The United States is a nation of laws. We have laws at the federal level, the state level, the county level, and the municipal level. Some areas may have more laws such as laws in the New York City or Alaskan boroughs or the parishes of Louisiana.
Disputes between these levels of government are governed by the Constitution of the United States Supremacy Clause which simply states “This Constitution…shall be the supreme Law of the Land”.
So you’d think that any law that the federal government makes trumps any law in the lower levels of government.
But the founders decided a few years after the Constitution was written to amend it. One of these amendments, the 10th one passed, states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
What does this have to do with sports betting? Recently a Supreme Court decision declared a federal law unconstitutional as it violated the state’s 10th Amendment rights. The law banned sports betting in all states that hadn’t made it legal by 1994.
Suddenly, states have some decisions to make.
In 1991, a US Senate sub-committee found that “sports gambling is a national problem. The harms it inflicts are felt beyond the borders of those States that sanction it.”
Many sports officials including the commissioner for the National Basketball Association, David Stern who implored Congress to take action stating “The interstate ramifications of sports betting are a compelling reason for federal legislation.”
Keep in mind, this was the same year that Sir Timothy Berners-Lee created the world’s first website and thus the internet, so online gambling was not even a concern.
The findings of the subcommittee and the insistence of major sporting organizations led to the creation of the Professional and Amateur Sports Protection Act of 1992 (PASPA) also known as the Bradley Act.
PASPA allowed for the following:
(1) a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact, or (2) a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental entity, a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly (through the use of geographical references or otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.
The next section of the law was interesting in that not only could the government sue to shut an operation down, but sports organizations could too:
The law carved out exemptions for existing operations that state laws already approved and allowed each state 1 year from the passage of the law to legalize sports gambling. This was done because New Jersey was expected to approve sports gambling. However, no state made changes to their laws and by January 1, 1994, no state could be exempt.
In 2011 New Jersey voter-approved a ballot measure creating a state constitutional amendment that would permit sports gambling. The next year, the NJ State Legislature enacted the Sports Wagering Act also known as the 2012 Act, allowing sports wagering at New Jersey casinos and racetracks.
The passage of this act led to a lawsuit filed by the National Collegiate Athletic Association (NCAA), the National Basketball Association (NBA), the National Football League (NFL), the National Hockey League (NHL), and Major League Baseball (MLB).
New Jersey agreed that the new law likely violated PASPA, but argued that PASPA violated New Jersey’s 10th Amendment’s rights that stripped the power of the state to repeal their own sports gambling ban, which the 2012 Act did.
This case went before the US District Court and found for the sports leagues.
New Jersey appealed the decision and the 3rd Circuit Court of Appeals, affirmed the lower court decision for the sports leagues, again ruling that the 2012 Act violated PASPA. However, the Appeals Court also ruled that PASPA did not prevent New Jersey from repealing any existing laws it had.
The case was appealed to the US Supreme Court by New Jersey. The case was titled Murphy v. National Collegiate Athletic Association. A similar case was combined into it that was titled NJ Thoroughbred Horsemen v. NCAA. The Court ruled in May 2018 in a 7-2 decision that parts of PASPA were unconstitutional as they violated the state’s 10th Amendment protections, and in a 6-3 decision, determined that the entire PASPA law was unconstitutional.
So with the decision, states were now free to create new legislation regarding sports betting.
As of March 2019, 9 states have approved sports betting to some extent. In addition, the federal government has started hearings on creating legislation governing sports betting.
The federal government action is being pushed by the major sports leagues as they claim that they worry that states and leagues can’t do it by themselves. However, opponents of federal legislation argue that the sports leagues are trying to “muscle-in” to get a cut of the revenue.
In either case, most states that have approved sports betting since the Murphy v. National Collegiate Athletic Association decision have set limits on how many licenses and who can run the sportsbooks.
Nevada is the granddaddy of them all when it comes to sports betting. PASPA legislation never affected Nevada as they had legalized sports betting for nearly a century.
The removal of PASPA restrictions put Nevada as the clear leader as to how states should proceed in regulating sportsbooks. The fact that they have their processes and procedures in place to ensure that everything is done on the up-and-up could be the beacon in the legal fog that states are left in with the prospect of legalized sports betting.
Many states have reached agreements on other gambling ventures such as Powerball and MegaMillions. These types of agreements could be made with Nevada to help states regulate the sportsbooks and allow for states to pool resources and share what works best for regulating the industry.
Delaware had sports betting before PASPA was passed. But it was limited. Less than a month after the Supreme Court ruling, the state expanded sports betting operations.
Prior to the ruling, Delaware allowed for parlay betting on football games via the Delaware Lottery. With the passage of the new law, Delaware allowed single-game betting and allowed the 3 casinos in the state to take sports bets.
The legislation allowed for more locations and allowed online betting for the lottery’s sports betting program.
No bets are allowed on teams that are based within the state.
The state responsible for the overturning of PASPA allowed sports betting the week after Delaware. Gambling is engrained in New Jersey, especially Atlantic City, so it was no surprise that casinos and race tracks took advantage of the new law as soon as possible.
Many of the new sportsbooks went online the same day that the law allowed for it. Some took as much as a month to get set up. As of now, multiple locations throughout the state are available for placing sports bets.
A year before the Murphy v. National Collegiate Athletic Association decision, Mississippi anticipated New Jersey would be successful in their suit. As such, Mississippi passed legislation that legalized sports betting should PASPA be repealed or overturned.
As of August 2018, Mississippi allowed sports betting to take place in person. The Mississippi Gaming Commission put off the decision to allow mobile gaming until a later time, but it is on the horizon for them to consider.
Much like Mississippi, West Virginia anticipated that PASPA wouldn’t be a barrier to sports betting in the state for long.
A law in February saw West Virginia name the West Virginia Lottery Commission as the group to regulate sports betting in the state.
Within 6 months, gamblers were legally allowed to place sports bets both in person or online.
New Mexico is an interesting case. The sport betting enterprises there aren’t acting under state law, but federal law. The Native America tribes in New Mexico operate under the auspices of a compact with New Mexico that’s governed by the Department of the Interior.
Because they’re governed under federal law, Native American tribes are allowed to make agreements with companies in other states.
And that’s exactly what the only casino taking sports bets has done via a partnership with a Nevada sportsbook management company.
The agreement allows the sportsbook to manage that aspect of the company while the tribe focuses on the other aspects of the casino.
The casino has agreed that they won’t take bets on college teams in New Mexico.
Outside of Nevada, Pennsylvania seems to have the largest privately owned assortment of places to place as sports wager.
The first bets were able to be placed in November 2018, but within a month several more opened. The following casinos in Pennsylvania are available for sports betting as of April 2019:
The legislation that was passed to allow sports betting in Pennsylvania has come under fire from professional sports organizations. The crux of their concerns deals with data security, consumer protections, and how Pennsylvania will enforce regulations. All of these concerns were brought up in a letter that the NFL wrote to the state in June. These issues are also are being used as a tool in the sporting organizations’ attempts to have Congress pass laws to replace PASPA.
As of April 2019, Rhode Island is the only state in New England that allows sports betting. The law allowing sports betting was passed in June 2018 as part of the annual budget.
The law set up the Rhode Island Lotter Commission as the overseer of sports betting and only allows for 2 licenses to be issued.
Those licenses were issued to the Twin River Lincoln Casino and Twin River Tiverton Casino, the only 2 casinos in the state.
On March 25th, 2019, the governor signed another bill into law which will allow the casinos to expand into mobile sports betting. The law took effect at the time the governor signed the bill, so the casinos have no legal time constraints as to when they can start implementing mobile gaming.
In November 2018, voters in Arkansas approved a measure to allow sports gambling in the state. As of March 2019, the Arkansas Racing Commission (the regulatory authority for sports betting) are still hashing out the regulations.
Sticking points seem to be betting on in-state teams, with colleges asking for stricter rules and protections to avoid scandals. One rule it looks like that will be implemented is that in-state college team bets will have to be done in-person at a casino.
While the ballot measure didn’t include a provision for mobile sports betting, it seems the ARC is creating regulations to allow it.
The ballot measure called for the first licenses to be issued by June and it’s anticipated that the first sports betting enterprises will be in operation by the end of 2019.
New York sees millions of gambling dollars go to neighboring states in the form of New Jersey, Pennsylvania, and Connecticut.
In 2013, while PASPA was in full effect, New York passed a law allowing sports betting. It provided for 4 licenses to be issued. However, with federal law trumping the state law, New York couldn’t legally act on it.
After the Murphy v. National Collegiate Athletic Association case, New York started the process of developing the rules and regulations to issue the 4 licenses. Sports betting could be available as soon as the end of 2019.
After Murphy legislation was introduced to expand the sports betting licensing to more than 4, but it failed. After the start of 2019, new legislation was introduced to expand sports betting that’s more likely to pass.
In addition to sports betting, New York has been having issues with fantasy sports betting. In 2016, the legislature legalized it, but a judge declared that the law violated the state constitution, therefore, fantasy sports betting was still illegal. Despite the ruling, fantasy sports gambling sites state they’ll continue to operate in New York with the legislature considers a way to fix the problem.
Oregon is one of the states that was exempted from PASPA because the state lottery had a sports betting law.
The wagering was run via the Oregon Lottery and allowed for parlay sports betting. The state eliminated the program in 2007 after the NCAA stated that since Oregon allowed sports wagering, they wouldn’t allow the state to host collegiate championship games.
New legislation was introduced early in 2019 to expand on the existing dormant law to allow sports betting.
Montana also has a law that allows for sports betting. It specifically is for fantasy sports betting on football and racing. The current wagering is offered via the Montana Lottery.
New legislation was introduced recently to offer licenses to privately operated to operate sports betting enterprises within the state. Legislation is also being considered to expand the offerings in the lottery.
In January 2019, The Sports Wagering Lottery Amendment Act of 2018 was signed by the mayor of Washington DC to allow sports betting in the nation’s capital.
Because Washington DC is not a state, but a federal district, the oversight for the district is provided by Congress. As a result, the legislative process is unique.
After a proposed law is signed by the mayor, the bill is then submitted to Congress. Congress then has 30 to 60 days file and pass “disapproval resolution” if they don’t like the new legislation. If no resolution is passed, the legislation becomes law.
The 60 day period expired March 25th, so the legislation is now law, but it will take some time to organize the regulations before licensing will start.
Gambling in Massachusetts has always been a hot potato. For years, if residents wanted to gamble, they had to drive to Foxwoods in Connecticut to gamble.
This changed in June 2015 when the Plainridge Park Casino, a slots casino opened. Three years later, the MGM Springfield opened allowing residents to not only enjoy slots but table games as well.
Massachusetts was acutely aware of how much revenue they were losing to Foxwoods and other casinos in New England and decided that they wanted a piece of the pie.
That mindset is what’s driving new legislation to allow sports betting. Massachusetts saw how much money went to Rhode Island during the Super Bowl (as the New England Patriots were a big reason for Massachusetts residents to make the 1 to 3-hour drive to Rhode Island to place their bet) and started on a path to allow sports betting.
In January the governor introduced a bill (Massachusetts is the only state in the US that allows any citizen to file proposed legislation) that would allow sports betting.
The legislation (along with a few others that have been submitted) is making the rounds in both chambers of the legislature and looks promising.
One interesting aspect of the negotiations on the proposed law is that an interesting group is asking for a “seat at the table”. Fair Play Massachusetts is a group of Massachusetts bar owners who want to be able to provide sports betting at their establishments.
They argue that allowing local bars to take bets will mean that residents won’t have to travel across the state to Springfield or Plainridge to place a bet. It also would accommodate those residents that don’t want to download an app to their phone to place a bet.
Should this be allowed, Massachusetts would be in a unique position as the only state that allows a non-gambling entity to take bets.
As of March 2019, 21 states have legislation pending but the likelihood of passage remains unsure. These states are:
While some of these states may allow sports betting (Connecticut is somewhat likely, for instance) they’re in the infancy stages of passing any law allowing it.
States that have taken no action at all on sports betting include:
Out of all of these states, the least likely to pass any sports betting legislation is Utah, as their state constitution prohibits any type of gambling in the state including lotteries and sports betting.
Like Washington DC, the federal government has more control over territories than states. At this time only Puerto Rico is considering sports betting. Other territories like the US Virgin Islands are watching closely to see how Congress reacts to Puerto Rico’s actions.
The overturning or PASPA opened up Pandora’s Box of states wanting to allow sports betting. It may seem strange that none of these states took action before PASPA’s passage. The reason is simple, gambling has grown more popular in the last 2 decades.
Not to mention sports have gained in popularity.
When PASPA was passed, the internet barely existed. Now people can view games all over the world from the comfort of their TV or computer. And the computer allows them to place bets with sites from around the world.
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