With the Supreme Court’s pending sports gambling decision, states are already prepping for legalization

The gambling world is waiting with bated breath for the United States Supreme Court decision that could result in an expansion of sports betting. The decision could be announced anytime between today and the end of June.

Since I teach sports betting regulation and gambling law, I’ve been closely watching the developments as well. Although Nevada has had a robust sports betting industry for decades, New Jersey has been at the forefront of the push to legalize sports betting.

In recent years, many other states have prepared for a ruling from the Supreme Court that would overturn the prohibition of sports betting. Even professional sports leagues – which have emerged as the leading opponents of efforts to legalize and regulate sports betting – are looking to cash in.

How we got here

According to the Tenth Amendment of the United States Constitution, “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.”

For this reason, states have traditionally overseen and regulated casino gambling. The Nevada Supreme Court specifically recognized, in a case involving the infamous Frank Rosenthal (portrayed as Ace Rothstein by Robert De Niro in the movie “Casino”), that gaming is “a matter reserved to the states within the meaning of the Tenth Amendment to the United States Constitution.”

However, in 1992, responding to concerns about the spread of state-sponsored sports wagering, Congress enacted the Professional and Amateur Sports Protection Act, also known as the Bradley Act named after its lead sponsor, then-U.S. Senator Bill Bradley.

The Bradley Act made it unlawful for any governmental entity, such as states, municipalities or Indian tribes to “sponsor, operate, advertise, promote, license, or authorize by law or compact” any sports betting. In addition, the act prohibited any individual from operating any sort of sports betting enterprise.

In the early-1990s, former U.S. Senator Bill Bradley spearheaded a bill that prohibited sports betting – with some exceptions. Rick Wilking/Reuters

However, the Bradley Act exempted four states from the prohibition: Nevada, Oregon, Delaware and Montana. Of these four states, Nevada was – and remains – the only one with full-scale sports wagering. New Jersey was given a one-year window to legalize sports wagering, but the state legislature failed to take action within the allotted time.

Fast forward to 2011. That year, New Jersey government officials decided it wanted to have regulated sports wagering, so the state introduced a referendum on a statewide ballot that would amend the state constitution to permit wagering on college, amateur, and professional sports at Atlantic City casinos and racetracks across the state.

New Jersey voters supported the ballot referendum, and in 2012 the New Jersey legislature passed a law to legalize sports wagering.

However, the major professional and college sports leagues – NCAA, NFL, MLB, NBA, and NHL – opposed the legislation, and filed a lawsuit to stop New Jersey from regulating sports wagering.

In response, New Jersey claimed that the Bradley Act was unconstitutional because it violated the state’s Tenth Amendment rights to regulate gambling in the form of sports wagering. In 2013, the Third Circuit Court of Appeals ruled in favor of the leagues and the U.S. Supreme Court declined to consider the case. The Bradley Act remained intact.

New Jersey pressed on. Having lost on the argument that legalizing sports wagering is equivalent to “authorizing” it under the existing Bradley Act, New Jersey got creative and decided to simply repeal the state’s criminal laws and regulations that prohibited sports book operations in casinos and racetracks.

Once again, the sports leagues sued to stop New Jersey. In response, New Jersey argued that it would be a violation of the Tenth Amendment if the state were prevented from repealing an existing law. Again, the lower courts and Third Circuit Court of Appeals ruled in favor of the leagues – but for the first time, the U.S. Supreme Court decided it would weigh in.

Prepping for the inevitable?

Now we await the decision.