The Supreme Court cleared the way on Monday for states to legalize sports betting, striking down a 1992 federal law that had prohibited most states from authorizing sports betting.
The 6-3 ruling is a victory for New Jersey and other states who have considered allowing sports gambling as a way to encourage tourism and tax revenue. The NCAA, NFL and NBA had backed the federal prohibition.
The court said the federal law violated constitutional principles limiting the federal government from controlling state policy, unconstitutionally forcing states to prohibit sports betting under their own laws.
“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make,” Justice Samuel Alito wrote in the 6-3 opinion. “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”
Immediately after the ruling, the stock price for Caesars Entertainment rose 6%, and DraftKings said it will enter the sports betting market.
“Today’s decision clears the way for all states to make their own decisions about legalizing sports betting, and in one fell swoop gets rid of Nevada’s monopoly on the subject and the 1992 federal statute that had protected it,” said Steve Vladeck, CNN Supreme Court analyst and professor of law at the University of Texas School of Law.
“The question now is whether Congress will leave the states to make their own choices or will now try to enact some kind of federal regulation of sports betting,” Vladeck added.
New Jersey Gov. Phil Murphy celebrated the decision, which began with a lawsuit brought by former-Gov. Chris Christie.
“I am thrilled to see the Supreme Court finally side with New Jersey and strike down the arbitrary ban on sports betting imposed by Congress decades ago,” Murphy said Monday. “Today’s ruling will finally allow for authorized facilities in New Jersey to take the same bets that are legal in other states in our country.”
The controversy started in 2011, when New Jersey voters approved a measure to legalize sports betting to help the casino industries in a faltering economy. But the state law was immediately challenged by professional sports leagues and the NCAA, which pointed to a federal law passed in 1992 that bans state sports betting with some exceptions.
NCAA’s chief legal officer Donald Remy said in a statement that while the organization is still reviewing how court’s decision affects college sports, it will “will adjust sports wagering and championship policies to align with the direction from the court.”
Major League Baseball released a statement saying the decision will have “profound effects” on the sport.
“Our most important priority is protecting the integrity of our games,” MLB’s statement continued. “We will continue to support legislation that creates air-tight coordination and partnerships between the state, the casino operators and the governing bodies in sports toward that goal.”
Major American sports leagues — including the NFL, NBA and the MLB — offered cautious reaction to the news, saying they would take steps to protect the integrity of the games and called for regulatory framework.