Will the U.S. Supreme Court “Take a Gamble” on New Jersey’s Stance to Legalize Sports Betting?

On Tuesday, September 5, 2017, the State of New Jersey, a state horsemen’s association, and a group of policy members urged the United States Supreme Court to deem a federal law prohibiting states from authorizing sports betting unconstitutional. The Professional and Amateur Sports Protection Act (PASPA) is a federal law that directs states to maintain in effect their state-law prohibition on sports betting. New Jersey is trying to overturn the Third Circuit’s August 2016 holding that New Jersey’s attempt to repeal its sports betting prohibitions relating only to casinos and racetracks amounted to a violation of PASPA.

The State of New Jersey argues the Supreme Court should strike down a ban on sports betting because it erroneously forces states to enforce a regulation that Congress wants. New Jersey has been trying for a long time to legalize sports betting to take a share of the estimated $150 billion that is bet illegally on sports every year. New Jersey further argues that “our constitutional structure does not permit Congress to regulate interstate commerce in that matter. Under our constitution, if Congress wishes for sports wagering to be illegal, it must make the activity unlawful itself. It cannot compel states to do so.”

This issue before the Supreme Court dates back to 2012. New Jersey’s viewpoint is strongly opposed by the NCAA and the Big Four sports leagues — the National Football League, the National Basketball Association, the National Hockey League, and Major League Baseball. These groups filed suit in federal court to stop the potential betting by challenging a New Jersey law that legalized such betting. Those organizations believe they would suffer irreparable harm if sports betting was allowed, and they have continued to prevail in court relying on PASPA.

The American Gaming Association (AGA) went all-in on states’ rights, and is urging the U.S. Supreme Court to overturn PASPA. The AGA estimates that as much as $150 billion is illegal bet on sport in the U.S. each year, saying Americans earlier this year bet a total of $15 billion on just the Super Bowl and the NCAA Men’s Basketball Tournament. A regulated sports betting market would not only help reduce criminal sports betting activity, but allow states to generate substantial revenue from taxes and economic development. The AGA estimates this could be as much as $26.6 billion per year.

A decision is not expected until spring, however, a victory for New Jersey in the case could also have national implications. A victory could open the door for all states to offer sports betting, therefore ending Nevada’s near monopoly on sports betting in the U.S.

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