Sports betting possible in Florida after SCOTUS ruling
The U.S. Supreme Court has struck down a federal law that banned sports betting in almost every state, opening the door to another form of gaming in Florida if the Legislature authorizes it.
The 7-2 ruling, in a case brought by the state of New Jersey, found that a 1992 law known as the Professional and Amateur Sports Protection Act (PASPA), which prohibits states from authorizing and licensing sports gambling, violates the anti-commandeering rule of the U.S. Constitution.
“Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own,” wrote Justice Samuel Alito in the opinion for the court. The federal law ” ‘regulates state governments’ regulation’ of their citizens. The Constitution gives Congress no such power.”
Florida law currently does not authorize any form of sports betting. For sports betting to become legal, the Legislature, or voters by referendum, would have to authorize it.
A proposal before voters on the November ballot, the Voter Control of Gambling amendment, would require a voter referendum before any additional gambling in Florida is allowed.
Marc Dunbar, an attorney for several gaming interests, warned that if voters approve the proposed Amendment 3 on the November ballot, sports betting would be off the table until a referendum passed.
“Florida is uniquely positioned to take advantage of sports betting,” Dunbar said.
Because the margins are narrow from the wagers, it is the ancillary spending from gamblers who flock to hotels and gaming venues where the money is made, he said. Sports betting today is only allowed in Las Vegas, and the hotel industry profits off big sporting events as a result.
“If you are in the hotel industry and you realize what is happening with March Madness in Vegas today, you would be a fool to vote for Amendment 3,” he said.
But John Sowinski, director of No Casinos, said the ruling provides another reason to support the amendment.
“The more the landscape changes, the more it makes sense for voters to have a say on the issue,” he said. “The question is if we have it in the state, should it be authorized by legislators who are influenced by gambling interests or by the voters?”
No Casinos organized the campaign for Amendment 3 with $16 million in funding, primarily from Disney and the Seminole Tribe.
Dunbar said the ruling provides another opportunity for the Florida Legislature to update its gaming laws before the November election. Florida legislators considered convening a special session this month to update the laws and the gaming compact with the Seminole Tribe, but they could not reach agreement on the terms of the session and rejected it.
“I know I represent the industry but this is a compelling reason why they may want to reconsider a special session,” he said. “If anything, it’s an exclamation point on why people should vote no on Amendment 3.”
Justice Ruth Bader Ginsburg dissented in the opinion, and Justice Sonia Sotomayor joined, arguing that there is no reason for the court to take a “wrecking ball” to the federal law in its entirety.
“When a statute reveals a constitutional flaw, the court ordinarily engages in a salvage rather than demolition operation,” she wrote. “It limits the solution to severing any problematic portions while leaving the remainder intact.”
The court ruling Monday marks a major victory for former New Jersey Gov. Chris Christie, who challenged the law, and a defeat for the NCAA, NBA, NHL and NFL, which had urged the court to uphold the law.
They argued that while Congress recognized the potential source of revenue sports betting would create, “the risk to the reputation of one of our nation’s most popular pastimes — professional and amateur sporting events — is not worth it.”
Sports betting allows gamblers to bet on everything from which team is going to win a ball game to which player is going to fumble.
“Sophisticated odds makers, who do a ridiculous amount of algorithms, place risk in a way to balance the odds on each side,” Dunbar explained. As a result, the margins are smaller for the house in a sports betting book than a traditional parimutuel book, providing revenues of about 4 to 5 percent of the total wager, compared to 20 percent for a horse track, he said.
Congress passed the law in 1992 to preserve what members felt was the integrity of the games. But with the advent of the Internet, a thriving underground sports betting industry has exploded, estimated at about $150 billion in annual profits — surpassing the $5 billion bet each year in Nevada.
New Jersey is primed to be the first to authorize sports betting outside Las Vegas, and Mississippi is likely to be next, Dunbar said. Christie, who left office in January, signed the New Jersey law legalizing sports betting in 2012, after voters in 2011 overwhelmingly approved an amendment to the state Constitution to allow it.
Lawmakers in Mississippi proactively authorized sports betting when they passed a fantasy sports law, said Dunbar, whose firm Jones Walker represents clients in Biloxi. The industry hopes to draw sports fans to its gambling venues on the Gulf Coast with the hope of reviving the declining casino industry.
“They believe it will bring back Biloxi because it will be the only Gulf Coast market able to take advantage of sports gambling tourism,” he said. “It will be implemented before football season.”
The ruling could breathe new life into legislation pending before Congress that would regulate sports betting at the federal level, rather than let each state adopt its own rules, which the sports leagues prefer.
Les Bernal, national director of Stop Predatory Gambling, warned that the ruling could exacerbate what his association contends is a dangerous vice that harms people who become addicted to it and will lead to “normalizing” gambling for kids.
“The American people lost $117 billion on state-sanctioned gambling in 2016, causing life-changing financial losses for millions of citizens,” he said in a statement. “It directly contributes to the lack of mobility out of poverty that traps so many. This serious national problem will be made far worse if the government is allowed to operate and advertise sports betting.”