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As The PASPA Ruling Turns 5, A Look At How Close It Came To Not Happening

Written By Steve Friess | Updated:
A Look Back At Supreme Court PASPA Ruling

We live today in a future singlehandedly created on May 14, 2018, by the US Supreme Court. On that day five years ago, Justice Samuel Alito issued this conclusion for a 7-2 majority:

“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make.”

With that, the 26-year-old Professional and Amateur Sports Protection Act was struck down and a national boom of sports betting came to be. In just five years, 37 states have legalized some form of legal sports wagering, and, as of this writing, a willing governor’s signature will make Vermont the 38th.

Once that’s done, roughly 48% of Americans will live in states with the freedom to bet on the New York Knicks to choke. The three most populous states – California, Texas, and Florida – are the biggest holdouts, accounting for more than 27% of the nation’s population. The decision launched a multibillion-dollar industry so coveted that gambling interests regarded as a mere business expense the $500 million they blew failing to get it passed in various forms via referendum in California last year.

It all has happened so fast and with such an emphatic, lopsided tally from a Supreme Court that usually is more narrowly divided on controversial topics that it feels a bit preordained. That, in fact, is why it’s worthwhile on this anniversary to realize that it wasn’t.

People remember the line above from the PASPA decision. But nobody remembers the sentence after that, the one that suggests the likelihood of a different world under different circumstances:

“Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.”

That sentence suggests an alternative reality.

Putting the responsibility on states to ban sports betting

To mark this anniversary, I went back to read over the 81-page transcript from the December 2022 hearing when the high court heard oral arguments. It is important to remember that the state of New Jersey, desperate to breathe new life into its long-failing Vegas knockoff, Atlantic City, passed a law in 2012 legalizing sports betting and proscribing a regulatory system for it. The NCAA, the NFL, Major League Baseball, the NBA, and NHL sued New Jersey to block such a move under PASPA, a 1992 federal law that prohibited states other than Nevada from doing so.

What stood out in the oral arguments is how close Congress came to passing a law that would have held up.

The question came down to whether the federal government could “commandeer” the states, which in this case is to force them to prohibit an activity that the feds themselves have not banned nationally. PASPA, you see, did not ban sports betting itself. Rather, as the attorney for the sports leagues put it in undermining his own case, PASPA regulates “the operation of sports gambling schemes. It doesn’t actually regulate sports gambling in the generic sense, and it says nothing about individuals engaging in sports gambling.”

In other words, had Congress simply banned sports betting itself in 1992, the law would likely have held up. Instead, as attorney Ted Olson argued for New Jersey in oral arguments, “PASPA is a direct command to the states without any effort to regulate sports wagering.”

The distinction is crucial. Olson repeatedly notes that Congress, via PASPA, wanted to shuffle the job of banning sports betting to the states and not expend an ounce or a muscle of federal resources to enforce it.

“What it intended to do . . . is it put the accountability, the expense, the responsibility, the burdens on the states and basically said, as the Congressional Budget Office says, it won’t have any effect on the federal budget because the federal government is doing nothing.”

This is different than, say, the federal ban on the use of cocaine. In that case, the Food and Drug Administration has placed it on a list of controlled substances that are unauthorized and unsafe, and put the Drug Enforcement Agency on the case to back that up. That’s why a state can’t just legalize cocaine. (Marijuana has long been in the same boat, but the justice department decided not to enforce those laws at the state level which is a choice an attorney general can make.)

There wasn’t a big push for sports betting in 1992

Put simply, it’s not difficult to imagine Congress in 1992 doing this differently. At the time, though, there was little political will anywhere in America to legalize sports betting. PASPA, in fact, was authored by New Jersey Sen. Bill Bradley, a former NBA player concerned about the prospect of gambling harming the integrity of pro and college sports. Twenty years later, it was his own state’s legislature that decided to buck the law and take its chances in court.

Yet, if Congress had done it right back then, it’s hard to see the gang on Capitol Hill today getting their acts together to pass a repeal that would have permitted the sports-betting nirvana we’re experiencing right now.

As we see right now on every other topic, it is rare that Congress can get anything done at all – especially controversial, difficult things. In fact, in the immediate aftermath, the NBA and NFL called on Congress to pass national standards for legal sports betting. Utah Sen. Orrin Hatch posted a statement online vowing to introduce such a bill; if he did, it clearly never went anywhere.

There were plenty of doomsday predictions after the PASPA decision came down. My favorite was from Gabriel Feldman, the director of the sports law program at Tulane Law School, who somberly told The New York Times:

“It’s called the gamblization of sports. Fans will become much more focused on gambling than following a team. It will make every second of every game of every week interesting to fans as it will give everyone something to root for.”

With hindsight, we can see that’s just not true. The vast majority of sports fans still care about their teams and the outcomes of games and seasons. But thanks to the ability to put some skin in the game, a lot of fans now also care about other games involving other teams. Both can exist at the same time without harming the original concept of team loyalty. When I place a wager against one of my favorite teams, I’m usually OK with losing it if the team pulls it off despite my pessimism.

Overall, the Supreme Court found its way to strike down PASPA and allow a new industry to flourish. But it is worth remembering that this is largely because of Congress’ overreach in 1992 and incompetence today.

God bless America.

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Steve Friess

Steve Friess writes the State of Play column for PlayUSA twice a week. He's a veteran gambling-industry reporter who began covering Las Vegas in 1996 and covered the openings of resorts in Asia, Europe, and across the U.S. His bylines have appeared in The New York Times, Playboy, New Republic, Time, BusinessWeek, Newsweek, New York magazine, and many others. He, his husband, their children and three Poms live in Ann Arbor.

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