The U.S. Supreme Court acted Monday to bust Nevada’s monopoly on legal sports betting, allowing more states to get in on the action and reap the tax benefits.
The court, in a 6-3 ruling, struck down a federal law that required states to ban gambling on the outcome of sporting events. The Professional and Amateur Sports Protection Act was highly unusual: It did not ban sports gambling nationwide as a matter of federal law, but it said the states were not allowed to permit it. (Nevada was grandfathered in when the law was passed in 1992.)
Dozens of states across the country are prepared to move forward quickly to offer sports betting in the wake of the court’s decision.
New Jersey and then-Gov. Chris Christie challenged the federal ban, arguing that it violated the Tenth Amendment, which the Supreme Court has said prohibits federal laws that compel states to carry out federal dictates. The gambling law, Christie said, commandeered the states by forcing them to prohibit sports wagering.
New Jersey’s current governor, Phil Murphy, said he was “thrilled” by the ruling and would work with state lawmakers to enact a law authorizing sports betting “in the very near future.”
“Today’s ruling will finally allow for authorized facilities in New Jersey to take the same bets that are legal in other states in our country,” Murphy said.
Writing for the majority, Justice Samuel Alito said the problem with the federal law is that “state legislatures are put under the direct control of Congress.”
“A more direct affront to state sovereignty is not easy to imagine,” he wrote.
New Jersey wants to allow limited forms of sports gambling and to collect the taxes from it. While supporters of the federal law said it discouraged betting and the resulting corrupting influence of organized crime on athletics, Christie said Americans already spend nearly $150 billion a year on illegal sports wagering.
“I know that we don’t know much about organized crime coming from New Jersey. But we know a little bit. And the fact is that organized crime is involved in profiting from this every day,” he said.
The American Gaming Association estimated that Americans would wager $10 billion on this year’s NCAA men’s basketball tournament alone, with just three percent of the bets placed legally through Nevada.
“Today’s decision is a victory for the millions of Americans who seek to bet on sports in a safe and regulated manner,” the association said in a statement Monday. “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.”
The NCAA and the major professional sports leagues contended that the law was not unconstitutional, because it didn’t compel states to do anything, it simply prevented them from making sports betting legal by either operating sports-gambling schemes themselves or authorizing casinos to do so.
New Jersey officials said they would allow only certain types of sports betting, at casinos and racetracks, with a minimum age of 21 to participate. When the case was argued in January, Christie said the state was prepared to act within two weeks of a Supreme Court ruling in its favor.