The U.S. Supreme Court on Monday cleared the way for an explosion in legalized sports betting across the nation, striking down a federal law that told states they may not allow wagering on pro and college games.
Invoking the principle of states’ rights, the justices, by a 6-3 vote, said the Constitution protects the independence of the states and denies Congress “the power to issue direct orders” to them.
The ruling in favor of New Jersey has the potential to transform how Americans bet on sports. Gaming industry experts estimate that $150 billion a year is spent on sports betting, but only about 3 percent is wagered legally, mostly in Las Vegas.
Gaming experts predict most states will move toward legalizing sports betting, eager for a new source of revenue. And the major pro-sports leagues — including the NFL, NBA, NHL and Major League Baseball, which have opposed wagering — are expected to negotiate for a share of that revenue.
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In Washington state, it is illegal to bet on most sports other than horse racing.
Technically, even betting money on bracket pools for NCAA basketball's March Madness is against the law. The same goes for playing fantasy sports to win money, which some lawmakers have unsuccessfully pushed to change.
One form of sports gambling — called "sports pool boards" — is legal. The game is based on single athletic events and features a 100-square board with a maximum charge of $1 per square.
"In order for sports betting to become legal in Washington, the Legislature would need to vote to authorize it; most likely, a 60-percent majority would be required," according to a statement from the Washington State Gambling Commission. "We are currently reviewing the Supreme Court's decision to determine its full impact on Washington State's authority to enact its own sports gambling laws."
Monday’s opinion may also prove significant on an entirely different front. It bolsters California and other states that are battling the Trump administration over immigration, “sanctuary cities” and recreational marijuana. At issue in these disputes is whether California and liberal-leaning states may refuse to cooperate with federal efforts to enforce federal laws on immigration or marijuana.
In upholding New Jersey’s bid to offer sports betting, the justices, led by its conservatives, gave a powerful endorsement to the “anti-commandeering” principle. The Constitution “did not abolish the sovereign powers of the states,” said Justice Samuel A. Alito Jr., writing for the majority. “Even where Congress has the authority under the Constitution to pass laws requiring or prohibiting certain acts,” he said, it may not “commandeer” the states “by directly compelling them to enact or enforce a federal regulatory program.”
A key factor in the case was that the federal law did not make sports betting a federal crime, but instead directed states not to authorize the practice.
Currently only Nevada offers legalized betting on sports, thanks to a grandfather provision in the federal act.
New Jersey officials insisted the federal government could not force them to enforce a congressional ban on wagering on professional and college sports. When Congress passed the Professional and Amateur Sports Protection Act in 1992, it did not say federal agents would police sports betting. Instead, it said states may not “sponsor” or “authorize” such gaming.
Four years ago, the New Jersey Legislature decided to repeal its restrictions on the placing of sports wagers at its race tracks and casinos.
The U.S. appeals court in Philadelphia struck down this measure because it had the obvious impact of legalizing gambling that was forbidden under federal law. The Supreme Court agreed to hear the appeal and upheld New Jersey’s states’ rights claim.
“Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own,” Alito said in Murphy vs. NCAA.
Joining Alito, Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Clarence Thomas, Elena Kagan and Neil M. Gorsuch agreed with New Jersey that the Constitution’s 10th Amendment shields states from being required to enforce a federal law.
The NCAA and the major pro leagues had gone to federal court and won several rulings declaring that New Jersey would violate the law if it permitted sports gaming at its tracks and casinos.
Monday’s ruling does not legalize sports betting in other states, but it permits states to follow New Jersey’s lead by repealing state restrictions on sports gambling.
In dissent, Justice Ruth Bader Ginsburg said the court had erred by using a “wrecking ball” to destroy the 1992 federal law. “Congress permissibly exercised its authority to regulate commerce by instructing the states and private parties to refrain from operating sports-gambling schemes,” she wrote. Justice Sonia Sotomayor agreed, and Justice Stephen G. Breyer agreed in part with her dissent.
The American Gaming Association called the decision “a victory for the millions of Americans who seek to bet on sports in a safe and regulated manner. Today’s ruling makes it possible for states and sovereign tribes to give Americans what they want: an open, transparent and responsible market for sports betting.”