The Supreme Court has decided to hear a New Jersey appeal against a quarter-century-old federal law banning sports gambling in all but the “grandfathered” states of Nevada, Delaware, Oregon and Montana.
Inside sports business
Our nation’s widespread prohibition of sports gambling is about to hit a crossroads at the front steps of the U.S. Supreme Court.
But whether that means anything here in our state — with some of the country’s strictest anti-gambling laws — remains to be seen. Last week, the high court decided to hear a New Jersey appeal against a quarter-century-old federal law banning sports gambling in all but the “grandfathered” states of Nevada, Delaware, Oregon and Montana.
The Professional and Amateur Sports Protection Act (PASPA) of 1992 essentially took the decision of whether to ban sports gaming out of state hands. But New Jersey Gov. Chris Christie wants to authorize gambling on sports at his state’s racetracks and Atlantic City casinos and argues PASPA unfairly blocks him from doing so.
Lower courts ruled against Christie, but that the Supreme Court even agreed to hear the case — which it does only about 1 percent of the time — in its upcoming session beginning in October is being foreshadowed as a potential New Jersey victory.
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After all, the federal law allows Nevada to operate legalized sports gambling as a prime revenue source and what’s good for one state is theoretically supposed to be good for all others, according to the constitution.
We’ll leave that interpretation up to the lawyers and judges to rule on.
But what might a New Jersey victory and a striking down of PASPA mean?
Here in Washington, maybe not much. Our state has engaged in vigorous prosecution of suspected illicit-gaming entities to a greater extent than other jurisdictions and the appetite for even softer forms of alleged “gambling” — most notably, Daily Fantasy Sports — has been limited at best.
“If PASPA is declared unconstitutional, it means basically the states will decide if they want legalized sports gambling or not,’’ said Mark Conrad, director of the sports business program at Fordham University’s Gabelli School of Business in New York. “It really falls back to state law. PASPA was intended to pre-empt states and create a national ban with the exemption of four states that were grandfathered in.’’
In other words, there would have to be pressure put on legislators here to change things.
“Washington state can still say ‘No, we don’t want to do it,’ ’’ Conrad said. “It’s the state legislators’ decision and the governor’s decision.’’
Two years ago, a push for the legalization of some fantasy sports play was made by a couple of state legislators in Olympia. Eventually, the sponsored bill was watered down to exclude Daily Fantasy Sports (DFS) play because of the bad press it was getting nationwide as an alleged “gateway” into full-blown sports wagering.
Soon after that, the movement faded.
Chris Stearns, a commissioner with the Washington State Gambling Commission — the state’s regulatory arm on gambling matters — isn’t sure a push to legalize sports betting here would catch on.
For one thing, he said, state law is very strict about any attempt at the “expansion of gambling” and moving to legalize sports betting would certainly be seen as that.
“I think that fantasy sports is probably an easier push,’’ Stearns said. “Because gambling, at least in the legal framework, is frowned upon.’’
And as mentioned, even the watered-down fantasy sports effort here two years ago went nowhere. It remains to be seen whether the public appetite for legalized sports gaming is strong enough for lawmakers to reverse our long-held stance.
Then again, big money can change anything. And there is big money to be made for states stepping into the sports-gambling business.
The American Gaming Association — a trade group representing the nation’s casino industry — estimates roughly $150 billion is wagered annually on sports in this country, 97 percent of it illegally. The group, which has long called for the repeal of PASPA, conducted a Morning Consult poll of NFL fans in various cities on their gambling views in December and January.
Of 1,334 Seahawks supporters surveyed, 48 percent favored legalized sports betting, 17 percent were opposed and 35 percent were undecided or had no opinion. If the poll — which had a margin for error of 3 percent — is at all indicative of the overall views of Washington’s sports fans, it could be seen by lawmakers here as a moneymaking opportunity.
“When you see the potential (for revenue), I think that would be a decision a number of states would consider,” Fordham University’s Conrad said. “In fact, there would be bills introduced almost immediately to legalize gambling after the decision if indeed PASPA is nullified.’’
Even pro sports once staunchly opposed to gambling have leaned toward a more regulated form of it. NBA commissioner Adam Silver and former commissioner David Stern have come out the strongest in favor, while MLB has done deals with DFS entities the past few years and the NHL has put an expansion franchise in Las Vegas.
Even the NFL, arguably the most formidable gambling opponent, is allowing the Raiders to move to Las Vegas from Oakland.
And money is indeed behind many of their shifting attitudes.
A global gaming research firm estimated in 2015 that legalized sports betting revenue could total $12.4 billion annually in the U.S. That’s about equal to all revenue generated yearly by the NFL.
And a slice of that could prove enticing to even the most conservative of anti-gambling states.
So, as to where this upcoming Supreme Court decision might lead — all bets are off.