A Look At The Losers From The Supreme Court Sports Betting Case

Written By

Updated on

Sports Scoreboard

There were a lot of winners on Monday when the US Supreme Court sports betting decision came down, allowing states to legalize single-game wagering. But most of you know who those are already: New Jersey, sportsbook operators, gaming companies and more than we will list here.

But who were the losers? Here’s a look.

Sports leagues

The five Supreme Court losers are the leagues that had their name on the case, Murphy vs. NCAA: the title litigant along with the NFL, NBA, NHL and Major League Baseball. They have been fighting New Jersey in the case for years, and in the final act — or Game 7, if you will — they came up short.

In reality, it’s pretty clear the pro sports leagues didn’t actually lose anything. They’ll all enjoy the increased engagement and money that comes from the advent of legal sports wagering in the form of better TV ratings and deals, sponsorship opportunities and more.

But still, it’s clear the leagues would rather have won. The NCAA doesn’t like sports betting of any type. At least two of the five — the NBA and MLB — committed mutiny of a sort and started lobbying for legal and regulated wagering at the state level.

But all the pro leagues would rather have won the case and bided their time trying to ease a sports betting bill through Congress, where they would have a better shot at getting what they want — control of data, a streamlined regulatory framework, etc. Now they’ve lost control of the how and when of legal US sports betting, as well as the narrative, in some respects.

So, yes, they are still losers.

States that dawdled

Several states have teed up legislation or already passed laws getting them ready for the possibility of the SCOTUS decision.

But many states waited too long and will either 1. suffer ill effects from dawdling or 2. create bad policy.

On point one, there are a few examples. Most noticeable is Maryland, a state with commercial casinos and racetracks, which didn’t enact a bill that would have created a referendum on sports betting. In the meantime, a lot of its neighbors — New Jersey, Pennsylvania, West Virginia and Delaware — all will try to launch sports betting this year or next. That’s a bad spot to be in in a competitive casino industry in the Mid-Atlantic.

On the latter point, several states look like they might try to rush legislation to the finish line this year, which isn’t a great idea in trying to create good policy.

Regardless, if you’re a state that is just now starting to have the sports betting discussion, you’re late to the party.

The lower federal courts

The US District Court of NJ and the US Third Circuit Court of Appeals had three cracks in the newest iteration of the NJ sports betting case, and got it wrong all three times. (New Jersey also lost in both those courts in Christie vs. NCAA I).

The Supreme Court reverses a lot of rulings of lower courts when they actually agree to hear an appeal, so we could see this loss coming. Still, the Third Circuit getting it wrong is interesting in retrospect. They agreed to hear an en banc appeal — where all the active justices on the court (12 in all here) weighed in on the case — and they still came to a decision opposite of the Supreme Court decision.

Better luck next time out, Third Circuit.

Opponents of expanded gambling

The people that cry out whenever a government wants to legalize more gambling were obviously losers.

This is not meant to rub salt in the wounds, but clearly this was a bad day for them. This is the biggest expansion of legal wagering in the US in quite some time.

Of course, illegal sports betting is going on all over the US anyway, although legalizing will expand the universe of sports bettors. And speaking of illegal betting…

Illegal bookmakers

There are mixed opinions for what all this means for those who already take bets illegally in the US — offshore sportsbooks and local bookies. Some believe it will be business as usual for them, and that legal books will struggle to compete with them under regulatory and tax schemes that don’t exist when you operate illegally.

Offshore books, at least, could be seeing a sudden surge in business. People who want to bet right away will be finding the offshore books via Google searches, because those are still the only sportsbooks that serve states outside of Nevada right now.

I don’t know if I would yet call them losers — I guess I have to put them in this category for the purposes of this column — but the salad days could be coming to an end. They’ve had the market to themselves outside of Nevada, and now they’ll be competing against legal options that should be fairly accessible and visible to Americans. I’d be at least a little worried about the bottom line in the long term if I am operating an offshore book.