The Supreme Court on Monday struck down a federal law that effectively banned commercial sports gambling in most states, boosting the prospect of such betting across the nation.
The case concerned New Jersey, but the court's decision opened the door for other states that are eager to allow and tax sports gambling. Americans are estimated to annually place $150 billion in illegal wagers on sports, and many states seem interested in making such wagers legal and reaping tax revenue from them.
Most of the states that want to take advantage of the ruling will have to pass legislation to allow sports books to open. Some, including New Jersey, have a head start.
Justice Samuel Alito, writing for the majority Monday, said there were good policy arguments on both sides about whether to legalize sports betting.
"Supporters argue that legalization will produce revenue for the states and critically weaken illegal sports betting operations, which are often run by organized crime," he wrote. "Opponents contend that legalizing sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports."
But the question for the Supreme Court, Alito wrote, was whether Congress had crossed a constitutional line in forcing states to do its bidding.
"The legalization of sports gambling requires an important policy choice, but the choice is not ours to make," Alito wrote. "Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own."
Five justices agreed with every part of Alito's opinion, and Justice Stephen Breyer agreed with most of it. Justice Ruth Bader Ginsburg, joined by Justice Sonia Sotomayor, dissented, saying the majority had ruled too broadly.
Ginsburg wrote that when a portion of a law violates the Constitution, the court "ordinarily engages in a salvage rather than a demolition operation," preserving what it can.
"The court wields an ax," Ginsburg wrote, "instead of using a scalpel to trim the statute."
Breyer agreed with the majority that part of the law must be struck down but said that should not have doomed the rest of the law.
The betting law, called the Professional and Amateur Sports Protection Act of 1992, prohibited states from authorizing sports gambling. Among its sponsors was then-Sen. Bill Bradley, D-N.J., a former college and professional basketball star. He said the law was needed to safeguard the integrity of sports.
The law exempted Nevada, where sports betting has long been legal, along with sports lotteries in Delaware, Montana and Oregon. Other states were given a year to opt in, but none acted in time.
In 2011, though, as casinos in Atlantic City were losing revenue, voters in New Jersey amended the state constitution to allow sports betting, and the state Legislature soon passed a law authorizing it. The four major sports leagues successfully challenged the state law as a violation of the federal one.
In 2014, the Legislature tried a new approach, partly repealing its existing bans on sports betting to allow it at racetracks and casinos. The leagues again sued and won.
The Supreme Court has said that the federal government may not commandeer state resources to achieve federal objectives. On the other hand, the court has said that the federal government may regulate all sorts of things directly and that federal laws pre-empt contrary state laws under the Constitution's supremacy clause.
In Monday's decision in the case, Murphy v. National Collegiate Athletic Association, No. 16-476, the court ruled that the 1992 law amounted to unconstitutional commandeering.
"The anti-commandeering doctrine may sound arcane," Alito said, "but it is simply the expression of a fundamental structural decision incorporated into the Constitution, i.e., the decision to withhold from Congress the power to issue orders directly to the states."
The doctrine protects state sovereignty, he wrote, and the betting law had violated it.
"It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals," he wrote. "A more direct affront to state sovereignty is not easy to imagine."
The principles announced in Monday's decision may have implications for other kinds of federal laws. When the case was argued in December, Sotomayor said some federal regulation of marijuana could be threatened by a ruling that allows sports betting.
MIXED REACTIONS
New Jersey officials and representatives of the casino industry welcomed the ruling.
"I am thrilled to see the Supreme Court finally side with New Jersey and strike down the arbitrary ban on sports betting imposed by Congress decades ago," Gov. Phil Murphy said in a statement.
The American Gaming Association, a trade group that represents casinos, predicted that the ruling would generate revenue without endangering the integrity of sports competitions.
"Through smart, efficient regulation this new market will protect consumers, preserve the integrity of the games we love, empower law enforcement to fight illegal gambling, and generate new revenue for states, sporting bodies, broadcasters and many others," association President Geoff Freeman said in a statement.
Others were more wary.
"The court's decision is monumental, with far-reaching implications for baseball players and the game we love," Tony Clark, executive director of the Major League Baseball Players Association, said in a statement. "From complex intellectual property questions to the most basic issues of player safety, the realities of widespread sports betting must be addressed urgently and thoughtfully to avoid putting our sport's integrity at risk as states proceed with legalization."
The reaction from the National Football League reflected that of other sports organizations:
"Congress has long recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events. Given that history, we intend to call on Congress again, this time to enact a core regulatory framework for legalized sports betting. We also will work closely with our clubs to ensure that any state efforts that move forward in the meantime protect our fans and the integrity of our game."
The four major U.S. professional sports leagues and the NCAA had urged the court to uphold the federal law, saying a gambling expansion would hurt the integrity of their games. They also said that with legal sports betting in the United States, they'd have to spend a lot more money monitoring betting patterns and investigating suspicious activity.
On Monday, NBA Commissioner Adam Silver and Major League Baseball issued statements saying the "integrity" of their games would remain a priority. Representatives of the National Hockey League and NCAA said they were reviewing the court's decision.
Sen. Orrin Hatch, R-Utah, said he intends to file federal legislation soon.
"The problems posed by sports betting are much the same as they were 25 years ago," Hatch said. "But the rapid rise of the Internet means that sports betting across state lines is now just a click away. We cannot allow this practice to proliferate amid uneven enforcement and a patchwork race to the regulatory bottom."
STATES PREPARE
Gambling on sports could quickly become widely available, with one research firm estimating that 32 states would likely offer sports betting within five years.
The ruling "opens up the floodgates" for sports gambling in any state that wants to have it, said Daniel Wallach, a sports law expert in Florida.
The decision had been eagerly anticipated by gamblers and the states that hope their cut of legalized sports betting can help solve budget problems. States that have already laid the legal groundwork include New Jersey, where one racetrack said it would begin taking bets within two weeks. Mississippi and West Virginia have also been preparing for sports betting, and gamblers there could be placing bets as early as this summer and certainly before the NFL season starts in September.
Delaware, too, could quickly expand beyond certain bets currently offered at its casinos. Pennsylvania and New York have also made moves to begin sports gambling. However, other states that want to allow sports betting could still see several Super Bowls come and go before people there can place legal bets close to home.
Five states have passed laws that were ready to be enacted if the Supreme Court lifted the federal ban, according to Legal Sports Report: New York, Connecticut, Pennsylvania, West Virginia and Mississippi. Another 14 are considering active bills: California, Louisiana, South Carolina, Oklahoma, Kansas, Missouri, Iowa, Indiana, Illinois, Kentucky, Michigan, Ohio, Maryland, and Rhode Island.
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Information for this article was contributed by Adam Liptak of The New York Times; by Robert Barnes of The Washington Post; by Jessica Gresko, Wayne Parry, Michael Catalini, Ben Nuckols and Steve Megargee of The Associated Press; and by Eben Novy-Williams and Ira Boudway of Bloomberg News.
A Section on 05/15/2018