Murphy v. NCAA: The Fall of PASPA and the Rise of Sports Gambling

With the recent Supreme Court Decision in Murphy v. NCAA, 138 S. Ct. 1461 (2018), the state of sports gambling is in flux. Like many other forms of prohibition, the Professional and Amateur Sports Protection Act (PASPA), the 1992 federal statute that prohibited the state authorization of sports gambling, was largely ineffective in curtailing the illegal market. While the exact amount is unclear, estimates put the amount of money illegally wagered on sports somewhere between $148 and $500 billion in 2015 alone. With the Supreme Court striking down PASPA as unconstitutional and opening the door to allow sports gambling legislation, many states have brought and will continue to bring sports gambling into the public sphere.

PASPA’s Origin

PASPA was passed in 1992 following a tide of public disapproval and concern related to sports gambling. With the scandal concerning Pete Rose, the manager of the Cincinnati Reds who was caught betting on baseball games, fresh on everyone’s mind, the public opinion on sports gambling was sour. A 1993 Gallup Poll found that 56% of those surveyed disapproved of making betting on sports events legal, as compared to the 41% who approved. The legislative history reflects that the goals of PASPA were threefold: stopping the spread of state-sponsored sports gambling, maintaining the integrity of professional sports, and protecting the youth in America from sports gambling.

While PASPA made it unlawful for “a governmental entity to sponsor, operate, advertise, promote, license, or authorize . . .” a range of different types of sports gambling (28 U.S.C. § 3402), it also included an exception that allowed states to be exempted if certain sports wagering schemes had previously existed in that state prior to the enactment of the Act (28 U.S.C. § 3704). Nevada was fully exempted from PASPA, while Delaware, Montana, and Oregon were allowed to maintain the limited sports wagering schemes they already had in place. PASPA also provided a one-year window for New Jersey to legalize sports betting, due in part to the lobbying of a representative from New Jersey, Robert Torricelli, who viewed legalized sports betting as an opportunity to help the growth of Atlantic City. However, New Jersey did not take advantage of this opportunity and did not pass the necessary legislation in time.

State Pushback

Over the years that followed, states started to take notice of the pervasive nature of sports gambling and the untapped tax opportunities it brought with it. In 2009, Delaware attempted to pass a law that would expand the available sports gambling opportunities within its borders. This attempt was challenged and struck down in Court for violating PASPA. In 2010, state senators from Rhode Island introduced a Joint Resolution calling on Congress to repeal PASPA. Only a month later, a subcommittee in the Iowa state senate approved a bill that would legalize sports gambling. This growing discontent with PASPA among the states eventually reached a tipping point with New Jersey, the state that was originally provided a path out of PASPA’s reach, leading the way.

In 2012, after New Jersey voters amended the state’s constitution to allow the legislature to authorize sports wagering, the legislature enacted the Sports Wagering Law. The major professional and amateur sports leagues, including the NFL, MLB, NBA, NHL, and NCAA, all banded together to fight the piece of legislation. The Third Circuit eventually settled the dispute in favor of the various leagues and upheld the constitutionality of PASPA. Yet, New Jersey was not done. In 2014, New Jersey fired back by partially repealing the current state law that prohibited sports wagering. After the leagues sued once again, the case made it all the way up to the Supreme Court.

Murphy v. NCAA

The Supreme Court, in a 6-3 decision delivered by Justice Alito, reversed the Third Circuit and held that PASPA was unconstitutional. The Court began by confirming that the New Jersey bill in question, through repealing current state law that prohibited sports gambling, did effectively authorize sports wagering schemes under PASPA. However, the Court struct down PASPA all together for violating the anticommandeering rule. Based on the Tenth Amendment of the Constitution and federalism ideals about how the two levels of government should interact, the Court held that the federal government may not issue direct orders to the states. While PASPA apologists tried to claim that the law did not affirmatively require action, the Court held that there is no meaningful distinction between compelling a state to act and prohibiting a state from acting. “That provision unequivocally dictates what a state legislature may and may not do. . . . . [S]tate legislatures are put under the direct control of Congress. It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals.” Murphy, 138 S. Ct. at 1478. After finding that the underlying provision was not severable from the rest of the Act, the Court invalidated PASPA completely.

The Future

With PASPA being struck down, the status quo, in terms of the legality of sports gambling in each state, remained the same. But states now had the option of changing that status quo within their borders by passing sports gambling legislation. Since Murphy, New Jersey, Delaware, Mississippi, West Virginia and New Mexico, all joined Nevada as states that allow full-scale legalized sports betting. With numerous other states introducing bills that will have a similar effect, gambling on sports is about to become much more prevalent within society, especially amongst those who most enjoy watching sports.

Interestingly, Congress could presumably still regulate sports wagering directly, if they so choose. A federal law that directly prohibits people from sports gambling, instead of PASPA’s approach of prohibiting the states from authorizing such wagers, would not face anticommandeering issues. Due to the supremacy of federal law, states would be preempted from passing any laws that conflict. Yet, any such federal law at this point seems unlikely. Public opinion on sports gambling has significantly shifted since 1993, and support for the legalization of the practice has continued to grow. In the 16 years since PASPA was passed, have we dealt with the issues that were supposed to be inherent in sports gambling? Most likely not. But as shown by the amount illegally wagered even with PASPA in effect, allowing states to make their own decisions on the practice might be best.

Pedraam Mirzanian is a J.D. candidate, 2020, at NYU School of Law.