The Sports-Betting Crisis is the Supreme Court’s Fault

But gambling scandals by individual players and coaches all but disappeared after the enactment of the Professional and Amateur Sports Protection Act, or PASPA. Congress enacted the law in 1992 amid widespread concern over sports betting and its corrosive influence. Law enforcement, religious leaders, and other civic groups supported the bans. Gary Bettman, the current NHL commissioner, had warned that “legalized sports betting puts the game and the players under a cloud of suspicion” and “changes fans into ‘point-spread fans’” who care more about the betting lines than the games themselves.

PASPA had two major components. First, under Section 3702(1), the law made it illegal for a “government entity” to “sponsor, operate, advertise, promote, license, or authorize by law or compact” a sports-betting operation. Second, under Section 3702(2), the law made it illegal for a “person” to “sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental agency” a sports-betting operation.

As a result, it was effectively illegal for states to either run sports-betting operations themselves or legalize and license private sportsbooks. The law grandfathered in existing legalized sportsbooks, thereby allowing the ones in Nevada to continue operating, and opened a one-year window for states like New Jersey to do the same.