As Justice Alito expressed in his majority opinion in a 2018 Supreme Court decision, “[t]he legalization of sports gambling is a controversial subject.” Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S. Ct. 1461, 1484 (2018). Not only is the subject controversial; the effect it has on the country moving forward is unpredictable.
History
All forms of gambling were banned in most states at the beginning of the 20th century. As the 1900s progressed and regulations began to loosen, gambling began to manifest in the shape of bingo games, horseracing and state lotteries. Following the Indian Gaming Regulatory Act in 1988, many casinos were built throughout the country. As the casino industry grew, it seemed like a perfect match to combine America’s urge to wager with its passion for sports. However, sports gambling didn’t follow the casino boom, as its always been viewed in a different light.
In 1992 Congress enacted the Professional and Amateur Sports Protection Act (PASPA). PASPA made it unlawful for any state to sponsor, operate, advertise, license, or authorize by law any gambling or wagering on competitive sporting events. See generally Unlawful Sports Gambling, 28 U.S.C. § 3702 (1993). The act also made it unlawful for any person to sponsor, operate, advertise or promote the same gambling schemes, but only if it was “pursuant to the law or compact of a governmental entity”. Id. PASPA did not label sports gambling as a federal crime, but it allowed the Attorney General as well as professional and amateur sports organizations to bring civil actions to prevent individuals from violating. 28 U.S.C. § 3703 (1992). It also carved out grandfather clauses for jurisdictions that were utilizing sports gambling at the time legislation passed. See 28 U.S.C. § 3704(a)(1) (1992). Nevada was allowed to continue sports gambling in casinos, but legalized sports gambling was terminated nearly everywhere else in the country.
A Different View
There are several reasons why sports gambling has historically been looked down upon, even more so than other forms of gambling. The United States has a certain idealistic vision of sports. Athletes are often worshipped and portrayed as larger than life, while baseball is commonly referred to as our country’s pastime. This utopian view can characterize the nature of sports as simply, for lack of a better term, “American”. The dark world of gambling would corrupt and destroy American sports in many people’s minds. Former New Jersey Senator Bill Bradley, previously a professional basketball player, was one of the biggest proponents of PASPA. The force behind PAPSA, Bradley emphasized the need for a national law, like PASPA, without which there would be scandals among players who could impact games. See Dave Zirin, ‘Athletes Aren’t Roulette Chips’: Bill Bradley Speaks Out on Gambling in Sports, The Nation, (June 12, 2018), https://www.thenation.com/article/archive/athletes-arent-roulette-chips-bill-bradley-speaks-gambling-sports/.
There is a long and tumultuous history of scandals revolving around gambling in sports, with many connections to organized crime organizations. Eight members of the 1919 Chicago White Sox (infamously known as the “Black Sox”) were banned from Major League Baseball (MLB) for intentionally losing the World Series. Although the players were acquitted at trial, the Black Sox will forever remind baseball fans of the devastating history of sports gambling. William Lamb, Jury Nullification and the Not Guilty Verdicts in the Black Sox Case, Society For American Baseball Research(2015), https://sabr.org/research/jury-nullification-and-not-guilty-verdicts-black-sox-case. The 1978-1979 Boston College basketball team was involved in an unsuccessful point shaving scheme with members of organized crime families. Several players agreed to manipulate the outcomes of their games in an attempt to ensure winning bets for their partners. In 2008, a professional basketball referee, Tim Donaghy, was sentenced to 15 months in federal prison after admitting to officiating games in a calculated way in an attempt to win bets. See United States v. Donaghy, 570 F. Supp. 2d 411 (E.D.N.Y. 2008); Geoff Townsend, Tim Donaghy Sentenced to 15 Months in Prison, Bleach Report (July 29, 2008), https://bleacherreport.com/articles/42089-tim-donaghy-sentenced-to-15-months-in-prison. Illegal activity associated with sports gambling spans the greater part of a century.
Professional leagues have historically opposed legalizing sports gambling, mainly due to the potential for foul play. But the National Basketball Association (NBA), led by commissioner Adam Silver, was the first league in 2014 to publically endorse the idea of wagers being placed on their product. They suggested that gambling needed proper regulation, with the NBA profiting on what they termed as an “integrity fee”. Adam Candee, NBA’s Adam Silver On Sports Betting: ‘The Integrity Fee Is Something That We Are Entitled To’, Legal Sports Report (June 1, 2018), https://www.legalsportsreport.com/20904/nba-commissioner-adam-silver-talks-sports-betting. That fee could go a long way in putting more money in the league’s pockets. Gambling could also mean more eyeballs on games. When there is a blowout late in the 4th quarter, fans at home will change the channel, and fans in the stadium will leave their seats in an attempt to beat traffic. But despite a blowout, the final few minutes may mean the difference between a winning bet and a losing bet. Wagers could keep viewers engaged until the final buzzer. Silver pointed to countries like the United Kingdom that utilize sports gambling as proof of success. The financial reasons are apparent why a league such as the NBA would begin to advocate for the legalization of sports gambling.
A Monumental Change
As the sports landscape in the country continued to grow, so did the potential market for sports gambling. Some states began to look to cash in. In 2012, New Jersey enacted legislation to allow the state to partake in the likely goldmine. The major professional sports leagues, along with the NCAA, quickly brought an action in federal court seeking to enjoin the enforcement of the recent New Jersey law. Nat’l Collegiate Athletic Ass’n v. Christie, 61 F. Supp. 3d 488, 490-91 (D.N.J. 2014). The New Jersey District Court, citing PASPA, sided with the sports organizations and prevented New Jersey from moving forward. Id. at 508. This decision didn’t deter New Jersey. In 2014, New Jersey enacted a new form of legislation that repealed the provisions of state law that prohibited sports gambling. Eventually, New Jersey got what they were looking for, as this case went up to the Supreme Court.
In Murphy v. National Collegiate Athletic Ass’n (2018) the Supreme Court ruled in favor of the state of New Jersey and struck down PASPA. Murphy, 138 S. Ct. at 1461. Justice Alito, in the majority opinion, attempted to explain and clarify the anti-commandeering principles at stake. Id. Alito emphasized the importance that anti-commandeering has in upholding the structure of federalism. Id. at 1477. Some disagree with Alito, and question the purpose of the doctrine altogether. Steven D. Schwinn, Symposium: It’s time to abandon anti-commandeering (but don’t count on this Supreme Court to do it), SCOTUSblog (Aug. 17, 2017), https://www.scotusblog.com/2017/08/symposium-time-abandon-anti-commandeering-dont-count-supreme-court/. Ultimately the court found that PASPA violated the 10th Amendment and cited the landmark cases New York v. United States (1992) and Printz v. United States (1997). Alito stressed that Congress cannot force states to enact legislation in accordance with PASPA, and therefore it was struck down. Murphy,138 S. Ct. at 1478. However, the opinion is noticeably lacking in discussions that surround the actual subject matter of the decision – the legalization of sports gambling.
Those who oppose the decision may claim that the deliberate choice to overturn all aspects of PASPA, when only §3701 was found to be in direct violation of 10th Amendment, alludes to the policy considerations beneath the surface. Some believe the opinion reads as a pro-gambling policy decision masked in the confines of anti-commandeering and severability doctrines. As Justice Ginsburg illustrates in her dissent, “The Court wields an ax to cut down §3702 instead of using a scalpel to trim the statute.” Id. at 1490. The implications of cutting down both §3701 and §3702 change the trajectory of a multi-million-dollar industry. Congress is free to regulate sports gambling directly, but if not, states are now left to make their own choices on how to proceed.
The Next Step
After the Supreme Court decision in 2018, many states saw the golden opportunity and did not hesitate. As of the beginning of 2020, 16 states have already implemented regulated sports betting industries, and more are soon to follow with legislation pending. Legal Sports Report, Legislative Tracker: Sports Betting (updated Jan. 11, 2020), https://www.legalsportsreport.com/sportsbetting-bill-tracker/. It seems like only a matter of time until most states will begin to regulate some form of sports gambling. But the question remains, are these states making the right decision?
The dangers of legalized sports gambling may soon start to rear its ugly head in uncharted ways. In January of 2020, the MLB disciplined the Houston Astros for the illegal use of technology to steal signs from opposing teams. Their manager and general manager were ultimately fired as a result. It was a national story that caused fans to question the Astros’ 2017 World Series title, and many began to examine the integrity of the sport as a whole. Due to the recent pro-gambling legislation, a new layer appears when a story like this breaks. On January 23, 2020 a daily fantasy baseball player filed a class action lawsuit in federal court against the MLB. Brian Flood, DraftKings Fantasy Player Sues MLB, Teams Over Sign Scandal, Bloomberg Law (Jan. 23, 2020), https://news.bloomberglaw.com/class-action/draftkings-fantasy-player-sues-mlb-teams-over-sign-scandal. In his complaint, he alleges that the cheating orchestrated in the MLB from 2017-2019 unfairly compromised his wagers. Courts will now be tasked with how to approach lawsuits from gamblers who are unsatisfied with the way their bet played out.
The legalization of sports gambling may just be a natural progression in the way the public views gambling in general. Wagers will no longer have to be placed through shady underground organizations. The markets can be regulated by states and analyzed for any potential complications. Additionally, the outcries that sports gambling will corrupt the nation’s youth seem overstated. However, the issues that come with the legalization of sports gambling will have to be addressed appropriately in the near future. It seems inevitable that the general public will be able bet on the Super Bowl as simply as they can play a slot machine. Only time will tell as to the effects these wagers will have moving forward.
Bio: Matthew Netti is a student of law at Northeastern University School of Law.