US Overturns Federal Sports Betting Ban

US Overturns Federal Sports Betting Ban

The US Supreme Court has ruled that a 25 year old law that governs sports betting on a federal level is unconstitutional. In a dramatic 6-3 ruling, the judges essentially overturned the Professional and Amateur Sports Protection Act (PASPA) of 1992. Until now, sports betting has been limited to just one state (Nevada). The decision is expected to have far-reaching results on the global gambling industry, and will open the floodgates to scores of states changing their own gambling landscapes.

The shares in practically every listed gambling market around the world rose, following the news of the US Supreme Court's decision, and it is expected that many UK gambling companies will benefit from the ruling in the long run.

The Definition of PASPA

In 1992, then-President George H.W. Bush signed PASPA into law, banning virtually all the states from regulating sports betting. Only four states were grandfathered in due to their pre-existing sports betting legislation, namely Nevada (which was the only state at the time with state-sponsored sports bettors), as well as Oregon, Montana and Delaware.

PASPA, however, did not seem to deter the Americans population's appetite for betting on sports, and a recent estimate by the American Gaming Association states that at least $150 million is wagered on sports in the US - the vast majority of that being "illegal" betting.

Establishing State Sports Betting

Much change to the US gambling landscape can expect to be seen now that PASPA has been deemed unconstitutional. States have now been given the green light to establish their own regulated and legalized sports betting if they so wish. In reality, some of these states could have legal sports betting within three months of the federal law being repealed. Some states have already established legislation that will allow them to move very quickly in this direction, while others are still mulling their options.

Sports and gambling attorney and analyst, Daniel Wallach told USA Today that the news of the repeal was "the news every one of these states was waiting for."

"Every one of these states' legislative measures hinged on the finding of the Supreme Court that PASPA is unconstitutional," he said. "The ruling allows the states to legislate immediately and for all such laws to become effective immediately."

What do Sports Leagues Say?

While professional sports leagues were initially against the repeal of PASPA, they have slowly warmed to the idea that there is a lot of money to be made if legalized sports betting becomes a reality. As such, groups such as the NBA and the MLB have been peddling the idea of a 1% integrity fee, taken from all sports bets made before the government is paid taxes from these bets.

Naturally, gaming operators object to the integrity fee, saying that it makes legalized sports betting non-viable. Operators argue that the major professional sports leagues already earn exorbitant profits from ticket sales, concessions and advertising rights, and while they welcome the leagues' efforts to end the ban on sports betting, they do not agree that the leagues deserve to take more fees.

See our Gambling Laws page