Sports Betting and the Supreme Court
Sports Betting and the Supreme Court

JURIST Guest Columnist Keith Miller of Drake University Law School discusses the future of sports gambling in the United States…

In a move that caught many people by surprise, on January 16 the United Supreme Court invited the Solicitor General to set forth the government’s view of the validity of a federal law that prohibits states other than Nevada from offering sports betting. Although the significance of the Court’s order won’t be known for some time, it raises tantalizing questions about the future of sports gambling in the United States. Could nationwide sports betting lie over the horizon?

The Background of Sports Betting Law in the US

Sports betting in the US is immensely popular. Nevada sports books handled over $4 billion in bets in 2015. In addition, it is estimated that nearly $200 billion is bet illegally on sports annually with bookies and through online sports books based outside the US.

The reason for the financial disparity between legal and illegal betting is the fact that federal law makes Nevada the only state where single game sports betting is legal. The 1992 Professional and Sports Betting Act (PASPA) prohibited sports betting but granted exceptions to states that had operated forms of sports betting before PASPA’s passage. Nevada was the only state with single game sports betting, and when New Jersey failed to take advantage of a provision in PASPA giving them one year from the law’s effective date to adopt sports betting, PASPA essentially codified Nevada’s sports betting monopoly.

The wisdom of PASPA has been debated since its inception. Supporters assert that PASPA protects the integrity of sports contests from the potential corruption of nationwide sports betting and limits the spread of problem gambling.

On the other hand, PASPA’s critics contend that legalized betting actually promotes the integrity of sports contests by establishing a transparent regulatory framework. They further argue that legalization would drive out the criminal elements of illegal betting, and states would benefit from taxing the gambling revenues. Whatever the merits of these arguments, the fact is Congress has not amended the law since its passage.

New Jersey’s Attack(s) on PASPA

In 2012, after voters overwhelmingly approved a constitutional amendment, New Jersey stopped waiting for a change in PASPA and enacted a sports betting framework in the state. The state contended that PASPA violated constitutional principles relating to states’ rights.

In Christie I, the 3rd Circuit Court of Appeals ruled that PASPA was valid. The court held that PASPA did not “commandeer” the legislative processes in New Jersey because it doesn’t require a state to do anything. Rather, as a valid expression of Congress’s authority under the Commerce Clause, PASPA simply prevents a state from authorizing sports betting and therefore does not violate principles of states’ rights.

Moreover, the court ruled that Congress did not violate the Constitution by permitting Nevada to offer sports betting when other states could not. PASPA was designed to stop the spread of sports betting so it was inevitable that some states would be treated differently.

Nevertheless, New Jersey was undaunted by this defeat. It seized on language in the court’s opinion that said PASPA did not preclude New Jersey from repealing its laws forbidding sports betting, because a repeal did not constitute an authorization. So in 2014, New Jersey repealed its laws forbidding sports betting at horse tracks and in casinos. In other words, sports betting could be conducted at those facilities because there was no longer a law forbidding it. Once again, the leagues claimed this was in violation of PASPA

It is here that the case began the path of twists and turns that has led to the Supreme Court’s recent order. In Ben Cohen, an Assistant Editor for JURIST Commentary. Please direct any questions or comments to him at commentary@jurist.org

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