Place Your Bets! Supreme Court Rules States Have the Choice on Sports Gambling

Supreme Court strikes down anti-gambling laws, giving each state the choice to legalize sports betting.

The Supreme Court decided to overturn a federal law on Monday that was put in place in 1992, resulting in states having the power to decide whether to legalize sports gambling. With the termination of Professional and Amateur Sports Protection Act (PASPA) it will drastically change the way many of us consume and interact with sports on a daily basis. The United States Supreme Courts cast votes resulting in a 6-3 ruling, cutting down PASPA on the state level, but not federally.

The 1992 Professional and Amateur Sports Protection Act denied legal acts of gambling within the core sports like football, baseball, basketball, soccer and NCAA sports, only allowing people to bet on single games in the state of Nevada.

Gambling researchers predict that now that legalization can occur, states like New Jersey, will move very quickly to get the ball rolling in the world of legal sports gambling. It is estimated the state will aim for legal operations opening up in two weeks, but other states’ legalization processes could be months or even years.

“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,” the ruling said.

Gambling analysis predicted before the Supreme Court’s ruling, that if PASPA were to be eliminated, 32 states would likely offer sports betting within a five year time table.

The NBA, NFL, NHL, MLB, NCAA and the federal government all opposed the state wide legalization of sports betting! Arguing that there is room for potential detrimental behavior within the integrity of the sport.

With anticipation, statehouses in the U.S. are ready to be bombarded with different types of negotiations dealing with tax rates, and charges by individual leagues and associations. Every professional sports league, casinos/gambling operations, and state governments are battling for a share of the potential billion dollar industry.

The NBA and the MLB have already discussed possible ways to get a piece of the legal gambling pie, with suggestions of certain fees that would be worth as high as 20% of total revenue.

The NBA have called the specific fee their “integrity fee,” which consists of 1% of all money wagered or bet on their league. That would average out to be about 20% of what sports betting operations typically get back in revenue.

“We are the producers of this intellectual property. The NBA will spend $7.5 billion this year creating this product, we should be compensated in some way for the use of our property.” Said NBA commissioner Adam Silver.

Outside critiques believe these proposals from the sports leagues, combined with the inflated tax rates in certain states, could hurt the legal bookmakers, and put them at a disadvantage compared to the black market. For example, Chris Grove, managing director at Eilers & Krejcik Gaming LLC, said that could show up in the form of worse odds in and on certain contests, or additional fees that could possibly make the product less competitive.

“The money is going to come from somewhere; bookmakers aren’t going to operate at a loss,” Grove said.

These issues should bring some serious concerns for states planning on legalizing sports betting any time soon. Every available entity will be trying to get a piece of the profit in the sports betting world. The difficult task will be to shift the established customers from the black market to the legal market. Fearing that the legal market could be small and the black market could remain dominate, along with complexities with the leagues, tax rates, and legal fees, the whole operation could be shut down before it has a chance to be completely up and running.