Gamblers and taxing authorities rejoice. Although not directly related to our firm’s practice areas – well not really related at all – the Supreme Court of the United States recently decided in a landmark case which will have an incredible impact across the country. In Murray v. National Collegiate Athletic Assn., the Supreme Court invalidated a 1992 Federal law which effectively prohibited sports betting in almost every State. This law – known as the Professional and Amateur Sports Protection Act (“PASPA”) was enacted at a time when other forms of gambling were legalized and opponents of gambling feared universal sports betting was next. In a nutshell, the controversial PASPA provision, which was at the heart of the Supreme Court’s decision last week restricts States from operating, sponsoring or promoting sports gambling schemes.
To generate revenue and keep Atlantic City relevant, in 2012 New Jersey enacted a law authorizing sports gambling. The major sports organizations and NCAA challenged that law – citing the above-referenced PASPA provision – and the courts ultimately agreed with the Supreme Court declining to hear the appeal. In 2014 New Jersey took a second bite at the apple and enacted a law that “repealed” provisions of State law which prohibited sports betting in Atlantic City. Again, this law was challenged by the previous opponents and the lower courts again held that New Jersey’s law was expressly prohibited.
Thankfully (depending on your point of view) the Supreme Court decided to hear the case this time around. Citing the powers vested to Congress, the Court noted that absent from that list of powers is the power to issue direct orders to the governments of the States. Similarly, the Court held that Congress may not commandeer the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program. With those constitutional footings squarely in place, the Court invalidated the PASPA provision in question holding that it unequivocally dictates what a State legislature may and may not do and therefore infringes upon a State’s sovereignty.
Thus, the Supreme Court has made it clear that it is up to each State to address its own gambling legislation and gave the State of New Jersey a needed victory – especially considering that it opted not to pass sports gambling laws way back in 1992 despite being given the chance. While New Jersey is likely now off to the races to build up its sports gambling presence at the horse tracks and in Atlantic City, you can bet that other States will look to follow suit and tap into the market previously dominated by Las Vegas and the internet.
If you are interested in reading the entire opinion, click here. If you do happen to hit it big and need invaluable guidance in planning your estate, well that is something we can help with!
