Sports Betting Myth Busters: Only Four States Are Exempt From The Federal Ban

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Sports betting myth busters

Editor’s Note: The US Supreme Court is currently deliberating the constitutionality of the partial federal sports betting ban embodied in the Professional and Amateur Sports Protection Act (PASPA).  In a three-part series, Legal Sports Report takes a “myth buster” approach and probes several oft-mentioned aspects of PASPA.

This first installment of the series explores whether PASPA exempts four states — or some other number of jurisdictions — from its restrictions. Part two is here; part three here.

Since 2012 — when the NCAA, NFL, NBA, NHL, and Major League Baseball first sued New Jersey Gov. Chris Christie over the state’s attempt to legalize sports betting — judges and lawyers have repeatedly told us that only Nevada, Delaware, Oregon and Montana are exempt from PASPA’s grasp.

The judges and lawyers are wrong.

Archived documents obtained by Legal Sports Report reveal that individual members of Congress — including those who sponsored or supported PASPA — had no concrete idea about what states were actually excluded from the law’s blanket ban on state-sponsored sports betting.

From golf calcuttas in Wyoming to parimutuel bicycle races in New Mexico, no fewer than five other states were specifically identified by those in Congress as being exempt from the federal sports betting ban.

PASPA’s grandfather clause

In the text of the law (see §3704), no states are listed by name as being exempt from PASPA.  Not Delaware, Oregon or Montana. And not even Nevada.   

Instead, Congress chose to reference varying time periods and state laws that were already in place.

For example, the portion of PASPA that is generally understood to provide a carve-out for Nevada references any sports betting scheme that was:

authorized by statute as in effect on October 2, 1991 [and] actually was conducted…at any time during the period beginning September 1, 1989, and ending October 2, 1991.

Such a lack of specifics was even acknowledged by those who would later vote on the bill.

“It appears that Nevada, Oregon, Delaware, and possibly a few other states would be exempt from [PASPA’s] ban,” concluded the official Senate Report in 1991.

One of PASPA’s strongest supporters — New Jersey Sen. Bill Bradley — opined that six states were exempt, but did not identify them.

“[T]his bill bans sports betting outright in 44 states,” said Senator Bradley during a 1992 floor debate.

Betting on golf in Wyoming

Sen. Malcolm Wallop of Wyoming made sure that certain sports betting was preserved in Laramie, Cheyenne and Jackson Hole.

“I would like to ask [Sen. Dennis DeConcini], the sponsor of [PASPA] a question regarding his intent as to the effect of the bill on certain actions in my home State of Wyoming,” said Sen. Wallop.  “My concern centers in particular on the practice of calcutta wagering…Calcutta wagering means wagering on the outcome of amateur contests, cutter horse racing, professional rodeo events, or professional golf tournaments.”

Sen. DeConcini confirmed that Wyoming would be exempt.

“I can assure him that the practices which are now authorized and conducted under Wyoming state law, including calcutta wagering…will not be affected by enactment of [PASPA],” replied Sen. DeConcini.

Bike race betting in New Mexico

Sen. Pete Domenici from New Mexico made sure betting on bicycle races at high altitude in Albuquerque was preserved too.

“The New Mexico Legislature passed a law that would allow our State to be the first in the Nation to venture into what is a $13 billion industry in Japan — parimutuel bicycle racing, or as it’s known in Japan, Keirin,” said Sen. Domenici in 1992.  “Would the Senator from Arizona agree that [PASPA] was not designed to prohibit the State of New Mexico from sanctioning Keirin?”

“Yes, I agree,” replied Sen. DeConcini.  “It is my understanding that the leagues and the NCAA do not object to this type of parimutuel bike racing and did not intend for the bill to cover such a sport.”

The Dakotas and Arizona too

The primary sponsor of PASPA added another state too.

“South Dakota sports boards would be grandfathered as well,” said Sen. DeConcini in 1991.

On the House side, Rep. Hamilton Fish of New York emphasized exemptions for two more states as well.

“[PASPA] would not apply to…the state of North Dakota which allows sports pools based on the outcome of professional sporting events if conducted by qualified organizations,” said Rep. Fish during a House debate.  “[A]nd the state of Arizona which allows social gambling to include wagering on the outcome of sporting events up to $100.”

PASPA’s exemptions are fuzzy. So what?

Whether four states, nine states, or some other number of states are exempt from the partial federal sports betting ban is unlikely to matter much to Supreme Court justices looking at big picture issues about PASPA’s constitutionality under the Tenth Amendment.

But PASPA’s lack of definition is a lesson learned the next time Congress moves toward legislating in the sports betting realm.  Indeed, the NBA has already announced plans to lobby Capitol Hill and other stakeholders will surely follow, with an uptick of activity expected after the Supreme Court issues its ruling during the first half of this year.  

Whether federal laws apply to some states, but not others, breeds uncertainty and — in the case of New Jersey at least — protracted litigation that reaches the nation’s highest court.