The Complete Idiot’s Guide to Sports Betting’s (Possible) Legalization in the U.S.

Every year in United States, citizens illegally wager approximately $150 to $400 billion on sports. Clearly estimates vary, but it’s certain that only a small fraction (about 3%) of sports betting occurring in the U.S. is done lawfully in Las Vegas, Nevada, the only state in which federal law permits full-fledged sports betting.

And that’s just the way it’s been for 25 years. But over the past decade, New Jersey has been fighting tirelessly to bring sports betting to the Garden State, and they’re on the brink of making it happen. Against tall odds in 2017, the Supreme Court of the United States (SCOTUS) agreed to take New Jersey’s case against the leagues — the NCAA, NFL and other pro sports leagues — and consider whether New Jersey and other states should be allowed to legalize sports betting. Now, somewhat ignorant reader, let’s talk.

New Jersey and the NCAA, NFL and Major Pro Sports Leagues Have Battled in the Supreme Court Over Sports Betting, With States’ Rights and a Big Industry on the Line

What do you mean possible legalization? I have friends who make bets with each other on sports, so you’re telling me that’s not legal?

Well no, that’s n-

Then it’s illegal?

Can you please let me finish? There aren’t laws banning wagers between friends and family. That’s fine. But there is a 1992 federal law that prevents states from allowing casinos or other entities to take bets or operate sportsbooks.

Then how to you explain Las Vegas and Nevada?

Under that federal law, the Professional and Amateur Sports Protection Act, Nevada is exempt. So it’s allowed to continue operating sportsbooks. But let’s not go there, I know you have other questions.

So basically “What Happens in Vegas, Stays in Vegas.”

No, not that at all. That’s just a marketing phrase.

Fair enough. Then what’s going on with this “possible” legalization you’re talking about?

Well, attitudes in the U.S. have really shifted in favor of sports betting in the past decade, and in favor of letting states decide if they want to legalize, tax and regulate it. A lot of cash-strapped states could really use the tax revenue, which has helped fuel this effort.

Like recreational marijuana? I mean, I’d like to be legally stoned right now.

Exactly, like marijuana. You have been giggling quite a bit so I kind of figured that.

So if people and states want sports betting, what’s the holdup?

The holdup is that 1992 law, PASPA. It remains the law of the land and allows the NCAA, NFL and major sports leagues to go to court and block states’ attempts to legalize sports betting. For a while the leagues have said that sports betting harms the integrity of the game, but that position has softened. In any case, New Jersey has been trying to find a way past the leagues and around the law for almost 10 years.

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Ten years and nothing to show for it apparently.

Not quite. The Supreme Court actually heard New Jersey’s case against the leagues (Murphy v NCAA, formerly Christie v NCAA). Sometime before the end of June, the high court will hear arguments about why the law is or is not constitutional.

Is it?

Well that’s up to the court to determine.

Then what good are you and this “explainer”? You promised some clarity.

I’m trying. It boils down to states’ rights. New Jersey’s main argument is that the federal government cannot force states to keep or enforce laws dictated by federal policy, or “commandeer” states. And therefore, they argue, the law is unconstitutional.

Wait, who’s the sports betting commander?

There is no sports betting commander. I think you heard “commandeer” — with an extra ‘e’ — from the anti-commandeering doctrine. But again, let’s not get into that.

How come I haven’t heard anything about this on “Judge Judy”?

Come on, that’s made-for-television courtroom! Can I hold your attention for one more minute? I think a lot of your friends may care about this subject.

Sure.

I think one of the takeaways here is that if New Jersey wins in the Supreme Court, the state will begin to operate sports betting in its casinos and elsewhere in its borders. And not just New Jersey — a lot of other states across the country have expressed interest in doing the same and are supporting New Jersey’s effort.

Hey, I’m just the guy eating Tostitos, but you did say there were takeaways, plural.

Right, other takeaways are that (1) a lot of people who currently have betting accounts with sportsbooks based outside the U.S. may be able to make bets through licensed operators in their states, and (2) a lot of other people — maybe friends of yours — who don’t want to make an offshore account could set up a sports betting account legally in their state. That’s potentially a tremendous shift from the effective nationwide ban that’s fueled a huge illegal sports betting market in the past 25-plus years. Estimates vary widely but about $150 to $400 billion in wagers get placed illegally every year in the U.S.

I’d like to get a piece of that.

So would a lot of states that have budget deficits.

And this case will go down when?

The court heard oral argument — please, don’t go there — in December and will issue its decision before the end of June.

Time to get some popcorn?

You bet. I mean-

Huh?

We’re done here.