Will Sports Betting Ever Be Legalized in the US?

Sep 11

In May of 2018, the U.S. Supreme Court struck down a federal law that prohibited betting on basketball, baseball, football, and other sports in the country. Prior to this ruling, full-service sportsbooks were operating legally only in Nevada. The ruling cleared the way for all the other states to legalize sports betting.

Over a year after the said ruling, though, many states are yet to make sports betting legal. Industry stakeholders are beginning to look into the reasons why betting on sports have not yet been made legal across the country, even when the Supreme Court itself has already given the go signal. Some people are even wondering if it will ever become legal in all of the United States.

The Ruling

The Supreme Court ruling came as a result of a case from New Jersey. The state has fought for several years to make sports gambling legal in casinos and racetracks within the state. They began their campaign in 2012, when they passed a law supported by voters, which allowed betting on sports. This state law challenged the 1992 federal law that says states cannot “authorize by law” sports gambling. As a result, the state was sued by the NCAA and the four major professional sports leagues and lost in court.

That loss did not stop New Jersey from trying another tactic. In 2014, the state started repealing laws that prohibited sports gambling in casinos and racetracks. Their argument was that repealing these laws did not necessarily mean they were authorizing sports gambling. They were once again taken to court and again, they lost. That was when the state decided to take the case to the Supreme Court.

Over a dozen states expressed support for New Jersey, arguing that Congress went beyond its authority when it passed the 1992 law prohibiting states from authorizing sports betting. The state of New Jersey pointed out that while the Constitution does allow Congress to bar sports betting, it does not have the authority to require states to put sports betting prohibitions in place.

As expected, the federal government, the NCAA, and the four major US professional sports leagues urged the Supreme Court to uphold the 1992 federal law. Major League Baseball, along with the NBA, NHL, and NFL argued that the planned gambling expansion of the state of New Jersey will hurt the integrity of their games. Outside the court, however, leaders of these professional leagues, with the exception of the NFL, have shown a certain degree of openness to legalized sports betting. In fact, the American Gaming Association has said that Americans spend around $150 billion on illegal sports betting each year.

The 1992 law in question only allowed state-authorized sports gambling in the states of Nevada, Montana, Oregon, and Delaware. These are states that already had some form of sports betting before the 1992 law took effect, which is why they were allowed to continue. Of the four, only Nevada legally allows individuals to bet on the results of a single game. The law, however, does not cover wagering between friends and animal races like horse racing, which is already legal in many states.

In the end, the Supreme Court ruled 6-3 to strike down the 1992 federal law, known as the Professional and Amateur Sports Protection Act. Writing for the court, Justice Samuel Alito stated: “The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not.”

This decision has shown the state of NewJersey that the years and millions of dollars it spent on legal fees were well worth it.

The Aftermath

Right after the Supreme Court ruling that awarded New Jersey the right to authorize sports betting in their state, a research firm predicted that 32 states would most likely authorize sports betting within five years. At present, there is no way to know for sure if that prediction will prove to be true. What’s clear is that there is now a regional divide as individual states discuss and decide whether to authorize sports betting or not.

Lawmakers in every state are weighing the advantages of a boost in their revenue against the morality of allowing another form of gambling. One of the considerations that has become a significant part of the decision-making process is the state’s ability to put consumer protection processes in place. There is also the task of sorting through complex business interests and the challenges posed by opposing casino-operating tribes.

By the end of this year, several states in the Northeast and Midwest could possibly start the legalization process. However, most states in the Far West and Deep South seem to have chosen to adopt a “wait and see” attitude for now. The states in the Deep South have been the most resistant, with the exception of just two.

A legalization bill passed the Senate in Louisiana earlier this year, but was struck down in the House. Republican state Senator Danny Martiny, who is in favor of legalization, said that Louisiana residents are already betting on sports in neighboring Mississippi anyway, through offshore websites, casinos, and bookies. He would rather see Louisiana taxing and regulating sports bets, with the receipts earmarked largely for early childhood education. “We have all the ills of gaming,” he said, “but none of the benefits.”

Those who oppose the legalization of sports gambling, such as Republican Rep. Valarie Hodges, argue that gambling preys on the poor and that the state can and should find better ways of paying for early education. A dispute among gambling interests about whether sports betting should be made available at truck stops and other locations where you can find video poker terminals, or limited to the four race tracks and 16 casinos of the state helped Hodges’ side win the legislative debate.

In Illinois, Maine, and New Hampshire, legalization bills are awaiting the signature of the states’ respective governors. Voters in Colorado will have the chance to decide on the matter in November. The state lottery in Oregon is currently working on regulations in hopes of launching sports betting in time for the NFL season opening. Sportsbooks have been legalized and are awaiting operation in five other states and in the District of Columbia. Seven states have already opened sportsbooks last year, soon after the Supreme Court ruling.

States Where Sports Betting Is Now Legal and Operational

To see whether there’s a chance of sports betting getting legalized in the entire country following the Supreme Court ruling that favored New Jersey, it may be a good idea to see which states have already made sports gambling legal so far.

1. Arkansas

Arkansas became the eighth state to legalize sports betting in November 2018, when voters approved the expansion of casino gaming on the midterm election ballot. Following the vote, properties were required to submit applications for sports betting by summer of 2019. Oaklawn Racing Casino Resort in Hot Springs then became the first sportsbook to open when they started operations in July.

2. Delaware

This was the first state to legalize sports betting following the Supreme Court decision. The three casinos in the state started taking bets in June 2018.

3. Indiana

Sports betting was legalized in the state in May 2019. Thirteen locations started taking bets on September 1, ten of which are casinos and the remaining three off-track betting sites.

4. Iowa

Just like Indiana, Iowa also legalized sports betting in May 2019, with individuals 21 years old and above being allowed to gamble. Several online and physical sportsbooks were launched in the state on August 15th of this year.

5. Mississippi

This state was one of the first to legalize sports betting in 2018 after the Supreme Court ruling. Since the launch of sports betting in the state on August 1, 2018, 23 properties are now offering sports betting. No mobile or online betting is allowed outside casino grounds.

6. Nevada

Sports betting has been legal in Nevada since 1949, and they had a monopoly of sorts until the 2018 Supreme Court decision allowing other states to authorize sports betting in their localities. It isn’t surprising that the state is home to the largest sportsbook in the world.

7. New Jersey

The state that opened sports betting for the others signed their own legalization law in June 2018. It is now one of the biggest markets in the city, with sports books existing at tracks, casinos, and online via mobile apps.

8. New York

The state had already passed a law in 2013 that stated sports betting will be added to casino gaming if the federal government ever lifted its ban. So, as soon as the ban was lifted, the plans crafted several years ago immediately came into play. The New York Gaming Commission approved guidelines for sports betting facilities across Upstate New York in June 2019.

9. Pennsylvania

Sports betting was officially launched in this state in November 2018. Online sports betting was then launched in May 2019.

States With Pending Launch Dates for Sportsbooks

1. Illinois

The state passed a bill to legalize sports betting in June this year. Online betting isn’t expected within the first 18 months, as casinos will be given a head start in taking bets.

2. Montana

This was the first state to legalize sports betting in 2019. The wagering will be done through kiosks and mobile applications. Efforts were made to make sure the first kiosks were ready when the NFL season opened.

3. New Hampshire

The bill for legalizing sports betting in this state was passed in June 2019. Although it has the support of Governor Chris Sununu, the bill is still awaiting his signature.

4. North Carolina

Sports betting officially became legal in this state in July 2019. The Eastern Band of Cherokee Indians are now allowed to operate retail sportsbooks in two casinos in the Appalachian Mountains, although a launch date is yet to be announced.

5. Oregon

This is one of the states grandfathered when PASPA was passed in 1992. Their gambling industry, however, was not regulated, and the recent Supreme Court decision has urged them to reintroduce sports betting with new legislation. Mobile betting is set to be introduced first, followed by retail sportsbooks.

6. Rhode Island

Sports betting was initially legalized in this state in 2018, but it did not include mobile betting. The legislation was expanded in March 2019 to include both online and mobile betting. However, no launch date has been set just yet.

7. Tennessee

Sports betting became legal in this state in April 2019. Governor Bill Lee did not sign the bill, but he did allow it to become law. The law only allows for online and mobile betting, and the launch date is yet to be announced.

8. West Virginia

Sports betting was legalized in this state in August 2018, and online betting in December 2018. DraftKings was supposed to be the first to launch in June 2019. However, the Federal Wire Act has delayed the launch.

A Special Case

Sports betting isn’t legally authorized in New Mexico. However, there are two casinos with sportsbooks in this state. These casinos are the Santa Ana Star Casino and Hotel, and the Hilton Santa Fe Buffalo Thunder. Their sportsbooks are being operated under the belief that sports wagering is a ‘Class III’ game, as provided in the Code of Regulations.

Conclusion

So, will sports betting ever be legalized in all corners of the country within the next few years? Or will strong opposition succeed in limiting it to the regions where it has already taken root? For now, the answer remains unclear. So far, our list has nine states with sports betting legalized and operational, and 8 states where sports betting is officially legal but is still awaiting a launch. The answer to the question of whether the rest of the states are going to follow suit may become a lot clearer next year.