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US Supreme Court decision paves the way for legalized sports betting in New Jersey and beyond

14 May 2018

By Dan Ippolito
In a monumental ruling today, the U.S. Supreme Court ruled in a 6-3 decision that the Professional and Amateur Sports Protection Act of 1992 (PASPA), a federal ban on sports wagering, is unconstitutional, which is expected to pave the way for legalized and regulated sports betting in the U.S. at a rapid pace.

In the case titled Murphy v. NCAA, New Jersey was fighting against the NCAA and major professional sports leagues in an attempt to have PASPA banned.

Part of the majority opinion is stated as follows:

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. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA “regulate[s] state governments’ regulation” of their citizens, New York, 505 U. S., at 166. The Constitution gives Congress no such power.

Not everyone was expecting such a clear-cut decision from the Supreme Court. Kate C. Lowenhar-Fisher, chair of Dickinson Wright’s Gaming Practice, said, “A surprisingly straightforward opinion from SCOTUS. Now we will see the true viability of the legal sports betting market in the United States. Watch for state governments learning some hard lessons about the economics of a regulated book.”

As gaming attorney Christopher Soriano, a partner at Duane Morris LLP in New Jersey, pointed out, the Supreme Court judges who ruled in favor of abolishing PASPA did not mince any words:




As expected, many throughout the gaming industry applauded today's news. The American Gaming Association (AGA) approximates that nearly $150 billion is gambled on sports each year, but is done so illegally.

AGA CEO Geoff Freeman called the decision reversing PASPA “a victory for the millions of Americans who seek to bet on sports in a safe and regulated manner.”

MGM Resorts International said in a statement that it is looking forward to "working with legislators and policy makers to achieve a regulatory outcome that benefits states and consumers alike while ensuring the integrity of sports," adding that it is "extremely well positioned for a post-PASPA environment."

Meanwhile, William Hill U.S. has had its operation in place in New Jersey for some time, and the first legal sports wager could be placed in the state as early as the beginning of June.

“We are excited, not just for ourselves, but for sports fans across the country," William Hill US CEO Joe Asher said in a statement. "We’ve been working towards this day for a long time and take great satisfaction in the Supreme Court’s decision. Just as we have with our 100-plus locations in Nevada, we look forward to working to make legal and regulated sports betting a big winner for consumers, state governments and all interested parties across the country.

"If we do this the right way, the only losers will be the illegal bookies that have been operating a massive black market. We’re going to get ready to open for business at Monmouth Park as soon as responsibly possible.”

In addition to New Jersey, four other states — Connecticut, Pennsylvania, West Virginia and Mississippi — have already passed laws to allow sports gambling. It has been estimated that as many as 20 U.S. states could follow suit within the next year.

Last week, Casino City's Gary Trask predicted that Mississippi could become "Las Vegas South," if and when sports betting is legalized in the state.



Despite all of the above optimism, Chris Grove, lead analyst at PlayUSA.com, warns that the process of regulated sports betting spreading across the U.S. will be a gradual one.

"Some states will act quickly; others will be more deliberative," said Grove, a leading gambling industry analyst. "Some states will ultimately decline to authorize regulated sports betting. But enough will move in the next five years that regulated sports betting in the U.S. will be worth more than $5 billion in revenue annually by 2023."

"The big question now: Can the leagues and gambling stakeholders reach agreement on the best way forward for regulated sports betting? If they can, the process will be dramatically accelerated. If they remain at odds, then we could see regulation move forward at a far more sluggish pace. The two sides remain far apart on their vision for regulated sports betting; today's decision will likely give them motivation to close that gap."

On the other side of the case, the professional sports leagues and NCAA who were against New Jersey were worried about the integrity of sports becoming damaged, which is why they fought against New Jersey in 2014 when the state partially repealed its own sports wagering ban.

However, now that the decision has been made, some professional leagues are looking to gain a profit from this as well. The NBA and MLB are attempting to have a fee put in place where they would receive a percentage of the total amount of betting on their respective league’s games.
 
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