Legal Sports Betting Is Coming To US, As New Jersey Wins Supreme Court Case

SCOTUS nj sports betting brief

It’s game on for sports betting in New Jersey, and perhaps the rest of the country as well.

The state of New Jersey won its US Supreme Court case, as a majority of justices declared that the federal ban on sports wagering is unconstitutional.

More on the backstory of NJ sports betting and the Professional and Amateur Sports Protection Act here. Previously, single-game wagering was legal in the US only via the Nevada sports betting industry.

Here is the conclusion of the majority opinion:

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. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA “regulate[s] state governments’ regulation” of their citizens. …. The Constitution gives Congress no such power. The judgment of the Third Circuit is reversed.

The court said it reversed the decision of the US Third Circuit Court of Appeals. Full opinion here.

SCOTUS impacts on sports betting

The real-world applications of the verdict:

  • New Jersey can now move forward with its plans to legalize wagering. Some gaming facilities in the state have indicated it could be just a matter of weeks until sportsbooks are operations. William Hill has said in the past it would be live within weeks at Monmouth Park.
  • West Virginia sports betting and Mississippi sports betting are also prepared to move forward with laws on the books.
  • So can Pennsylvania, which legalized sports wagering in 2017. A PA sports betting rollout there is up in the air, but could come later this year.
  • Sports betting legislation advancing in a number of states can take effect immediately upon passage.

New Jersey appears set to move forward with legislation to regulate sports betting, now that PASPA is gone. Its initial law is what amounts to a “partial repeal” of its sports betting prohibition, with unregulated wagering able to happen at the state’s casinos and tracks.

The New Jersey Department of Gaming Enforcement, which will oversee sports betting in the state, had no comment on the decision from SCOTUS today.

A quick timeline of the case

  • New Jersey enacted a law in 2014 in which it partially repealed its own sports betting ban. That law was an attempt to allow the state’s casinos and horse betting tracks to offer sports wagering by working around a federal law, the Professional and Amateur Sports Protection Act. That law bans single-game wagering outside of Nevada sports betting.
  • The NCAA and the major US pro sports leagues — NFL, NBA, MLB and NHL — along with the NCAA filed suit to stop the law from taking effect. The leagues have standing under PASPA to bring suits that authorize sports betting.
  • Over the next three years, New Jersey lost in both federal district court and the US Third Circuit Court of Appeals. New Jersey then appealed the case to the US Supreme Court.
  • The Supreme Court agreed to hear New Jersey’s appeal in the summer of 2017.
  • Oral arguments took place in December; many believed the hour of conversation between justices and counsel went well for New Jersey.

More from the sports betting decision

The decision in the case clocked in at 49 pages. Six justices joined the majority opinion written by Justice Samuel Alito. It was joined by:

  • Chief Justice John Roberts
  • Justice Anthony Kennedy
  • Justice Elana Kagan
  • Justice Neil Gorsuch
  • Justice Clarence Thomas

Justice Stephen Breyer concurred with the majority in a separate opinion, while justices Sonia Sotomayor and Ruth Bader Ginsburg dissented. Breyer also joined the dissent in part.

The top-level takeaways

The majority opinion is pretty unequivocal in saying that PASPA is unconstitutional. Here is the quick digest of what SCOTUS actually said about PASPA in terms of the law:

  • When a State completely or partially repeals old laws banning sports gambling schemes, it “authorize[s]” those schemes under PASPA.
  • PASPA’s provision prohibiting state authorization of sports gambling schemes violates the anticommandeering rule.
  • PASPA’s provision prohibiting state “licens[ing]” of sports gambling schemes also violates the anticommandeering rule. It issues a direct order to the state legislature and suffers from the same defect as the prohibition of state authorization. Thus, this Court need not decide whether New Jersey’s 2014 law violates PASPA’s antilicensing provision.
  • No provision of PASPA is severable from the provisions directly at issue.

The bottom line: PASPA is history.

Alito’s takeaways

Alito gives us a brief history of gambling in the US and PASPA before getting into the questions of law that were put in front of the court.

Alito said the idea that Congress had in mind what NJ did — a partial repeal — is dubious:

The Third Circuit could not say which, if any, partial repeals are allowed.  Respondents and the United States tell us that the PASPA ban on state authorization allows complete repeals, but beyond that they identify no clear line. It is improbable that Congress meant to enact such a nebulous regime.

The state had argued that PASPA commandeered the state into keeping its prohibition on the books. And the court, via Alito, agreed.

The PASPA provision at issue here—prohibiting state authorization of sports gambling—violates the anticommandeering rule. That provision unequivocally dictates what a state legislature may and may not do.

Reaction to the NJ sports betting case

Here is some reaction from various corners:

American Gaming Association

“Today’s decision is a victory for the millions of Americans who seek to bet on sports in a safe and regulated manner. According to a Washington Post survey, a solid 55 percent of Americans believe it’s time to end the federal ban on sports betting. Today’s ruling makes it possible for states and sovereign tribal nations to give Americans what they want: an open, transparent, and responsible market for sports betting.

Through smart, efficient regulation this new market will protect consumers, preserve the integrity of the games we love, empower law enforcement to fight illegal gambling, and generate new revenue for states, sporting bodies, broadcasters and many others. The AGA stands ready to work with all stakeholders – states, tribes, sports leagues, and law enforcement – to create a new regulatory environment that capitalizes on this opportunity to engage fans and boost local economies.”

NFL

The NFL’s long-standing and unwavering commitment to protecting the integrity of our game remains absolute. Congress has long-recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events. Given that history, we intend to call on Congress again, this time to enact a core regulatory framework for legalized sports betting. We also will work closely with our clubs to ensure that any state efforts that move forward in the meantime protect our fans and the integrity of our game.

NCAA

“Today the United States Supreme Court issued a clear decision that PASPA is unconstitutional, reversing the lower courts that held otherwise. While we are still reviewing the decision to understand the overall implications to college sports, we will adjust sports wagering and championship policies to align with the direction from the court.”

NBA

Commissioner Adam Silver:

“Today’s decision by the Supreme Court opens the door for states to pass laws legalizing sports betting. We remain in favor of a federal framework that would provide a uniform approach to sports gambling in states that choose to permit it, but we will remain active in ongoing discussions with state legislatures. Regardless of the particulars of any future sports betting law, the integrity of our game remains our highest priority.”

And the players’ association:

“Today’s decision by the Supreme Court will significantly impact our sport – indeed, all sports in this country. The NBPA will, often in conjunction with the other sports unions, work to ensure that our players’ rights are protected and promoted as we venture into this new territory.”

Major League Baseball

“Today’s decision by the Supreme Court will have profound effects on Major League Baseball. As each state considers whether to allow sports betting, we will continue to seek the proper protections for our sport, in partnership with other professional sports. Our most important priority is protecting the integrity of our games. We will continue to support legislation that promotes air-tight coordination and partnerships between the state, the casino operators, and the governing bodies in sports toward that goal.”

And the players’ association:

“The Court’s decision is monumental, with far-reaching implications for baseball players and the game we love. From complex intellectual property questions to the most basic issues of players safety, the realities of widespread sports betting must be addressed urgently and thoughtfully to avoid putting our sport’s integrity at risk as states proceed with legalization.”

PGA Tour

“Following the Supreme Court’s ruling today, the PGA TOUR reiterates its support of the regulation of sports betting in a safe and responsible manner. We believe that regulation is the most effective way of ensuring integrity in competition, protecting consumers, engaging fans and generating revenue for government, operators and leagues. We remain aligned with the NBA and MLB in this area, and we will continue with our collective efforts to work with legislators, regulators, operators and others in the industry on regulation that serves the interests of all involved.”

MGM

The no. 2 man under MGM Resorts CEO Jim Murren talked to Bloomberg:

“We believe in the next two years to three years, there are 10 to 12 states that are ripe and ready to activate on that,” MGM President William Hornbuckle said. “We will be there. We will participate in it. We bring technology. We bring knowledge. And frankly in this space, we bring trust.”

888 Holdings

Itai Frieberger, CEO of 888:

“888 has been keeping a very close eye on regulatory developments in the US and welcomes today’s announcement as an important step forward in the potential regulation of the US market. The potential for sports betting in the US is significant and, as the only operator in all three regulated US states*, we believe 888 is uniquely positioned to exploit the potential growth opportunities in the US market that today’s ruling opens up.”

Rep. Frank Pallone

Pallone is a Congressman from New Jersey who has championed sports betting bills at the federal level:

“The Supreme Court’s ruling is a win for New Jersey and the rest of the country. PASPA was clearly unconstitutional, and the ban on sports betting has now rightfully been rejected by the Court. I have long believed that New Jersey should have the opportunity to proceed with sports betting. Now that the Supreme Court has struck down this unlawful and confusing law, it is time for Congress to move the GAME Act forward to ensure that consumer protections are in place in any state that decides to implement sports betting.”

Rep. Dina Titus

Titus represents Nevada in Congress.

“Today the Supreme Court has affirmed states’ rights when it comes to sports betting and opened the door for regulated sports betting in states across the country,” said Representative Titus. “A regulated market is always better than an unregulated one. As the representative for Las Vegas I have seen the success of the booming, regulated sports betting market in Nevada. The Professional and Amateur Sports Protection Act has spawned a $150 billion annual illegal sports betting market that lacks consumer protections, is ripe for manipulation, fuels other illicit activities, and jeopardizes the integrity of sports leagues.

In the coming weeks, I will be working with key stakeholders and industry experts to help educate my colleagues on what this means for their states and what they can learn from the gold standard set in Nevada. Allowing states and tribal sovereign governments to legalize sports betting could boost local economies, increase state revenues, and better protect both consumers and the industry, with Nevada showing the way. Las Vegas will still be the premier destination for sports betting, and Nevada can export its expertise. The Supreme Court today also sends a clear message to the Department of Justice that can be applied to other states’ rights issues like marijuana.”

New York

Here is Sen. John Bonacic, who is sponsoring legislation to legalize wagering in his state:

“New York has been preparing for this moment since as far back as 2013 and we have remained proactive in anticipation of this decision by the Court. The Senate Racing, Gaming and Wagering Committee held a public hearing in January that brought together stakeholders from across the gaming spectrum to discuss this issue in depth.

Since that time, I have introduced legislation that has passed committee and continued to have productive discussions regarding the issue. I am confident that working together with my colleagues in both the Senate and Assembly, we can have a bill ready for Governor’s signature by the end of the session.”

Pechanga Tribe

“We view sports betting as a potential amenity that would complement our numerous offerings. Now that the Court has ruled, we look forward to engaging in a conversation with fellow tribal leaders, policymakers, and industry stakeholders to see if there is a path forward for sports betting in California.”

California Nations Indian Gaming Association

Chairman Steve Stallings:

Moving forward it will take an amendment to the California Constitution to permit any form of sports wagering.  In doing so, we would advise the state to move slowly and cautiously and examine all angles as it relates to sports betting.  As the state of California weighs the decision of whether to allow for the practice of sports wagering, we firmly ask that tribes have a place at the table in any and all discussions surrounding this issue.

We also want to make very clear that California voters have, on numerous occasions, confirmed the exclusive right of California tribal governments to operate casino-style games.  Legalization of sports betting should not become a back-door way to infringe upon that exclusivity.

A strong, well-regulated gaming industry is of utmost importance to California’s tribal governments and the public. Protecting the integrity of the gaming industry protects California and is our true North Star that guides all of our stances and decision

DraftKings and FanDuel

The two daily fantasy sports sites have been eyeing legal sports wagering and that interest will increase now. DraftKings had already announced its intention to offer sports wagering:

FanDuel:

“The Supreme Court’s decision, which paves the way for states to legalize sports betting, creates an enormous opportunity for FanDuel as our platform, brand, and customer base provide a unique and compelling foundation to meaningfully participate.

At our core, we’re a business that makes sports more exciting. In the same way we revolutionized fantasy sports, we will bring innovation to the sports betting space. This decision allows us to bring the passion and engagement we have seen among our users to new and expanded marketplaces and create a sports betting product that fans will love. FanDuel is and will continue to be the premier mobile destination for every sports fan.”

DraftKings CEO Jason Robins:

“Our mission has always been to bring fans closer to the sports they love and now, thanks to the wisdom of the Supreme Court, DraftKings will be able to harness our proven technology to provide our customers with innovative online sports betting products. This ruling gives us the ability to further diversify our product offerings and build on our unique capacity to drive fan engagement.”

Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.