In a victory for the state of New Jersey and a setback for professional sports leagues, the Supreme Court on Monday struck down a law that bars states from allowing wagers on games.
In a 6-3 ruling, the court found that a 1992 law known as the Professional and Amateur Sports Protection Act violated states rights under the U.S. Constitution.
The upshot is that New Jersey, and other states that want to rescind existing bans on sports betting, are free to do so.
When Congress passed the law, it allowed the four states that already allowed sports betting—Nevada, Delaware, Montana, and Oregon—to keep their rules, but forbid other states from introducing it. New Jersey, which wants to bring sports betting to its casinos, challenged the law on the grounds that it unconstitutionally requires states to enforce federal law.
Justice Samuel Alito agreed, saying Congress has the power to ban sports betting but that it can’t rely on the states to do so on its behalf. He also noted how the issue has long divided Americans:
The legalization of sports gambling is a controversial subject. Supporters argue that legalization will produce revenue for the States and critically weaken illegal sports betting operations, which are often run by organized crime. 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. 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.
The four professional sports leagues—the NFL, MLB, the NHL, and the NBA—all sided with the U.S. Government in arguing that the law was constitutional.
In practical terms, the ruling could pose a blow to the state of Nevada, which holds an effective monopoly on large-scale sports betting.
And, as my colleague Polina Marinova has explained, the could also bring a flood of new business to daily “fantasy” sites like FanDuel and DraftKings, which have long operated in a legal gray area between a hobby and full-blown gambling. It could also help other companies that want to move in on an illegal betting industry that is reportedly worth $150 billion.
“The Supreme Court’s decision, which paves the way for states to legalize sports betting, creates an enormous opportunity for FanDuel as our platform, brand, and customer base provide a unique and compelling foundation to meaningfully participate,” said FanDuel in a statement.
Justice Ruth Bader Ginsburg disagreed with Monday’s decision. In a dissent supported by Justice Sonia Sotomayor, she described the ruling as “a wrecking ball” and said the majority used an axe instead of a scalpel to address the constitutional issue.