Professional sports leagues have long held that sports gambling compromises the integrity of sports, and history supports this argument. Most infamously, eight Chicago White Sox players threw the 1919 World Series for a reported payout of 20,000 dollars each, according to the Smithsonian. More recently, in 1989, Cincinnati Reds general manager Pete Rose was found guilty of gambling on his own team, according to The Rolling Stone. However, New Jersey, along with several other states, desperately wanted the revenue sports gambling would bring and decided to challenge the Professional and Amateur Sports Protection Act (PASPA) in court.
PASPA passed in the early 1990s, outlawed sports gambling in all states other than Nevada. According to the site Legal Sports Report, partial exemptions were granted for Oregon, Montana and New Jersey. New Jersey was granted one year to decide whether to accept the partial exemption for its Atlantic City casinos, but they let the time period expire and became incorporated into the law. However, two decades later in 2011, New Jersey decided that it wanted the partial exemption after all. This led to a lengthy legal battle between the major sports leagues who were opposed to sports gambling and New Jersey, who believed that it would stimulate their struggling economy.
According to USA Today New Jersey took its case to the Supreme Court, arguing that the PASPA was unconstitutional on the grounds that it violated the anti-commandeering rule. The anti-commandeering rule, derived from the tenth amendment, prevents the federal government from using coercive or physical force to make state governments enforce federal law. This rule exists to protect state governments from federal control. The tenth amendment states that the powers, not delegated to the federal government by the Constitution, are reserved for the states and the people. But if the federal government was allowed to use force with state governments, the federal government could manipulate state governments to do its bidding and therefore control the powers of states. Since PASPA, a federal law, included a clause which required state officials to take specific actions to enforce it, New Jersey successfully argued that it violated the anti-commandeering rule.
In its landmark May 2018 ruling, the Supreme Court ruled six to three that the PASPA was unconstitutional, rendering the entire law defunct. The Supreme Court noted that, while Congress could pass a law directly outlawing sports gambling, they could not order states to enforce it. According to ESPN, since PASPA was declared defunct, states have been allowed to decide whether to legalize sports gambling or not themselves. However, sports gambling could possibly be banned again if Congress so chooses, as long as the law is enforced by federal officials, not state ones.
“New Jersey, along with several other states, desperately wanted the revenue sports gambling would bring and decided to challenge the Professional and Amateur Sports Protection Act (PASPA) in court.”
USA Today reports that in the few months since the Supreme Court overturned PASPA, many states have already legalized sports gambling, including New Jersey, Pennsylvania, Rhode Island, West Virginia, Delaware, New Mexico and Mississippi. As a result, sports leagues have been forced to accept sports gambling.
According to Forbes, both the National Basketball Association (NBA) and Major League Baseball (MLB) have already struck deals with MGM Resorts, a popular casino chain. The deal calls for the NBA and MLB to transfer live data to them for sports gambling purposes. This action establishes the two major sports leagues as middlemen between gambling and their leagues with their offer of exclusive live data, incentivizing casinos to work with the NBA and MLB rather than around them. Other sports leagues are likely to make similar deals with casinos in the near future. According to NBC Sports, by working with MGM and facing sports gambling instead of turning a blind eye, leagues can maintain some control over gambling to help maintain the integrity of their sports. With the sports gambling industry quickly growing and the lack of further resistance from the major sports leagues, it seems unlikely that Congress will pass another law outlawing the industry.
According to ESPN, in Oregon, not much has changed as a result of the ruling. Oregon was one of three states partially exempted from PASPA. Sports gambling has been legally possible through the Oregon Lottery and Native American casinos for decades. Draft Kings, Fanduel and other fantasy team sites are legal, but sports gambling through other sites and locations remain illegal in Oregon. It also remains illegal to run your own sports gambling site. It is unlikely that any bill fully legalizing sports gambling will be passed until the Oregon State Legislature can figure out how to effectively tax and regulate the industry, a process that can take years.