The Gist

In a major Tenth Amendment case, the Supreme Court of the United States, in Murphy v. NCAA, struck down the federal statute barring states1 from allowing sports gambling. Now New Jersey can start letting casinos in Atlantic City open sportsbooks.2

The good news is that the Tenth Amendment 3 is still in a coma. Yes, that is good news, because it is still hanging on and not yet completely dead. It’s just mostly dead. 4

Justice Alito, writing for the majority, cited The Tenth Amendment as the basis for the ruling. In short, since telling the states what they must or must not do, for example banning sports gambling, is not one of the enumerated powers in Section I, Article 8 of the Constitution, so Congress has no authority to do so. This is called the “anticommandeering doctrine.” The idea is that the feds can not “commandeer” the states to do its bidding. So that’s good.

The bad news is that Congress can still just make sports gambling a federal crime. Why didn’t they just do that in the first place? Because if it is a federal crime, federal resources have to be used to prosecute it. If Congress just demands the state’s make it illegal, then the states have to deal with it. The feds would rather not have to pay for their policies. This is the very reason behind the anticommandeering doctrine.

You may be asking, “is regulating sports gambling one of the enumerated powers?” Excellent question. No, it is not. But the Supreme Court long ago used the actual enumerated power to “regulate commerce  . . . among the several states” 5 as pretext to let Congress do just about anything it wants. Even things that are not commerce. Or between states. But I will leave that absurdity for another day.

Whether or not Congress has the political will to make it a federal crime is a different question. I hope they do not. It is more likely that Congress will set up a regulatory agency to make rules about how sportsbooks must operate throughout the country.

The NCAA and the NFL have already started pushing Congress to do just that. The leagues claim they would rather not have to deal with 50 different sets of rules. This, however, is completely disingenuous. Unless the NCAA and the NFL want to open their own sportsbooks, they will not be subject to the states’ different rules. They will just have to play their games, just like they do now. So what do they really want?

Money.

In a creative use of Newspeak that would make Orwell blush, the leagues are calling the money they want an “integrity fee.” They claim additional sports gambling will make them step up security to make sure their games are not fixed. That’s a pretty flimsy pretext. First, Nevada has been taking sports bets for decades and the leagues do not get an “integrity fee” from them. Second, legalizing sports betting makes it LESS likely games will compromised. In short, professional sportsbooks know by betting patterns if something looks unusual. Illegal bookies do not have this ability and would not report it if they did: “Hello, FBI? Yes, I’m taking illegal bets and it seems like an unusually large amount of money is coming in on one side. I thought you guys might want to know about it.” Yeah, that is not happening.

Sports leagues will point to the 1919 Black Sox scandal in baseball and the Boston College basketball point shaving scandal in the late 1970s to illustrate the danger of gambling. Funny thing, those scandals were orchestrated by gangsters operating completely outside of any legal framework. These calls for alarm are misplaced. ESPN analyst and former Duke basketball player Jay Bilas agrees, “This business about student-athletes . . . are going to be enticed to shave points I think is ludicrous. They are no more enticed to do that now than they were before.” 6

But, hey, some cash is going to be made and the leagues have their hands out, like good corporate welfare queens.

In sum

States can now start allowing sportsbooks and other forms of sports gambling. States will tax the legal bets. Congress can still make sports gambling completely illegal, but they are more likely to set up federal standards to regulate the industry.

The leagues will want a piece of the pie and will lobby Congress hard for a cut. They do not deserve it. 

====

Footnotes

  1. Given its history, Nevada was excepted
  2. Other states can, too, but Jersey’s desire to allow it was the impetus of the case. Although it looks like Delaware might beat them to it.
  3. “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
  4. As explained in The Princess Bride.
  5. Article I, Section 8, Clause 3 of the US Constitution
  6. As a Carolina guy, I have no problem acknowledging when a Dook guy gets something correct. Bilas nails it here.