U.S. Supreme Court Rules That States May Conduct Sports Betting

by Heidi McNeil Staudenmaier

After much speculation and anticipation, the U.S. Supreme Court today ruled that the States may conduct sports betting, and struck down the Professional & Amateur Sports Protection Act (“PASPA”). In the case of Murphy v. NCAA, the Supreme Court reversed the Third Circuit Court of Appeals’ decision against the State of New Jersey and held that PASPA violated the Constitution’s “anti-commandeering” principle. The Court further determined that no provision of PASPA is severable from the provisions directly at issue and therefore PASPA in its entirety is doomed. 

Key points from the decision:

1. Many states prohibited sports gambling when PASPA was enacted in the early 1990s, so repeal of such a state law would not only permit sports gambling in that state but also give authorization to conduct sports betting. 
2. PASPA’s provision prohibiting state authorization of sports gambling schemes violates the anti-commandeering rule:
   1. Congress cannot commandeer the legislative process of the states by directly compelling them to enact and enforce a federal regulatory program. “PASPA’s authorization provision unequivocally dictates what a state legislature may and may not do.”
   2. It is a basic principle that “Congress cannot issue direct orders to state legislatures” – and this applies whether in the case of compelling a state to enact legislation or prohibiting the state from enacting new laws.
   3. “The legislative powers granted to Congress are sizable, but they are not unlimited. The Constitution confers on Congress not plenary legislative power but only certain enumerated powers. Therefore, all other legislative power is reserved for the states, as the Tenth Amendment confirms.”
   4. PASPA’s anti-authorization provision “unequivocally dictates what a state legislature may and may not do.”
3. PASPA is not a valid preemption provision.
4. “No provision of PASPA is severable from the provisions at issue”; therefore all of PASPA is doomed.

What does this mean for the states?

For sports betting to be legal in a state which hasn’t already authorized it, the state legislature will have to repeal or amend its laws that currently prohibit sports betting in the state.

What does this mean for the tribes?

In states where tribes already conduct Class III gaming pursuant to a tribal-state gaming compact, the tribes can conduct sports betting at their tribal casinos if they have (a) an existing gaming ordinance that permits sports betting – if not, they will need to enact a new or amended gaming ordinance and obtain approval of the ordinance from the National Indian Gaming Commission; and (b) an existing compact that includes sports betting as a permissible form of Class III gaming – if not, they will need to seek to negotiate with the state a new or amended compact that includes sports betting.

Justice Alito wrote for the majority, and was joined by Justices Roberts, Kennedy, Kagan, Thomas and Gorsuch. Justice Thomas also wrote a concurring opinion. Justice Breyer concurred in part and dissented in part. Justice Ginsburg dissented and was joined by Justice Sotomayor. 

Justice Alito noted: “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. 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’ regulations’ of their citizens [citation omitted]. The Constitution gives Congress no such power.”