Supreme Court allows states to legalize sports betting in historic 6-3 decision
The U.S. Supreme Court on Monday opened the door for legal sports betting across the U.S. when it struck down a 20-year-old ban on gambling in most states.
But odds are Kansas and Missouri won't legalize betting anytime soon.
The court overturned the Professional and Amateur Sports Protection Act, or PASPA, which banned gambling in all but a few states. The law, passed in 1992, grandfathered in legal sports betting at Nevada casinos and sports lotteries and pools in three other states. New Jersey challenged the law after an effort to legalize sports betting in Atlantic City.
Legislatures in Kansas and Missouri heard measures during their spring legislative sessions that would have put them in a position to legalize gambling depending on the court's ruling, but with only a few days left in Missouri's session and lawmakers adjourned in Kansas, neither state appears likely to get a bill passed this year.
Proponents of legal sports gambling say it would bring an underground market into the light and boost state tax revenue. According to the American Gaming Association, illegal gamblers nationwide bet more than $150 billion each year. The group lauded the decision in a statement Monday, saying it gave Americans "an open, transparent and responsible market for sports betting."
"Through smart, efficient regulation this new market will protect consumers, preserve the integrity of the games we love, empower law enforcement to fight illegal gambling, and generate new revenue for states, sporting bodies, broadcasters and many others," CEO Geoff Freeman said. "The AGA stands ready to work with all stakeholders — states, tribes, sports leagues, and law enforcement — to create a new regulatory environment that capitalizes on this opportunity to engage fans and boost local economies.”
The 1992 law was passed as casinos spread across the country. Former Sen. Bill Bradley, D-New Jersey, a former college and professional basketball star, said "the law was needed to safeguard the integrity of sports," according to the court ruling.
The court ruled that the law was an unconstitutional overreach. Congress, the court noted, has certain enumerated powers but not unlimited ones. Justice Samuel Alito wrote the majority opinion.
"The legalization of sports gambling requires an important policy choice, but the choice is not ours to make," Alito said. "Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own."
Justices Ruth Bader Ginsburg and Sonia Sotomayor dissented. Justice Stephen G. Breyer agreed with the majority opinion in part and the dissent in part.
Writing the dissent, Ginsburg said there was no reason to "deploy a wrecking ball" destroying the 1992 law. She argued that the court should not throw out the whole law over a portion that bars states from modifying or repealing their own bans on gambling.
"The court wields an ax to cut down (the 1992 law) instead of using a scalpel to trim the statute," Ginsburg wrote.
The National Basketball Association has supported sports betting. Major League Baseball and The Kansas City Royals didn't offer explicit support but wanted a hand in shaping the states' legislation. The NBA and MLB hired four lobbyists in Kansas and seven in Missouri this year, according to lobbyist registration records for both states.
Missouri still has a week left in its session, but only one of a slate of sports betting bills has passed out of committee. It would be difficult to get one across the finish line this year.
Rep. Justin Alferman, R-Hermann, who sponsored one of the House bills to legalize sports gambling, said the court decision was "quicker than anticipated."
"Whether we can arrive at a solution within the next week or so, I can't be sure of that," Alferman said. "But what I do know is that my phone has been ringing off the hook literally all day."
Alferman said he would meet with House leaders to potentially expedite a sports gambling bill, though it's "probably unlikely to pass" before the session ends at 6 p.m. Friday.
His bill would legalize sports gambling through Missouri's riverboat casinos, and it would tax winnings. In Missouri, proceeds the state collects from gambling must go to education.
"It is an avenue for untapped resources that could be going into education, pure as day," Alferman said.
He said Missouri residents would place bets and the state needed to take advantage of the opportunity to collect taxes so those residents don't go to Kansas, Illinois, Iowa or other bordering states.
Under another Missouri bill, sports leagues would receive 1 percent of the amount wagered on its games as a fee to maintain the integrity of the sport. Bryan Seeley, MLB's senior vice president of investigations and deputy general counsel, pushed for the fee at a hearing last month. He said MLB has opposed sports betting for more than 100 years “because it does post a risk to our game.”
Kevin Uhlich, senior vice president of business for the Royals, supported the integrity fee in a statement after the hearing.
"We feel that any law legalizing sports betting must include firm regulations and rigorous requirements on betting market operators to insulate our game from potential corruption, as nothing is more important to baseball than the trust of our fans," Uhlich said. "A high bar absolutely should be required for the right to profit on sports wagers, as we all know the risks associated."
Alferman called the fee "absolutely absurd." He said if the leagues were concerned about their games, they would have combated existing sports wagering in Nevada.
The Missouri Gaming Association took issue with the league's "integrity fee" at the April hearing because it would cut into casinos' revenue. Lobbyist Mike Winter said a similar fee would have wiped out the $1.1 million of profits that sports books made on $150 million of Super Bowl bets placed in Nevada.
In Kansas, Rep. Jan Kessinger, R-Overland Park, offered a sports betting bill that received a hearing but failed to gain much traction.
Kessinger said after the the ruling that he plans to continue pushing for sports betting.
“This is the trigger,” he said, “the catalyst for Kansas to be able to put together a good sports betting bill.”
Rep. John Barker, R-Abilene, who leads the House Federal and State Affairs committee, said he plans to write a letter to the House speaker and try to have an interim committee take up a sports betting bill.
“I think we need to look at it,” Barker said. “And if we can come up with a reasonable plan, I would be very supportive of it.”
But another key Kansas Republican was more hesitant.
“I think there will be some sensitivity (to sports betting), but I don’t know how much,” said Rep. Ron Highland, R- Wamego, who is the vice chairman of the House Federal and State Affairs committee. “And then what the predictive revenue is going to be is one of the deciding factors.”
A representative with Hollywood Casino at Kansas Speedway opposed the bill, saying the state could wait another year.
Kansas' bill and a Missouri bill offered by Rep. Dean Plocher, R-St. Louis, would both allow leagues such as the NCAA to opt out. The NCAA does not support sports gambling, which it says "has the potential to undermine the integrity of sports contests and jeopardizes the welfare of student-athletes and the intercollegiate athletics community."
Alferman's bill doesn't include a provision allowing leagues to restrict betting on their sports.