U.S. News


Aftermath of the Supreme Court Overturning PASPA

In 2018, the U.S. Supreme Court handed down its long-awaited ruling in Murphy v. NCAA, overturning a federal law that had been in place for 26 years that prohibited states from “authorizing” sports betting.

The U.S. Congress still retains the power to implement a federal law that might allow regulated gambling on a national scale, even if the Court’s decision is anticipated to lead several states to approve new laws allowing intrastate betting on sports events. However, until that time, each state is “free to act on its own” and can choose to regulate sports betting.

The Professional and Amateur Sports Protection Act (PASPA) was passed by Congress in 1992 in an effort to stop sports betting from spreading outside of Nevada, Oregon, Delaware, and Montana. The PASPA declared it “illegal” for a state to “sponsor, operate, advertise, promote, license, or otherwise authorized by law or compact a lottery, sweepstakes, or other betting, gambling, or wagering scheme based on competitive sporting events.” The operation of those gambling schemes was also illegal, but only to the extent that it was done “pursuant to the legislation or contract of a governmental authority.”

In 2011, Atlantic City was up against severe competition from other jurisdictions that allowed legalized gaming. New Jersey’s Constitution was amended with voter approval, enabling the legislature to legalize sports betting. The legislature enacted a measure in 2012, but the federal courts overturned it because they found that it violated PASPA.

The Supreme Court held that PASPA had infringed upon the sovereign authority of New Jersey by having command over the state’s regulatory power. They claimed that PASPA dictated what can and cannot be done by a state legislature, thus, it should be changed. The anti-commandeering rule prohibits what PASPA was entailing for New Jersey.

After analyzing all provisions of PASPA, the Court concluded that the entire statute was unconstitutional.

Although the Supreme Court ruled that PASPA was unconstitutional, no state’s gaming regulations were altered by this ruling. Now, it is up to each state to determine whether or not they will permit sports betting and if so, how they will do it. Any state that wants to legalize sports betting must go through the required legal procedures to change its laws, and if it chooses to do so, it must also create a regulatory framework.

Delaware, Mississippi, Pennsylvania, and West Virginia have already passed laws that regulate sports betting. New Jersey approved a more complete set of laws, and the Garden State is finally autonomous when it comes to sports betting. As a result, the revenue of online casinos in New Jersey jumped 24.4% from June 2021 reaching $133 million.

Many states want to legalize sports betting in the hopes that it would increase employment and bring in money from taxes. The urgency to seize these possibilities will probably lead to a patchwork of laws in various states, as well as a range of different licenses and newly approved operators.