By Caleb Seibert
In a landmark decision Monday entitled Murphy v. NCAA, the U.S. Supreme Court struck down the Professional and Amateur Sports Betting Act (PASPA), a law that effectively eliminated legal sports betting in most states around the country for 25 years.
The case pitted the State of New Jersey (Gov. Philip Murphy) against the National Collegiate Athletic Association and three professional sports leagues.
The court found that the law violated the “anti-commandeering” principle drawn from the 10th Amendment to the Constitution. The amendment says, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” This principle holds that Congress may pass laws that must be upheld by states, but it may not issue direct orders to state governments requiring them to take certain state legislative action.
Congress passed PASPA in 1993, when sports betting was illegal in all but four states. The law made it unlawful for states “to sponsor, operate, advertise, promote, license, or authorize… a lottery, sweepstakes, or other betting, gambling, or wagering scheme” regarding competitive sporting events. The law did not make sports betting totally illegal but instead limited what states could do to authorize such activity. The law also exempted four states which already had sports betting from the new rules.
In 2014, New Jersey passed a law that repealed its previous prohibition on sports gambling. It allowed persons 21 years old or older to gamble on professional sporting events while at a racetrack, casino, or gambling house in Atlantic City. Notably, the new bill retained the illegality of betting on college sports.
Murphy v. NCAA came before the Supreme Court to determine the constitutionality of PASPA and review lower court rulings that found New Jersey’s 2014 legislation illegally authorized sports betting.
THE COURT’S OPINION
In its majority opinion, the Supreme Court ruled 7-2 that provisions in PASPA were unconstitutional. Nearly every state had laws that prohibited all sports gambling in 1993. As a result, any new action by the New Jersey state legislature, no matter how inconsequential, would effectively “authorize” gambling activity and put the new law at odds with PASPA. PASPA violates the anti-commandeering principle because it ties the hands of a state legislature. The Court pointed to prior cases New York and Printz to affirm that Congress cannot require state legislatures to take certain legislative actions. As Justice O'Connor put it, the Constitution “confers upon Congress the power to regulate individuals, not states.”
In addition, the court found they could not sever only one portion of PASPA and leave the rest of the law intact. In the opinion of the court, the effect of the law would change so dramatically by striking only the unconstitutional portions that it would move beyond the scope intended by the Congress that passed PASPA. As a result of the new ruling, state legislatures around the country now have the option to legalize sports betting in their respective jurisdictions without concern of running afoul of the federal government.
In the words of Justice Alito, “The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.” Through PASPA, Congress chose to indirectly regulate sports betting by limiting a state legislature’s ability to legalize it. The Murphy v. NCAA ruling determined that this was not a viable course of action.
IMPLICATIONS OF THE COURT’S DECISION
This decision does not immediately legalize sports betting across the country, but it does allow states to legalize such activity in their state if they wish to do so. Many states already have legislation in place that makes sports betting illegal, but there seems to be an increase in support of sports gambling over the last few years that may cause laws to be changed quickly. New Jersey, the subject of this case, has already legalized sports betting in some capacity. West Virginia, Delaware, Mississippi, and Pennsylvania seem poised to follow suit, with several more states pushing forward some sort of legislation on the issue.
Congress still has the ability to make sports betting illegal across the country if it wishes to do so. The court affirmed that right, but it seems unlikely Congress will take this step. In addition, Congress can also provide some protections in the process. Rep. Frank Pallone (D-NJ) introduced the Gaming Accountability and Modernization Enhancement Act (GAME) a few months ago to provide these protections. It would have established varied consumer protections and provisions to discourage young people from engaging in sports betting. The bill never gained any traction at the time, but this might change in light of the new ruling.
The main implication from this decision is that it could result in a race among state legislatures to legalize sports betting quickly so they can tax revenue derived from sports gambling. This may be concerning when one considers the addictive nature of gambling. Justice Alito put the tradeoff of the decision well in his majority opinion.
“Supporters argue that legalization will produce revenue for the States and critically weaken illegal sports betting operations, which are often run by organized crime. 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.”
These are serious concerns. The Supreme Court decision has, in many ways, forced state legislatures to make a choice on an issue that was regulated for them in the past. Since significant federal action seems unlikely, opponents of sports gambling will need to advocate their position with state leaders, state senators, and state representatives.
As for the effect in Texas, Rob Kohler, a Christian Life Commission consultant, says, “the recent decision by the Supreme Court regarding gambling on sporting events really has no effect on the current gambling regulations in the State of Texas.” The current leadership of Texas has repeatedly rejected efforts to expand gambling in our state. Kohler concludes: “it will however, energize proponents of this, and other forms of gambling expansion in Texas in the upcoming legislative session in January 2019. We will continue to monitor this, as well as other gambling expansion initiatives and will be ready when January comes around."
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