Supreme Court To Let States Legalize Gambling

by: The Knowledge Group

May 15, 2018


The Supreme Court, after hearing a case that was first filed by the state of New Jersey, has just struck down a 1992 law barring states from allowing sports gambling.

In a 6-3 opinion, Justice Samuel Alito wrote that the federal law violates the 10th Amendment because it is tantamount to forcing states into a federal regulatory scheme. “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”

Supporters of state-regulated betting industries welcomed the end of “Nevada’s monopoly.”

Justices Ginsburg, Sotomayor, and Breyer would have kept the law, severing problematic parts so their ruling would have only changed the rules for states, not companies.

Competing Interests

In 2011, in a troubled economy, a ballot measure in New Jersey approved legalized gambling to buttress the casino businesses. But leading college and pro sports associations challenged the state’s new position in federal court. They argued that a state legalization of sports betting is simply banned—preempted by federal law. They amplified concerns that sporting will become a gambling platform, which would cause more problems than it solves.

New Jersey tried to pass a modified law in 2014. Again, the federal courts ruled against it. Then-governor Chris Christie filed an appeal with the Supreme Court. New Jersey regards this as a states’ right issue, and now the Supreme Court has agreed with that view.

Several states backed New Jersey’s lawsuit. Bet on casino and gambling firms active in those states, and their shareholders, as the ruling’s big winners.

Meanwhile, major sports leagues are insisting that Congress create a federal regulatory scheme as the Supreme Court suggested.

Where’s the Harm?

The biggest losers, ultimately, will likely be gambling addicts and the families of gamblers.

Already, DraftKings and FanDuel—purveyors of daily fantasy sports contests for cash prizes—have shown themselves capable of airing hundreds of commercials a day, ESPN observes. The companies have signed settlement agreements with the New York Attorney General’s Office over their systematic marketing to “users with a propensity for gambling and addiction.”

We hope you join us for a webcast with insight from the Massachusetts Gaming Commission and Hodgson Russ LLP, reviewing the latest regulations surrounding Gaming and Betting on July 20th.  You can find all of the details and register by clicking here.  This webcast will also be eligable for Continuing Legal Education Credit (CLE).