY.com, 5/14).

IMMEDIATE IMPACT EXPECTED: Sports and gaming law attorney Daniel Wallach in a special to the N.Y. POST writes the ruling is "expected to open up the floodgates for legalized sports betting nationally." As an "immediate result of today’s ruling, New Jersey (which had been prevented from implementing its sports betting law because of a lower federal court injunction) can now proceed with its plans to allow single-game sports betting." Monmouth Park is expected to be "one of the first New Jersey gambling venues to offer sports betting, perhaps as soon as two weeks from now" (NYPOST.com, 5/14). The ruling is "expected to provide a much-needed alternative revenue stream" in Monmouth Park's "struggle to survive amid the rising tide of competition from tracks in neighboring states, flush with casino-generated dollars to supplement purses and operations" (APP.com, 5/14). New Jersey state officials have sought to legalize sports betting since '11, seeing it as a "way to improve the fortunes of Atlantic City, which had seen several casinos close, as well as the state's struggling race tracks." The state's attempt to legalize sports betting was "strongly opposed" by President Trump, as well as by the NCAA and the four major pro sports leagues, even as "some of the leagues partnered with daily fantasy sports operations." Only Nevada, Delaware, Montana, and Oregon previously "could offer sports betting." The Third Circuit had thrown out a '14 state law "attempting to get around the federal prohibition by allowing New Jersey's casinos and racetracks to offer betting without the state approving or regulating the activity" (NJ.com, 5/14).

NEW JERSEY READY TO POUNCE: NBCNEWS.com's Pete Williams notes New Jersey officials said that they "would allow only certain types of sports betting, at casinos and racetracks, with a minimum age of 21 to participate" (NBCNEWS.com, 5/14). Participants in New Jersey "will be able to bet in brick and mortar casinos in Atlantic City, along with racetracks." Eventually, mobile wagering "could be offered and a fan could place a bet from the comfort of his couch" (MLIVE.com, 5/14). In New Jersey, Steve Politi writes, "Imagine a day when hundreds of Giants fans are placing that legal bet from their seats inside MetLife Stadium as their favorite team prepares to take the field for the opening kickoff." Politi: "It's coming" (NJ.com, 5/14).

PRO LEAGUES HAD SUPPORTED LAW: The AP's Jessica Gresko notes the NBA, NFL, NHL, MLB, NCAA and the federal government had "urged the court to uphold the federal law." The pro leagues in court had "argued that New Jersey's gambling expansion would hurt the integrity of their games." However, outside court, leaders of "all but the NFL have shown varying degrees of openness to legalized sports gambling" (AP, 5/14). ESPN.com's Brian Windhorst notes the NBA and MLB have "been on the ground" in all of the states seeking to legalize sports betting as they "combine resources to lobby to get language that would assure them of a gambling revenue stream for years to come." They have "hired high-priced lobbying firms, submitted written statements and sent executives to testify in statehouses." All the pro sports leagues, including the PGA Tour and the NCAA, have "been involved, but it has been the NBA and MLB that have been the tip of the spear." NBA Senior VP & Assistant General Counsel Dan Spillane in January asked for leagues to get a 1% "cut off the top from all sports wagers were it to be legalized." Spillane said that the NBA "would be deserving of the money because it would have to pay for 'integrity' services" to watch for "match fixing or other betting irregularities that could threaten the game" (ESPN.com, 5/14). In DC, Rick Maese writes while all of the leagues "will likely take on added costs -- education, monitoring and investigations, for example -- they could also stand to make plenty of money through new partnerships and business opportunities" (WASHINGTONPOST.com, 5/14).

IMPACT ON NFL: PRO FOOTBALL TALK's Michael David Smith writes the ruling "will be very good for the NFL’s business, regardless of whether the NFL embraces gambling or continues to distance itself from it." That is because "there’s going to be a huge increase in the number of people placing bets on NFL games this year, once they can do so at safe, legal, legitimate businesses in their own states." And an increase in the number of people placing bets on NFL games "will lead to an increase in the number of people who care about NFL games." That "could mean a reversal of the league’s declining television ratings" (PROFOOTBALLTALK.com, 5/14). Wizards and Capitals Owner Ted Leonsis said, "This should reinvigorate the NFL and drive value into teams. You have 11 players on defense and offense, each doing a discrete action, and then there’s 30 seconds in between plays. Now all of a sudden football can be reborn. Basketball, there's so much scoring. Three-point shots, foul shots, layups, what are they calling after time-out” (“Squawk Alley,” CNBC, 5/14).

NO REAL CHANGE IN COLLEGE: In New Jersey, James Kratch notes Rutgers AD Pat Hobbs said that the ruling "will not bring any drastic changes in how Rutgers approaches sports betting." NCAA bylaws "prohibit wagering on sporting events (or association with those who do) by anyone connected to college athletics" and the ruling "won't change that." NCAA rules "prohibit athletes and coaches at all competition levels, as well as any employees of an institution's athletics department, a conference office or the NCAA's national office, from betting on sports" (NJ.com, 5/14).

For SportsBusiness Journal’s comprehensive coverage prior to the Supreme Court decision, click here.