Federalism

Gaming – It’s a Matter of State Sovereignty

The author is a subject area expert. Her views do not necessarily reflect those of the American Legislative Exchange Council.

During the last Super Bowl, as many as half of the 113 million viewers made some kind of a wager on the outcome of the game according to polls. However, few sports fans are aware that such bets, outside of those placed with licensed bookies in Nevada, are illegal thanks to an outdated federal law. Fewer still realize the National Football League (NFL) was the first to champion the ban and for the last 25 years has been one of the staunchest opponents of state efforts to legalize and regulate sports gambling. Last week, however, in what might signal a “softening” on the issue, the NFL voted to allow the Oakland Raiders to move from the California Bay Area to Las Vegas – the very heart of U.S. sports wagering. NFL Commissioner Roger Goodell even stated that “[in Nevada] you have a regulatory environment which actually can be beneficial.” If even the NFL is willing to take a gamble on state regulation of sports gambling, it’s time for Congress to do the same.

As a form of commerce conducted within state borders, the federal government has traditionally left gambling regulation up to the states. However, in 1992 Congress passed the Professional and Amateur Sports Protection Act (PASPA), which barred any state that hadn’t already legalized sports betting from doing so. Not coincidentally, more than a dozen states were contemplating legalization at the time. But the federal law left only Nevada free to offer legal wagering on sporting events. Congress justified the intrusion by stating that stopping the spread of sports gambling—a $40 billion industry in 1991—would protect sports from corruption and from an erosion in public trust in the games, which lawmakers saw as being in the national interest.

Twenty-five years after its enactment, though, the sports gambling market in the U.S. is somewhere between $140 billion and $500 billion, according to estimates. During March alone, Americans filled out upwards of 70 million brackets for the National Collegiate Athletics Association (NCAA) Men’s Basketball Championships. Clearly, the ban has done nothing to stop the spread of sports gambling. What it has done, as explained in the recent Competitive Enterprise Institute study, Time to End the Madness around March Madness, is prevent states that want to allow the activity from enacting consumer protections and collecting millions in potential tax revenue. Worst of all, if left on the books, PASPA represents a grave threat to federalism, one of our nation’s founding principles.

One of the states that considered legalizing sports betting legalization prior to PASPA was New Jersey. For nearly three decades, the state has been fighting to reclaim its constitutionally guaranteed power to execute the will of its citizens who, in November 2011, overwhelmingly approved a measure legalizing sports gambling. The legislature’s attempt to pass laws authorizing the activity were met with lawsuits, spearheaded by the NCAA and the NFL. Thus far, the courts have sided with the leagues, agreeing that PASPA’s prohibition isn’t unconstitutional. However, in October 2014, in an effort to abide by the will of the people without violating PASPA’s prohibition against authorizing the sports betting, the state legislature instead repealed its own laws that expressly outlawed it. Again, the leagues sued, arguing that even this was a violation of the federal law. Disturbingly, federal courts have agreed that PASPA not only bars states from legalizing sports betting but even from modifying their own laws in a way that appears to conflict with PASPA’s intent.

Sports gambling might seem like a frivolous issue, but these court opinions have wide-reaching effect and are tremendously damaging to the sovereignty of states. Should the decision stand, we would be left in the treacherous position whereby members of Congress, who are not as a body, answerable to state voters, may commandeer state governments that disagree with federal law. Regardless of political affiliation or one’s opinion on gambling, no American should want Washington to take that much control away from the states and the people they represent.

The United States Supreme Court has asked the acting Solicitor General to provide an opinion on the merits of New Jersey’s appeal, indicating that the court is interested in hearing the case. Regardless of whether SCOTUS grants them a hearing and how it rules, Congress should act to rectify the situation it created in 1992 when it enacted PASPA.

The citizens of each state deserve to have their interests represented by the state lawmakers they elected, and states should be protected from federal attempts to subjugate their will. That is what America’s system of federalism is all about—protecting states and individuals against federal overreach. The law should treat adults like adults, free to buy a lottery ticket, play a game of poker or bet on the big game if they want. It is long past time Congress repealed PASPA and let the states decide what is best for their economies and their consumers.


In Depth: Federalism

Genuine accountability to hardworking taxpayers results when state and local legislators work with members of the community to determine a plan of action that is right for each individual state, city or town. Real solutions to America’s challenges can be found in the states – America’s fifty laboratories of democracy …

+ Federalism In Depth