The Supreme Court abolished a 1992 federal law that had banned commercial sports betting in most states, thus
legalizing the estimated $150 billion in illegal wagers on professional and amateur sports that Americans make every year.
This decision seems to create great changes to the country’s relationship with sports wagering. Gamblers will no longer be forced into the black market to use offshore gambling operations or illicit bookies. Placing bets will be done on mobile devices, encouraged and endorsed by the lawmakers and sports officials who opposed it for so long. A trip to Las Vegas gamble on March Madness or the Super Bowl could soon seem to be old-fashioned.
The law the decision got annulled – the Professional and Amateur Sports Protection Act – prohibited states from authorizing sports gambling. Among its sponsors was senator Bill Bradley, Democrat of New Jersey and a former college and famous professional basketball player. He said that the law was required to protect the integrity of sports.
But the court said that the law was unconstitutional. “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,” Justice Samuel A. Alito Jr. said, writing for the majority. “A more direct affront to state sovereignty is not easy to imagine.”
Across the country, state officials and representatives of the casino industry welcomed the rule with great delight, nowhere more than in New Jersey, which foresaw the decision and prepared quickly to take advantage of it.
In 2011, the state’s voters passed a constitutional amendment in favor of legalized sports betting, and three years later, the Legislature revoked its law against sports betting. Both were challenged in court. But now the legislature only has to pass the law establishing the rules and regulations for sanctioned sports betting to start at casinos and racetracks in the state.
A spokesman for Gov. Philip D. Murphy said his office sent a proposed bill to the Legislature weeks ago and has been
negotiating behind the scenes in anticipation of a favorable ruling from the court. Stephen M. Sweeney, the State Senate president, said people in New Jersey would “definitely” be able to bet before June 30.
That would give the state a head start in joining Nevada, which was granted an exemption under the 1992 law, in allowing sports betting. But five states – Connecticut, Mississippi, New York, Pennsylvania and West Virginia – have recently passed sports betting laws, and similar legislation has been initiated in at least another dozen states.
“This is a dry constitutional issue about states’ rights, but it will likely change how we have viewed sports for the past hundred years,” said Gabriel Feldman, the director of the sports law program at Tulane Law School.
“It’s called the gamblization of sports,” he added. “Fans will become much more focused on gambling than following a team. It will make every second of every game of every week interesting to fans as it will give everyone something to root for.”
The American Gaming Association, a trade group that represents casinos, anticipated that the rule would generate revenue without imperiling the integrity of sports competitions.
“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 group said in a statement.
The rule in Murphy vs National Collegiate Athletic Association, No. 16-476, is probably to be a boon for media and data companies that have current relationships with the major sports leagues. Television networks like ESPN, which is likely to benefit from more fans having a more deeply vested interest in the action – resulting in higher ratings, are included.
Additionally, a whole industry has been created predicting this kind of radical change. Data companies like Sportradar, which compiles and distributes immediate information are included. Sportradar is already related to N.F.L. and N.B.A., and also International Tennis Federation.
Everyone was not enthusiastic about the decision.
“The court’s decision is monumental, with far-reaching implications for baseball players and the game we love,” Tony Clark, the executive director of the Major League Baseball Players Association, said in a statement. “From complex intellectual property questions to the most basic issues of player 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.”
But the rule confirmed that professional sports leagues like the N.B.A. and Major League Baseball have accepted recently – that how much hard they resisted, legalized sports betting was imminent. The leagues and their teams made long efforts to make it so because, among other reasons, they were not assured of being able to directly exploit into the new, vast revenue stream.
Officials across sports have complained for a long time that legalized betting would lead to the corruption of their games through match-fixing, though there is no indication of real concern. For instance, sports wagering is legal and very popular in Britain but the quality of the Premier League has not been compromised. Instead of legalizing gambling it allows the companies and leagues to check gambling patterns and mark the betting flaws that could suggest corruption.
Recently, the professional sports league have taken different positions. Formally, they are all against it. When New Jersey revoked its law against sports betting, the N.B.A., the N.F.L., the N.H.L., the M.L.B., and also the N.C.A.A. that governs college sports, joined together to charge the state at the court. They were on the losing side of Monday’s rule.
While the N.F.L. and the N.C.A.A. are the most adamant in their stand against legalized sports betting, the N.B.A. long ago concluded that public opinion has changed, bringing the gray- and black-market betting into the legal market would be the best way of preventing match-fixing, and that there is money to be made for the leagues.
In 2014, Adam Silver, the N.B.A.’s commissioner, wrote an Op-Ed for The New York Times advocating the legalization and regulation of sports betting. In an appearance for a New York Senate committee in January, a league official designed the N.B.A.’s opinion on its ideal sports betting legislation that would, among other things, establish monitoring to detect unusual betting activity; impose a 1 percent “integrity” fee on bets that would be paid to sports leagues; and authorize digital betting platforms as well as casino buildings.
In the months since the N.B.A. and the M.L.B. have visited state legislatures seeking to influence the lawmakers for the rules.
The leagues are not alone who are trying to enact the laws. Unions representing professional athletes like the baseball players’ association have also demanded a seat at the table, whereas casinos and gambling trade groups have resisted to calls for an integrity fee. Native American tribes, that generate over $30 billion in casino revenue annually, have mostly chosen a wait-and-see approach to sports wagering, but will surely want to say how laws are made.
Lastly, there is always a chance of involvement of Congress.
“Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own,” Justice Alito wrote in his majority opinion.
After the Supreme Court’s rule, a statement was released in which both the N.B.A. and N.F.L. asked Congress to pass a federal sports betting law, and Senator Orrin G. Hatch of Utah, one of the original authors of the law abolished on Monday, said he made a scheme to introduce federal legislation regulating sports betting.
“Supporters argue that legalization will produce revenue for the states and critically weaken illegal sports betting operations, which are often run by organized crime,” he wrote. “Opponents contend that legalizing sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports.”
But the question for the Supreme Court, Justice Alito wrote, was whether Congress had crossed a constitutional line in forcing states to do its bidding. Five justices have agreed to all of his opinion, and Justice G. Breyer with much of it. Justice Ruth Bader Ginsburg, along with Justice Sonia Sotomayor, disagreed since the majority had a broader rule.
“The court wields an ax,” Justice Ginsburg wrote, “instead of using a scalpel to trim the statute.”