U.S. High Court Opens Path For Sports Betting
On Monday the U.S. Supreme Court cleared the path for states to legalize sports betting, ending a federal law established in 1992 that made it illegal it in most states, and lighting a spark under businesses and states to cash in on what’s expected to be a multi-billion dollar windfall.
The justices held up New Jersey’s bid to allow legalized sports betting in a ruling that paves the way for a new era for U.S. sports leagues, who had previously sued to block the state’s sports betting law, calling sports betting a threat to the integrity of competition, due to a fear of match-fixing and other illegal activities.
The ruling sent shares in wagering companies and casinos skyward, the court down-turned the Federal “Professional and Amateur Sports Protection Act” and upheld the legality of a 2014 state law allowing sports betting at racetracks and casinos in New Jersey .
Some states look at sports betting as a lucrative source of tax revenue, much like lotteries. The American Gaming Association estimates there is around a $150 plus billion per year illegally bet on sports betting.
The new ruling brings the U.S. closer to legalized sports betting in a number of states, potentially nationwide, rather than only in states like Nevada, with the much known gambling capital of Las Vegas. The 1992 law had banned sports betting in all states outside Nevada with others such as Delaware, Montana and Oregon having limited exclusions.
The new ruling follows a trend of a lowering of restrictions on various types of gambling in the U.S. over the last decade.
The latest ruling ignited a huge surge in wagering stocks, sending many to record highs. Those specializing in wagering technology gained 10% plus. Shares in Scientific Games Corp, who build sports-betting technology and gaming tech, climbed more than 11% to a record high at the closing of the market.
Shares of racing and casino operators rose also. Churchill Downs, who operate the United State’s biggest racing event, the Kentucky Derby, rose 4.9% to a record high, while Penn National Gaming climbed a record high 4.7%. Caesars Entertainment Corp climbed 5.5%.
The United States branch of U.K sports betting company William Hill PLC, who have been working with New Jersey state officials with the goal of opening an outlet at Monmouth Park racetrack, is one such company hoping to win big. William Hill shares, which derives nearly 20% of revenue annually from the U.S., jumping almost 11% in London trading.
The Supreme Court agreed with New Jersey’s sentiment that the federal sports betting law infringed upon state sovereignty as laid out in the United States Constitution by forcing states not to license or regulate wagering on sports.
Struck down in a 6-3 vote
The courts struck down the federal law on a 6-3 vote, with the court’s 5 conservatives joined by liberal Elena Kagan. New Jersey’s law was previously ruled against by the Lower Courts.
“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,” Justice Samuel Alito wrote on behalf of the court.
It’s expected that the nation’s professional sporting leagues and players’ unions, along with dozens of states, will look for a slice of the revenue pie from legalized sports gambling.
Five other states, along with New Jersey – New York, Mississippi, Pennsylvania, Connecticut and West Virginia – already have sports wagering laws that will allow them to move quickly on the ruling.
New Jersey’s law, pushed by Republican former Governor Chris Christie, was previously challenged in court by the NFL, MLB, the NBA, the NHL and the NCAA.
The ruling could prompt U.S. Congress to consider legislation to regulate sports wagering nation-wide, a move in which the NFL said it would welcome.
“Congress has long recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events. Given that history, we intend to call on Congress again, this time to enact a core regulatory framework for legalized sports betting,” the NFL said in a statement.
Republican Senator Orrin Hatch stated that he would bring in legislation to “establish fundamental standards for sports wagering” and allow states to decide within their own ranks whether to legalize it or not.
President of the American Gaming Association, Geoff Freeman, stated that his group intends to work with states, leagues and law enforcement “to create a new regulatory environment that capitalizes on this opportunity to engage fans and boost local economies.”
Professional sports leagues have started to change their own views on sports wagering. Las Vegas now has an National Hockey League team (Vegas Knights) with an NFL team also on the way, and NBA’s commissioner, Adam Silver, has called for sports betting to be legalized to enable proper regulation.
DraftKings Inc, a Daily sports fantsy company stated that they were thinking about entering the sports wagering business following the ruling.
New Jersey’s current law allows people age 21+ to wager on sports at New Jersey racetracks and casinos, but would ban betting on college sports playing in the state.
Visit our selection of the most popular legal sports betting sites.
