Giving new significance to recently passed legislation in Connecticut, the U.S. Supreme Court agreed Tuesday to review New Jersey’s challenge of a federal law that has stopped the expansion of sports betting beyond a handful of states for the past quarter century.
The court will review the question of sports betting in the term that opens in October, possibly returning to all states in 2018 the responsibility for deciding if they are ready to legalize and profit from wagering on everything from NFL games to collegiate sports.
Connecticut legislators now seem prescient: Three weeks ago, they passed a bill directing the Department of Consumer Protection to prepare for the possibility of sports betting by adopting regulations “to regulate wagering on sporting events to the extent permitted by state and federal law.”
The bill was part of the horse trading that smoothed the way for final passage by the state House of Representatives of legislation authorizing the Mashantucket Pequot and Mohegan tribal nations to jointly develop a casino off I-91 in East Windsor to compete with the MGM Resorts casino under construction in Springfield.
Gov. Dannel P. Malloy signed the casino authorization bill Tuesday.
As a consolation to Sportech, which saw the East Windsor casino as undercutting its off-track betting facilities in Windsor Locks, Hartford, Manchester and New Britain, the legislature raised the cap on OTB licenses from 18 to 24. In what seemed like a throwaway, a single sentence in the bill also pushed the Department of Consumer Protection to prepare for the advent of sports betting.
If the federal law is struck down, Connecticut still would have to change its laws to allow wagering on sports.
Ted Taylor, the president of Sportech in Connecticut, has left no doubt that his company would seek rights to sports betting as an expansion of its exclusive right to offer pari-mutuel wagering on out-of-state horse and dog racing and jail alai.
“It’s a business that we’re in, and I think the state should be looking at it very carefully,” Taylor said Tuesday in an interview. “The state needs the tax revenue.”
Taylor said illegal sports betting is commonplace in the U.S.
“It’s not regulated and it’s not taxed, and I think it should be,” he said.
Sports betting was legalized in Nevada in 1949. With other states seemingly interested in the business, Congress passed the Professional and Amateur Sports Protection Act in 1992, a bill known as PASPA. Its most prominent sponsor was a former NBA star, Sen. Bill Bradley of New Jersey.
The federal law limited sports books to Nevada and three other states that already had limited sports betting in connection with their state lotteries: Montana, Delaware and Oregon.
New Jersey, by referendum in 2012 and then by legislative action, passed laws permitting sports wagering at the state’s racetracks. The NCAA and professional sports leagues sued, twice prevailing at the U.S. Court of Appeals for the Third Circuit.
New Jersey appealed to the U.S. Supreme Court, saying Congress had overreached by usurping an authority that belonged to the states.
“This federal takeover of New Jersey’s legislative apparatus is dramatic, unprecedented, and in direct conflict with this Court’s Tenth Amendment jurisprudence barring Congress from controlling how the States regulate private parties,” the state said in its petition. “Never before has congressional power been construed to allow the federal government to dictate whether or to what extent a State may repeal, lift, or otherwise modulate its own state-law prohibitions on private conduct.”
Last month, the Trump administration’s acting solicitor general, Jeffrey B. Wall, urged the court to deny New Jersey’s petition.
The NCAA argued in a brief to the court that New Jersey’s petition is similar to an earlier request denied by the court.
“Although petitioners lost that case every step of the way, New Jersey was undeterred in its efforts to bring legalized sports gambling to its casinos and racetracks,” the NCAA said.
The NCAA said PAPSA was a well-considered effort to protect the integrity of amateur and professional sports:
“After a robust debate and extensive hearings, Congress concluded that although ‘sports gambling offers a potential source of revenue,’ the risk to the reputation of one of our Nation’s most popular pastimes, professional and amateur sporting events, is not worth it.”