The Supreme Court recently decided a case surrounding legalized sports betting. The case was initially filed by the federal government after the U.S. Congress passed the Professional and Amateur Sports Protection Act in 1978. The goal of the legislation was to outlaw sports betting and give the U.S. government power to regulate and oversee it.]
For decades, the legality of sports betting has been a source of controversy. Many states have outlawed sports betting, while others have allowed it under certain circumstances. In June 2018, the Supreme Court issued their opinion in PASPA v. MLB, and in parti******* affirmed the legalization of sports betting. Justices Clarence Thomas and Neil Gorsuch dissented from the opinion, which was written by Chief Justice John Roberts. In a nutshell, the Supreme Court ruled that professional sports leagues like MLB can’t stop their players from engaging in sports betting, but the federal government can. More on that below. First, let’s examine how the Supreme Court reached this decision.
The Majority Opinion
In the majority opinion, Justice Roberts determined that PASPA was a valid exercise of Congress’ authority under the Commerce Clause of the Constitution. The Constitution grants Congress the power to “regulate commerce… among the several States,” and in applying that power to PASPA, Justice Roberts wrote that Congress was acting within its authority.
However, just because Congress has the authority to regulate sports betting under the Commerce Clause doesn’t mean that it should. Congress has the power to regulate anything and everything that affects interstate commerce. In this case, Congress passed PASPA in the wake of the Black Monday stock market crash, when many Americans feared that legalized sports betting would lead to a spike in the number of people placing wagers on games. In a dissenting opinion, Justices Clarence Thomas and Neil Gorsuch wrote that PASPA was an unconstitutional exercise of Congress’ authority, arguing that it exceeded the scope of the Commerce Clause.
What Happened Before Black Monday?
Prior to the Supreme Court’s opinion in PASPA, states had legalized sports betting, and professional sports leagues had taken a hands-off approach to it. However, following the passing of PASPA, many professional sports leagues and the NCAA began to take a proactive role in curtailing sports betting. They passed their own rules against it and threatened to expel any member who participated in it. Several major professional sports leagues, including the NBA, argued that sports betting had become a significant financial threat, and they were correct. More and more people were betting on sporting events, and those wagers were putting a significant strain on the leagues’ finances.
Though it was initially passed to protect the sporting integrity of professional sports leagues, the impact of PASPA went well beyond that. According to the U.S. Department of Justice, between 1978 and 2017, the number of people involved in some form of illegal sports betting (including minors) nearly doubled: from 3.3 million to 6.5 million. This increase can largely be attributed to PASPA, as the case for legalization was already built in 1974 when this figure was 1.9 million. In fact, between 2002 and 2018, the number of people involved in illegal sports betting increased by 86%.
Why Should Congress Have Limited Its Authority?
In their dissenting opinion, Justices Thomas and Gorsuch pointed out how Congress’ authority under the Commerce Clause should have been limited to regulating commercial sports betting. They wrote:
“The only question here is whether Congress may ban all sporting sports betting… Congress’ attempt to ban all sports betting is beyond the reach of the Commerce Clause.”
They also argued that it was impossible to determine whether or not a particular wager constituted “commerce,” noting that, under PASPA, “sports betting is legal, while gambling is not.”
In his majority opinion, Justice Roberts responded by writing that it was “far from clear” that sports betting couldn’t be considered “commerce,” and even if it couldn’t, Congress could regulate it as a form of interstate commerce.
These arguments made by the dissenters reveal an important distinction between commercial and non-commercial sports betting. While most forms of gambling are illegal, it is possible to engage in some forms of sports betting non-commercially. The key question, then, is not whether or not sports betting is commerce, but whether or not it is commercial. If it is, then PASPA is valid under the Commerce Clause, as Congress has the authority to regulate it.
In their dissent, Justices Thomas and Gorsuch also pointed out that PASPA did not contain an exemption for non-commercial sports betting, leading them to believe that it could not be considered a valid exercise of Congress’ authority under the Commerce Clause.
The Federal Government Can’t Prohibit Sports Betting, But…
In their minority opinion, Justices Thomas and Gorsuch argued that even if PASPA was a valid exercise of Congress’ authority under the Commerce Clause, it could not be enforced against MLB. This is because the Professional and Amateur Sports Protection Act was written to protect the sporting integrity of professional sports leagues, not to prohibit them from limiting participation in sports betting by their members. This view was supported by a previous Supreme Court ruling that struck down the federal government’s attempt to ban sports pool betting.
In that case, U.S. v. Oakland Athletics, Inc., the Supreme Court ruled that the Professional and Amateur Sports Protection Act could not be applied to professional sports leagues and their members, as they cannot be considered “gambling establishments.” Thus, under the ruling of U.S. v. Oakland Athletics, Inc., the federal government has no authority to regulate or prohibit sports betting.
…And Now For The Bad News
Despite the apparent setback for sports betting opponents, the case was not a total loss. While the majority opinion upheld the constitutionality of PASPA, it did not completely wipe away all of its effects. Several limitations were placed on the law, primarily concerning MLB. First, the ruling makes it clear that PASPA cannot be applied to bar individual states from implementing their own legal sports betting regimes. Second, the ruling allows for the continued existence of gambling establishments in states that have chosen to legalize sports betting.
With the stroke of a pen, President Trump can now sign an Executive Order revising the rules that government agencies must follow in the implementation of PASPA. With that, the future of sports betting in America looks rather bright.