SCOTUS declares PASPA unconstitutional; states are free to legalize sports betting

Image of race horses with jockeys on the home straight

Media, Sport and Entertainment Alert

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Finding violations of anticommandeering principles articulated in Tenth Amendment jurisprudence, the Supreme Court of the United States has overturned the Professional and Amateur Sports Protection Act, 28 U.S.C. §3702 et seq. (PASPA) in its entirety.

The majority decision delivered by Justice Samuel Alito in Murphy v. National Collegiate Athletic Assn., 584 U.S. ____(2018) concluded that no provision of PASPA is severable from the legislation as a whole. This decision paves the way for each of our states and territories to legalize, tax, regulate and even participate themselves in the multibillion-dollar sports gambling industry. Considering the gaming industry's largest trade organization has estimated that Americans wagered approximately $4.76 billion on Super Bowl LII alone, with the legal wagers totaling less than $200 million, or 4 percent, the Supreme Court's decision will redefine the industry and its economic impacts.

In Murphy v. National Collegiate Athletic Assn., New Jersey's argument focused on traditional notions of federalism, preemption and, more specifically, anticommandeering principles derived from Tenth Amendment jurisprudence. The plaintiffs/respondents (a variety of sports organizations) argued that PASPA was a lawful exercise of the federal government's authority to make a determination consistent with interstate commerce and then forbid state laws in conflict with that determination.

New Jersey, however, countered that the federal government cannot make a determination that has the effect of instructing or directing state legislation – as such direction would have the effect of the federal government controlling the state. It is not, argued New Jersey, within Congressional authority to issue direct orders to state legislatures, but only to regulate the activity of private persons.

Agreeing with New Jersey, the Supreme Court found that PASPA's ban on a state legislature "authorizing" or "licensing" sports gambling unconstitutionally interfered with states' rights by commandeering state officials to enforce federal policy, among other things. The Court went on to strike down the balance of PASPA, including prohibitions on private parties, which three dissenting justices would have left in place.

At least four states have passed affirmative legislation authorizing sports betting; fourteen states have introduced or are actively moving legislation; and a number of other states are contemplating their positions. With such proliferation, the existing patchwork quilt of gambling legislation in the United States is about to become more complex.

Learn more about the implications of this decision by contacting any of the authors.