After five-plus months of anxious waiting for sports betting stakeholders and enthusiasts, the Supreme Court of the United States delivered what once appeared to be a highly improbable scenario: a full repeal of the Professional Sports and Amateur Protection Act (PASPA) of 1992.
By a vote of 6-3, the justices declared that the federal ban on sports wagering is unconstitutional. The floodgates are now open for states to offer legal, regulated sports betting.
- What this means: According to the text from the SCOTUS decision, “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”
The long and winding road that Murphy vs. NCAA (formerly Christie vs. NCAA) rode to victory spans nearly the entirety of the current decade. It includes numerous false starts for the state of New Jersey in its efforts to legalize sports wagering in its jurisdiction, as well as dogged persistence in the face of multiple defeats at different levels of the legal system.
Immediate green light for multiple jurisdictions
The decision fully striking down PASPA was one of two possible outcomes that had been deemed as increasingly likely since the Supreme Court surprisingly agreed to take the case in late June 2017. It means that the four other states besides New Jersey that have successfully passed some sort of sports betting legislation – Mississippi, Pennsylvania, New York and West Virginia – can begin implementing a sports betting framework as soon as they deem fit.
Moreover, the numerous other states actively considering sports betting bills now enjoy greater clarity and have considerably more incentive to get legislation passed.
Multiple states now on the clock
New Jersey is naturally the state most prepared to implement sports betting in the wake of the decision. In fact, Monmouth Park, the track which was reportedly days away from being ready to offer sports betting after the 2014 law that the NFL’s injunction put on ice, is expected to push to be ready to accept wagers right away.
Delaware is also a favorite to be among the first to market. Prior to Monday’s decision it was the only state east of Las Vegas that could legally offer a sports book, though it was limited only to parlay betting on NFL games.
The aforementioned states that also have some sort of established legislative pathway to a regulated sports betting market are certain to pick up the pace in light of the decision. However, the timeframe for a rollout would undoubtedly vary from state to state. Here’s a brief overview of where each stands at present:
- Mississippi – Gaming Commission Deputy Director Jay McDaniel has previously stated that the state would need a few months to propose regulations and have them approved following a Supreme Court decision, but that implementation before the end of 2018 would be feasible.
- New York – A 2013 referendum approved sports betting in the state’s commercial casinos if it was ever legalized at the federal level. The NY State Gaming Commission will oversee all sports-betting activity as per that legislation, and the state is still considering bills that would expand sports betting to tracks and off-track betting parlors.
- Pennsylvania – The state, which legalized sports betting as part of an omnibus gaming bill in October 2017, has previously stated it would quickly be ready to act upon a favorable Supreme Court decision.
- West Virginia – The Lottery Commission which will oversee sports betting, is on record as saying the state will be ready to implement sports betting within 90 days of a Supreme Court decision.
For other states still considering sports betting bills in their current legislative sessions, issues such as the integrity fees being requested by MLB and the NBA and potential conflicts with Indian tribes could potentially delay implementation in certain cases.
A step-by-step overview of New Jersey’s journey
To fully grasp the extent of the years-long battle the Garden State waged against the powerful defendants in Murphy vs. NCAA – which also included the major professional sports leagues – a comprehensive timeline is in order:
- New Jersey residents first approve a referendum to legalize sports betting in the state in November 2011.
- The resulting Sports Wagering Act of 2012 is signed into law by Governor Chris Christie.
- The leagues successfully obtain an injunction in federal district court barring New Jersey from officially enacting the law. They also subsequently prevail in the U.S. Third Circuit Court of Appeals. However, the Appeals Court ruling states that PASPA would not stop New Jersey from repealing its own ban on sports betting and allow it to operate unregulated.
- New Jersey makes an appeal to have its case heard by U.S. Supreme Court in February 2014. The state is denied in June 2014.
- Christie signs new measure (SB2460) in October 2014 based on the Appeals Court’s conclusion that New Jersey may repeal its ban on sports betting.
- The NFL immediately seeks – and is granted — an injunction by the U.S. District Court later that month. It also subsequently prevails in the U.S Third Circuit Court of Appeals in August 2015.
- In response, New Jersey requests and is subsequently granted an en banc hearing in October 2015.
- New Jersey loses en banc hearing by a 9-3 margin in August 2016.
- New Jersey files second appeal to U.S. Supreme Court in October 2016.
- New Jersey is granted a Supreme Court hearing in June 2017.
- Oral arguments – which appear to go in favor of New Jersey – are heard in front of the Supreme Court on December 4, 2017.
This is a developing story. Be sure to follow TheLines on Twitter for the latest news and analysis on the sports betting industry.
They’ve been scoffed at when they’re referred to as athletes. Their matches have often been dismissed as falling way short of legitimate sport.
But the amount of cash already being wagered on esports and those who play them is anything but child’s play. Try $6.7 billion on for size. That’s the number projected to be bet on eports in 2018 alone based on a report by software analytics company Narus and renowned industry research firm Eilers and Krejcik Gaming.
The same study forecasts a $13 billion number by 2020. In both cases, those figures constitute both legal and illegal betting.
In other words, it ain’t exactly wagering a pack of baseball cards with your buddy on a game of Super Mario Bros. anymore.
Esports betting options could multiply quickly
There aren’t currently many options in the U.S. when it comes to legal esports wagering, by the way. The Downtown Grand in Las Vegas had the distinction of being the first U.S.-based casino to take a bet on an esports competition when it booked wagers on an Oakland-based League of Legends event in 2016. To date, it remains the only U.S.-based location in which you can place wagers on esports matches.
Naturally, that’s all poised to change drastically now with the elimination of the Professional Sports and Amateur Protection Act (PASPA).
There’s been no shortage of speculation on how extensive the U.S. sports betting market would eventually get in the wake of such a decision. However, essentially all of those projections have been based on wagers for conventional, on-field/court sporting events. Based on the aforementioned numbers, esports betting holds substantial potential, if it can enjoy enough market penetration.
Companies such as Unikrn (which counts Dallas Mavericks owner Mark Cuban as an investor), Betway, Pinnacle, William Hill and Ladbrokes have long been taking wagers on esports competitions worldwide via their websites. A repeal of PASPA opens the floodgates for not just those entities with respect to legally serving U.S.-based bettors, but casinos and other sports betting-licensed entities in states with favorable sports betting legislation, as well.
Existing esports demographics point to potentially explosive betting market
Newzoo’s Global Esports Market Report 2017 divulged the following pertinent numbers:
- Growth to 589 million esports viewers by 2020.
- Approximately half of the esports fan base is age 21-35.
- An estimated 71 percent are male.
- 62 percent of esports enthusiasts have full-time employment, and 50 percent are classified as high-income earners.
All of those numbers are certainly conducive to a particularly lucrative potential esports betting market, considering many of those demographics match or exceed those that have previously been correlated to sports betting in past studies.
Pro leagues’ involvement would likely drive betting market to new levels
There’s also an x-factor that could become increasingly common in coming years – esports tournaments and competitions based on the signature video games of the actual professional sports leagues.
Official association with the leagues will inevitably drive credibility and interest from a certain percentage of the general public that may not be familiar with or doesn’t presently take esports seriously. Heightened interest in any “wagerable” competition in turn typically results in a more robust betting market.
Coincidentally – or perhaps not – it’s the NBA, already an envelope-pusher with sports betting in more ways than one, that has broken the ice in this regard. They jumped into the esports arena in early April with the rollout of the inaugural NBA eSports League based its renowned NBA 2K video game franchise.
Amidst what were some snickers from the masses, they even held an honest-to-goodness draft night, complete with commissioner Adam Silver announcing the selections of 102 gamers that made the cut out of over 70,000 applicants. And no, the draftees didn’t emerge from their basements in pajamas to accept their official team hats.
Rather, it was a first-class event that crystallized the seriousness with which the league appears to be taking the venture. In all, the NBA 2K League boasts a total 17 esports teams, all backed by existing NBA franchises.
It’s likely the tip of the iceberg.
If the NBA meets with any success, it’s wouldn’t be a stretch whatsoever to see the more monolithic NFL eventually spring into action with a similar concept based on its legacy Madden franchise. And next month, Major League Soccer (MLS) is debuting its FIFA eClub World Cup in anticipation of the actual event.
This article was originally written on April 11, 2018.
For Ravens, Saints, and Thunder fans, making a legal bet on your teams may not happen for a long time.
Last month, lawmakers in Maryland, Louisiana and Oklahoma axed the sports betting sections of new gambling bills that would’ve gone into effect in the event that the Supreme Court of the United States decided in favor of New Jersey’s appeal that the states be allowed to create and enact sports betting legislation.
All three states are home to professional sports franchises but they’re on both ends of the political spectrum – Maryland the blue and Oklahoma/Louisiana the red.
The story in Oklahoma
Most bills that go through the legislative process start out in a committee, then head to the House and, finally, the Senate.
Gambling-related laws typically find favor in either the House or Senate, but since both bodies have to approve, they end up dead multiple times before they make it through. Once they get the approval of the House and Senate, they go to the governor’s desk.
Lawmakers in the Sooner state were happy to pass a gambling bill earlier this month that addressed a variety of gambling issues. However, an add-on piece of legislation that would’ve allowed sports betting pending the Supreme Court decision didn’t make it through.
There are many theories as to why sports betting died in this most recent attempt, particularly considering that a 10% tax would’ve applied to revenue, bringing in a decent stream of cash for the state.
- One major factor here is the state’s First Nation tribes; they don’t want to deal with competition that an influx of sportsbooks would bring.
- Another factor that could be at stake is the conservative nature of the state – sports betting is a little too ‘sinny’ for lawmakers’ stomachs.
That second possibility is less likely, mainly because those same lawmakers voted to expand gambling for casinos in the state.
What went down in Maryland
In Maryland, things were looking good for sports betting after the House passed the bill 124-14. Blowout wins like this are common and usually aren’t so decisive when the Senate votes. And, that was the case in the Old Line State.
The Senate chose not to vote on the bill before they closed up shop for the year, which means the next time a vote can take place is January 2019. By then, there’s a good chance that sports betting could be legal and functioning in multiple states.
Louisiana bill fails
On Tuesday, a bill to legalize sports betting in Louisiana parishes was shot down 6-3 by the Louisiana Senate Finance Committee. Several committee members expressed concerns about the negative effects of gambling expansion — even though a daily fantasy sports bill advanced through the Louisiana House on the same day. Senator Danny Martiny, the bill’s sponsor, worries that his state will fall behind neighboring states, potentially losing out on a lot of tourism.
“I’m not saying this is the cure all for everything but I’m telling you right now that we will lose customers and money if Mississippi and Arkansas have sports betting and we don’t,” Martiny said.
Mississippi already passed legislation to legalize sports betting if given authority by the U.S. Supreme Court. Arkansas passed daily fantasy sports legislation in 2017 but has not introduced a sports betting bill.
What this means for a post-PASPA world
There’s a perception out there that a SCOTUS decision in favor of New Jersey that repeals PASPA will unleash a 50-state cavalcade of sports-betting bill passages.
However, the recent failures of sports betting bills in these three states indicate that eradicating PASPA may not mean that every state allows sports betting.
In some states where tribal communities are home to the state’s only casinos, expanding sports betting could be seen as a threat and, therefore, reason to lobby against opening books off reservation land.
In other more conservative states like Utah, a conservative push could stymie bills and mire sports betting in endless cycles of committee meetings, House votes, and Senate shoot-downs.
While recent polling indicates that the American public is, for the first time in decades, supportive of sports gambling, things could be much more complex on a state-by-state basis.