US federal court strikes down PASPA

News on 14 May 2018

In a landmark ruling, the U.S. Supreme Court, by a vote of 7 to 2, has thrown out the Federal Professional and Amateur Sports Protection Act (PASPA) in the case MURPHY, GOVERNOR OF NEW JERSEY, ET AL. v. NATIONAL COLLEGIATE ATHLETIC ASSN. ET AL..

Our readers will recall PASPA was enacted in 1992, ostensibly to protect integrity in sport.

The Act outlawed all sports pools outside of Nevada State and sports lotteries outside of the States of Oregon, Delaware, and Montana.

A separate provision in PASPA gave States who had operated licensed casino gaming for the previous ten-years (such as New Jer­sey) the opportunity to legalise sports gambling within one year of the Act’s effective date, a provision New Jersey failed to trigger by the deadline.

By 2012, looking to shore up Atlantic City’s dwindling casino industry, the New Jersey State Legislature enacted the Sports Wagering Act but was challenged by major professional sports leagues who used Federal law, PASPA, to block the attempt.

New Jersey made numerous submissions challenging PASPA through the courts claiming the Act violated the Constitution’s tenth commandment “anticommandeering principle” by preventing the State from modifying or repealing its own laws that prohibited sports gambling, but was ultimately denied by the United States Court of Appeals for the Third Circuit.

In a final bid, New Jersey took its appeal to the Supreme Court of the United States, the decision of which has been highly anticipated.

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

“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, New York, 505 U. S., at 166. The Constitu­tion gives Congress no such power.

“The judgment of the Third Circuit is reversed.”

In a statement, New Jersey State Governor Phil Murphy said he was “thrilled to see the Supreme Court finally side with New Jersey and strike down the arbitrary ban on sports betting imposed by Congress decades ago.

“New Jersey has long been the lead advocate in fighting this inherently unequal law, and today’s ruling will finally allow for authorized facilities in New Jersey to take the same bets that are legal in other states in our country.”

Murphy attributed an “incredible bipartisan effort from many in the state” for the victory, particularly former Governor Chris Christie and former State Senator Ray Lesniak.

“I look forward to working with the Legislature to enact a law authorizing and regulating sports betting in the very near future,” Murphy concluded.

New Jersey, in anticipation of this ruling, began regulatory processes months ago, inviting interested sportsbetting operators to submit their applications to the New Jersey Division of Gaming Enforcement who will oversee and regulate the sportsbetting industry in the State.

Likewise numerous terrestrial and online operators have invested in and aligned their focus towards a positive ruling for the industry, with many said to be in a position of having the capability to rollout the vertical almost instantaneously.

As Our readers will be aware, as many as eleven U.S. States have either passed or submitted new sportsbetting bills (see previous reports).

The full ruling of the court can be read here.

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