Place Your Bets! The Supreme Court Weighs in on Sports Betting.

Editor’s Note: This is the first in a series of articles regarding the decisions handed down at the end of the Supreme Court’s term. We hope to highlight some of the important ones over the course of the summer.

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The author and the Hit King, Pete Rose.

Jesse Knowlden, Associate Member, University of Cincinnati Law Review

On Monday, the Supreme Court of the United States issued its opinion in Murphy v. National Collegiate Athletic Association, striking down a federal law that prohibited States from authorizing gambling on sporting events.

The Professional and Amateur Sports Protection Act of 1992 (PAPSA) made it illegal for a State 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(1). PAPSA did not make betting on sports a federal crime, but instead authorized the Attorney General and sporting organizations to bring civil suits to enjoin perceived violations. 28 U.S.C. 3703. A certain PAPSA provision would have allowed New Jersey to regulate sports gambling in Atlantic City within one year of PAPSA’s enactment, but New Jersey dropped the ball and lost out on the opportunity.

In 2012, the New Jersey legislature amended the state constitution to allow gambling on sporting events.  But the NCAA, MLB, NHL, NFL and NBA sued to enjoin the law as a violation of PAPSA. New Jersey could not beat the odds, as the District Court and Third Circuit ruled in the Plaintiff’s favor. New Jersey doubled down and enacted a law in 2014 that repealed state-law provisions that prohibited betting on sporting events. The same Plaintiffs again sued to enjoin the law, and the District Court and Third Circuit again gave the advantage to the house, ruling against New Jersey. The Supreme Court accepted the case to determine whether PAPSA violates the U.S. Constitution.

Justice Alito, writing for a seven-member majority of the Court, held that PAPSA violates the anti-commandeering doctrine of the 10th Amendment, which prohibits Congress from issuing orders directly to the States. The Court summarized the anti-commandeering principle with the following quote: “[w]e have always understood that even when 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.” (quoting Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U. S. 264, 288 (1981)). The Court held that PAPSA “unequivocally dictates what States may and may not do” and therefore violates the 10th Amendment. New Jersey hit the jackpot; the Court eighty-sixed the entire Act and sent the Plaintiffs down the river.

What does this mean for the future? Not much, for now. Invalidating PAPSA completely handicaps the federal government’s ability to manage sports betting for the time being, but if I were New Jersey I would not be counting my money while sitting at the table. Congress may still choose to enact legislation that directly regulates gambling on sporting events at the federal level, but until they do so, states are free to celebrate the payday and allow the gambling as they see fit.

I’ll wager that many states follow suit and enact legislation similar to that of New Jersey, but I also would not count out the possibility of new legislation from the federal government that directly regulates betting on sporting events. For now the states have won a big hand, but I anticipate that the federal government will not fold in their efforts to regulate sports betting. I would imagine that the book on sports gambling is not completely closed, but I am not much of a betting man.