In a ruling with wide-ranging applications the United States Supreme Court ruled on May 14th that the Grande Vegas casino and other gambling operations can offer sports betting in all states outside of Nevada. The court based its ruling on the 10th Amendment, saying that the Professional and Amateur Sports Protection Act (PASPA) was unconstitutional. The SCOTUS ruling paves the way for legalized sports betting across the U.S.
Justice Samuel Alito, writing for the majority, wrote “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…..the Constitution gives Congress no such power.”
The ruling, in effect, allows each state to determine whether it wishes to allow sports betting. New Jersey might well be the first. The state challenged PASPA, taking it to the Supreme Court, and has been prepping for such a ruling for years. One of the first sites that may allow sports betting, Mommouth Park, might be ready to offer sports betting opportunities within weeks. Atlantic City will probably be right behind. Former governor Chris Christie who worked to bring sports betting to the state for most of his tenure as governor was pleased with the ruling, telling ABC news that "…by Memorial Day weekend or very soon thereafter, you'll be able to place bets on your favorite sports teams".
In addition to New Jersey, four states have laid the legal groundwork for sports betting. Pennsylvania, West Virginia, New York and Mississippi are ready to start sports betting opportunities for state residents and visitors. Twelve additional states have introduced legislation that will legalize sports betting in their own states.
Sports betting brings in billions of dollars in revenues each year. For example, in 2017 Nevada's sportsbooks brought in$248.7 million in winnings on a record betting handle of $4.8 billion.
Legalized sports betting is expected to bring in millions of dollars into state coffers which will give state legislators more money to use for public works, education and public services. These are the sectors that are underfunded in almost all of the states and the possibility of filling up the state treasuries is almost too much to turn away.
In the past the sports leagues opposed repealing PASPA, saying that it would compromise the integrity of the sporting events if sports betting was allowed. However, some league officials have changed their minds. NBA Commissioner Adam Silver was quoted as saying that “We remain in favor of a federal framework that would provide a uniform approach to sports gambling in states that choose to permit it, but we will remain active in ongoing discussions with state legislatures.”
The NFL noted that “Congress has long recognized the potential harms posed by sports betting to the integrity of sporting contests” and requested that Congress “enact a core regulatory framework for legalized sports betting.”
Major League Baseball commented when West Virginia passed its sports betting legislation. MBL said that protections that would keep the integrity of games intact don't go far enough but "any sports betting legislation must include clear, robust and enforceable protections to mitigate any possible risks to our game...The law quickly advancing in West Virginia unfortunately falls short of meeting those standards. ... We would be happy to work with legislators and the Lottery Commission to improve the current language."
Brett Smiley, a noted sports attorney, has announced that the MLB and the NBA were working on a playbook that would address protections such as the need for background checks for all gaming establishment employees, prohibitions on wagers from athletes, referees, team owners, coaches and employees of sports' governing bodies or member teams and collection of real time information on operators' wagers.
In a statement released by the four unions representing the major league teams, players expressed their concerns. They said that they are “working together on the legal, commercial, practical, and human consequences of allowing sports betting to become mainstream…the time has come to address not just who profits from sports gambling, but also the costs. Our unions have been discussing the potential impact of legalized gambling on players’ privacy and publicity rights, the integrity of our games and the volatility on our businesses. Betting on sports may become widely legal, but we cannot allow those who have lobbied the hardest for sports gambling to be the only ones controlling how it would be ushered into our businesses. The athletes must also have a seat at the table to ensure that players’ rights and the integrity of our games are protected.”
The statement was released on behalf of players in the NFLPA, NBPA, MLBPA and NHLPA.
Both the leagues and the players are concerned about money. They will need to expand their investigative units to ensure that no sports-league-affiliated individuals are benefitting from sports betting. That means that they'll have to cover the costs of those investigative units.
They also want to be a part of the action – to cash in on the massive new revenues that will be hitting the leagues.
Gaming companies are in the best position to cash in on the Supreme Court’s ruling. Before the ruling Nevada had been the only state to offer complete sports betting, including opportunities to wager on single games. Now Nevada's sports books and casinos have the infrastructure in place to capitalize on impending market. These companies are preparing.
Parikshat Khanna, CEO of CG Technology, one of Nevada’s biggest bookmakers, says “We are one of the few people in the industry who have had the experience, almost a decade-long of experience, of running recent sports books in the United States….. So for us, we are totally scalable in that regard, so it’s absolutely great news for us.”
Khanna says that his company is in talks with potential partners and hopes to open a branch in New Jersey. CG is expected to be on the forefront of newly legalized sports gambling. Khanna says that the sky is the limit. “We are certainly going to make efforts wherever there is the possibility of a market.”
The nation’s casino and gambling stocks started to climb, following news of the ruling and reflecting investors' enthusiasm.