On May 14, 2018, the United States Supreme Court paved the way for the expansion of legalized sports gambling with its decision in Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S. Ct. 1461 (2018). In Murphy, the Court held that the Professional and Amateur Sports Protection Act (“PASPA”)—the federal law that for over twenty-five years prohibited states from passing any new laws authorizing gambling on professional or amateur sporting events—was an unconstitutional violation of states’ rights. With the prohibitions of PASPA no longer in place, the expansion of legalized sports betting is already underway: Within weeks of the decision, the first legal sports bets in the United States (outside of Nevada) were taken in Delaware and New Jersey. Other states will follow. This article examines the potential legal implications of the Murphy decision on sports betting in the United States.
Background on the Murphy Decision
Congress enacted PASPA in 1992 to prevent the spread of legal sports gambling beyond any state that already allowed it at that time. Instead of preventing individuals from betting on sporting events, Congress prohibited the states from legalizing sports gambling by declaring it unlawful for any “governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact . . . a lottery, sweepstakes, or other betting, gambling, or wagering scheme based . . . on” competitive sporting events. 28 U.S.C. § 3702. At the time, Nevada was the only state that allowed widespread betting on individual sporting events. Delaware, Oregon, and Montana allowed very limited forms of sports betting such as sports pools or NFL parlay betting.
This status quo was maintained for over two decades, even as the explosion of the internet transformed illegal sports betting. No longer did individuals have to place bets with local bookies; they could open online accounts with international bookmakers taking in hundreds of billions of dollars annually. In 2012, New Jersey decided that sports gambling revenue could revive the struggling economy of Atlantic City and create new jobs for its citizens and passed legislation authorizing sports betting in New Jersey casinos and horse racing parks, acts expressly prohibited by PASPA. The four major professional sports leagues (Major League Baseball, the National Basketball Association, the National Football League, and the National Hockey League), along with the National Collegiate Athletics Association, filed a civil suit in federal district court to enjoin New Jersey from allowing betting on their sporting events, as permitted under a separate provision of PASPA. The district court entered an injunction, Nat’l Collegiate Athletic Ass’n v. Christie, 926 F. Supp. 2d 551 (D.N.J. 2013), and the Third Circuit affirmed. Nat’l Collegiate Athletic Ass’n v. Governor of N.J., 730 F.3d 208, 230 (3d Cir. 2013). Following this decision, New Jersey attempted to frame its legislation as a repeal of its existing sports gambling laws, an approach that was again rejected by both the district court and Third Circuit. Nat’l Collegiate Athletic Assn. v. Christie, 61 F. Supp. 3d 488 (D.N.J. 2014); Nat’l Collegiate Athletic Assn. v. Governor of N. J., 832 F.3d 389 (3d Cir. 2016) (en banc).
After a six-year legal battle, the Supreme Court reversed, endorsing New Jersey’s argument that PASPA was an unconstitutional violation of the “anti-commandeering” principle, a principle that recognizes the limits of Congressional authority over the states and their ability to pass laws. The Court concluded that “even where Congress has the authority under the Constitution to pass laws requiring or prohibiting certain acts, it lacks the power directly to compel the States to require or prohibit those acts.” Murphy, 138 S. Ct. at 1477 (quoting New York v. United States, 505 U.S. 144, 166 (1992)). After noting that “the Constitution confers upon Congress the power to regulate individuals, not States,” the Court concluded, “Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.” Id. at 1479, 1484-85.
Will Congress Act to Replace PASPA?
As the Supreme Court noted, its decision presents Congress with a choice of either passing a new law regulating individuals’ ability to participate in sports gambling directly or leaving regulation of sports betting to the individual states. Senator Orrin Hatch, one of the original authors of PASPA, has already indicated that he will introduce legislation to replace PASPA, which he believes is necessary to “protect honesty and principle in the athletic arena.” Press Release, Sen. Orrin Hatch, Hatch Lays Groundwork for New Sports Betting Legislation (May 14, 2018) (available at https://www.hatch.senate.gov/public/index.cfm/2018/5/hatch-lays-groundwork-for-new-sports-betting-legislation). How much any proposed legislation would attempt to limit the spread of gambling is a critical question that interested parties will want answered sooner rather than later.
Public opinion on gambling has shifted towards a more tolerant view since the passage of PASPA in the early 1990s. Nearly every state now operates a lottery; legal casino gambling that was once confined almost exclusively to Las Vegas and Reno has...
