The Supreme Court on Monday ruled in favor of New Jersey in the case that was formerly known as Chris Christie vs. NCAA (Christie’s name has been supplanted by Phil Murphy, the state’s new governor), striking down a 25-year old federal law known as the Professional and Amateur Sports Protection Act (PASPA) that largely outlawed sports betting outside Nevada.
The court’s 6-3 decision overruled the Third Circuit Court of Appeals, saying PASPA violates the state’s 10th Amendment rights, thereby creating a path for New Jersey and other states to offer sports betting.
“Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own,” wrote Justice Samuel A. Alito Jr., for the majority. “Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not.”
What happens next?
New Jersey has been preparing in earnest for legalized sports wagering since 2012, and many locations are ready to move quickly. Monmouth Park — a racetrack on the Jersey Shore — says it could open betting windows within the next two weeks.
Casino operators in New Jersey have been anticipating Monday’s decision for months, and much of the infrastructure is already in place. Many other state legislatures will now race to add regulation that will provide the legal framework for sports gambling in each state.
What states will be next?
While New Jersey and Delaware could have betting windows open soon, states such as West Virginia and Mississippi are also poised to move quickly, said Daniel Wallach, a sports gaming law expert and attorney at Becker & Poliakoff. States such as Connecticut, Illinois, New York, Massachusetts and Rhode Island could also race to get in the game within the next 90 days.
Nearly 20 states have introduced bills that could legalize sports betting, and a 2017 report from Eilers & Krejcik Gaming estimated that as many as 32 states could offer legal sports betting within the next five years. Many state legislatures have been working on bills in anticipation of the Supreme Court’s ruling, and many were waiting to see whether the court would strike down PASPA entirely. Some places have already concluded their 2018 legislative sessions, which means those state lawmakers can’t address the matter until next year.
If I live in the Washington, D.C., area, where can I go to place an in-person bet?
New Jersey and possibly Delaware will likely be the only options in the next few weeks. West Virginia is the only state that has passed sports gambling legislation this year, so sports betting operations should up and running there soon.
In Maryland, a bill passed the House but not the Senate before the session concluded last month. Even if it had passed, the bill merely called for a November referendum to put the issue before voters.
No sports gambling legislation has been introduced in the District or Virginia.
What sports will I be able bet on?
The Supreme Court opinion means states can offer the same betting options as any other sportsbooks, including college and professional sports, horse racing, golf, combat sports and non-American sporting events.
Is there anything I won’t be able to bet on?
Some sports leagues have urged states to ban some prop bets, primarily the situational variety that can be easily impacted by a single player or decision without necessarily altering the game’s outcome. For example, the leagues don’t want to see betting lines offered on which player will commit the first foul of a game, or whether the first pitch of a game is a ball or strike.
Most sportsbooks are likely to offer single-game bets, over-under bets, prop betting, teaser bets and parlays, as Nevada sportsbooks do.
Will mobile and online betting be available?
Many bills are encouraging mobile and online betting options. Without these options, gambling advocates warn that bettors will still turn to offshore accounts and illegal bookmakers.
New Jersey sportsbooks will be able to take bets via phone or computer, but not right away. There will be a licensing process that could take weeks — possibly a few months — before books will be able to take bets remotely. Even then, only intrastate wagers will be permitted.
Can I place in-game wagers?
Like many of the details, in the absence of federal legislation, this ultimately could vary from state to state. Some of the proposed bills specifically allow for in-game betting, such as those in West Virginia and New York.
I already have accounts with DraftKings and FanDuel. Will they offer sports betting?
Both companies — the two giants in the world of daily fantasy sports — said Monday that they plan to jump into this space, and they are expected to offer a large menu of sports betting options. They already have much of the infrastructure in place, and a long list of users familiar with their platforms.
The companies will likely have to partner with specific casinos or venues, particularly on the mobile and online side of the business.
DraftKings “will enter the sports betting market” following the Supreme Court decision, the company said in its statement, and “is working with state regulatory officials to apply for operating licenses in those states that have already passed legislation authoring sports betting.”
FanDuel, meanwhile, said the decision “allows us to bring the passion and engagement we have seen among our users to new and expanded marketplaces and create a sports betting product that fans will love.”
Are the pro sports leagues happy about this?
In 2012, the five biggest sports entities in the United States sued to prevent New Jersey from entering the sports gaming business. But since then, some have altered their stance. The NBA and Major League Baseball have both said some form of legal sports gambling seems inevitable, and they have teamed together to urge states to pass bills that would help protect the integrity of their sports — while also directing some profits in the direction of the leagues.
While all of the leagues will likely take on added costs — education, monitoring and investigations, for example — they could also stand to make plenty of money through new partnerships and business opportunities.
What about the NCAA?
The world of college sports, relying on amateur student-athletes, has been resolute in its opposition of sports wagering.
“While we are still reviewing the decision to understand the overall implications to college sports, we will adjust sports wagering and championship policies to align with the direction from the court,” NCAA chief legal officer Donald Remy said in a statement Monday morning.
There has been talk that the leagues will want a percentage of the money wagered? Is that happening? Does it impact bettors?
MLB and the NBA have proposed states mandate a 1 percent kickback to the leagues for assuming added risk. They liken to this to an “integrity fee,” or a “royalty to the league.” Some states have balked and the leagues have expressed a willingness to take less than 1 percent.
Some gambling advocates say cutting into sportsbooks’ profits with such fees could force them to offer tighter odds, which could push bettors back to the illegal markets to make their wagers.
How big is the sports gambling industry?
While it’s probably impossible to accurately estimate, experts suggest that illegal betting in the United States is a $50 billion to $150 billion business — perhaps significantly more.
According to research by UNLV’s Center for Gaming Research, legal sports betting in Nevada totaled nearly $5 billion last year, led by football — both college and professional — which accounted for $1.76 billion.
A 2017 report from Eilers & Krejcik Gaming estimated that legal sports gambling could be a $6 billion industry — perhaps as much $16 billion if more states eventually get onboard.
Could this lead to corruption or scandals?
That has certainly been the big fear, which has prompted the leagues to dig in their heels on this issue for so long. The leagues know they’ll have to take on added costs to educate players and monitor betting trends to guard against any suspect activity.
But gambling advocates are quick to point out that sports gambling already takes place on a massive scale, meaning the leagues are already vulnerable to corruption.
What happens to that federal law that largely banned sports betting outside of Las Vegas?
Even with PASPA struck down, Congress could still move to establish federal guidelines that would produce uniformity from state to state. The sports leagues will likely push lawmakers to act quickly.
“A patchwork of state laws is not an efficient way to regulate sports betting which has cross-border issues,” Wallach said. “The cleanest way is a uniform solution, and there’s only one vehicle to accomplish that, via an act of Congress. I think in the next year or two, we’ll start to see some movement in Congress.”
On Dec. 7 — the same day the Supreme Court heard oral arguments in the case — Rep. Frank Pallone Jr. (D-N.J.) introduced the Gaming Accountability and Modernization Enhancement Act, or GAME Act. His proposal doesn’t set federal guidelines per se, but it does aim to remove obstacles and provide the legal framework for states to adopt sports betting.