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Supreme Court Sports Betting Decision Big Win for Consumers, Federalism

Today’s Supreme Court opinion in Murphy v. NCAA (formerly Christie v. NCAA) is a big win for consumers, states, and the constitutional principle of federalism. The court found on behalf of the state of New Jersey, which had attempted to legalize betting on professional and amateur sports, and invalidated the Professional and Amateur Sports Protection Act (PASPA), which Congress passed in 1992 in an attempt to limit the ability of states to allow such betting within their own borders.

My colleague Michelle Minton has been covering this issue since the beginning, and gave this statement in reaction this morning:

The Supreme Court’s decision is a huge win, not just for states that want to legalize sports betting but for everyone who believe the right to make such decisions belongs to state voters. States should now consider how best to shrink the illegal gambling market, protect consumers, and allow the marketplace to offer innovative products and experiences.

The justices of the majority made clear their position that, regardless of the legislative wisdom of allowing gambling on sports, the federal government had clearly overstepped its bounds in attempting to commandeer state sovereignty in this case:

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. PASPA “regulate[s] state governments’ regulation” of their citizens, New York, 505 U. S., at 166. The Constitution gives Congress no such power.

That, of course, echoes what Michelle has been saying for years, in publications like “Legalizing Sports Betting in the United States: A Playbook for State Liberalization and Regulation” from March 2018 to “Game Changer: Rethinking Online Gambling Regulation in the Age of Daily Fantasy Sports” (with Steven Titch) in May 2016. See also the arguments in CEI’s amicus brief in the case (with the Cato Institute and Pacific Legal Foundation) here.

In her most recent op-ed on the issue for The Hill, Michelle wrote:

Justice Kennedy, who is often the deciding vote, challenged the unusual nature of this statute: “So the citizens of the state of New Jersey are bound to obey a law that the state doesn’t want but that the federal government compels the state to have?” He also criticized PASPA because it “blurs political accountability. The citizen doesn’t know — is this coming from the federal government, is this coming from the state government? That’s precisely what federalism is designed to prevent.”

Whatever issue you care most about, the fundamental principles Justice Kennedy raised should matter to you. Federalism preserves the states’ ability to respond to the changing values of the people they serve and to experiment with new solutions to public policy problems. Without this, the federal government could block state-level reform on almost any issue, leaving state citizens with little say over how they are governed.

Now that the case has been decided, of course, the question is what will the impact be? Given that several states in addition to New Jersey have expressed interest in legalizing sports gambling in their borders, we can expect to see a robust new market for legal wagering across the country. But Michelle points out that the legal reasoning behind siding with the Garden State on sports betting could impact seemingly unrelated issues as well:

The sports gambling case will impact many other issues, including marijuana reform. Responding to their voters, many states have decriminalized marijuana or authorized its medicinal use. Those policies have enhanced patient freedom in deciding for themselves how to treat chronic illnesses; allowed addiction to be treated with education, mental health resources and less harmful alternatives; and prevented resources from being wasted on prosecuting and imprisoning people for minor offenses. Because of the success of these state reforms, another eight states liberalized their marijuana laws in the 2016 election.

[…]

The ruling on sports gambling also has implications for labor policy. The power of states to experiment with their own laws has led more than half of them to adopt right-to-work laws. These laws prevent workers from being forced to join and support unions against their will. Unions consistently have challenged right-to-work laws at the state level, and they likely would lobby Congress heavily for a federal ban on those laws. In fact, this year’s “A Better Deal” economic plan put forward by congressional Democrats would have the federal government prohibit right-to-work laws, riding roughshod over any states that think otherwise. As with sports betting, Congress is considering dictating to states what their own labor laws shall be.

In the meantime, Michelle recommends that “state legislatures should begin developing robust regulatory regimes for legal sports betting that emphasize compliance, market competitiveness, and cooperation among all stakeholders.” Looks like the burden is setting policy just shifted away from Washington, D.C. and back to the states for once.