The Supreme Court rules in favour of punters across the land
AMERICANS love gambling. Nearly two-thirds of adults place some sort of stake each year, and about one-tenth visit Las Vegas to try their luck. Some even bet on whether the Supreme Court would strike down the Professional and Amateur Sports Protection Act (PASPA) of 1992, which prohibits most sports gambling in states other than Nevada. On May 14th the justices ruled in favour of New Jersey, which violated the act in 2014 by legalising such wagers. Chris Christie, a former governor, had argued that PASPA represented an unconstitutional federal infringement.
The new precedent could have broad implications, perhaps making it harder for the federal government to impose other laws, such as those covering drugs and immigration. For now, it ends America’s stint as the only rich country that prevents most sports fans from betting. Each state will now decide whether to permit it. New Jersey will do so quickly. Pious states such as Utah may never do so. Chris Grove of Eilers and Krejcik Gaming, a research firm, forecasts that 32 states will have some form of regulated betting by 2023, handling about $90bn of wagers a year—compared with $4.9bn in Nevada today.
Congress introduced the law at the behest of major sports leagues, who worried that gambling encouraged match-fixing. That spectre has loomed over American competitions since 1919, when the Chicago White Sox deliberately lost the baseball World Series. But times have changed. Athletes’ rocketing salaries have made bribes less appealing. Fans can place bets with offshore bookmakers and gamble on their favourite players in fantasy sports leagues, which received a legal exemption in 2006 and handle about $3bn in entry fees a year. A recent poll found that only one in three Americans opposes the legalisation of sports betting.
America’s major leagues at first sought to halt Mr Christie’s plan in court. But they have since realised that gambling’s rewards outweigh its risks. The National Basketball Association (NBA) reversed its position in 2014. Along with Major League Baseball, it is greedily lobbying for a 1% “integrity charge” on legal wagers. The National Football League (NFL) and National Hockey League (NHL) will probably follow suit.
The leagues are not the only winners, notes Darren Heitner, a sports lawyer. Fantasy firms have been preparing fully fledged betting products. Shares in foreign bookmakers like Paddy Power Betfair and William Hill have risen. Punters may show more interest in less glamorous matches, which would boost ratings for cable TV channels. Betting firms are likely to advertise on television and try to sponsor teams. States could gain extra revenue by taxing bookmakers—but should be wary. Set rates too high, and punters are likely to be pushed onto the black market. Americans currently wager about $50bn-60bn a year using illegal services, says Mr Grove, though the vast majority now use offshore websites rather than shady neighbourhood bookies.
Nevada is unlikely to suffer much. Just 2.5% of its earnings come from sports betting. And America’s major sporting leagues are increasingly willing to move franchises to Las Vegas, which is part of a metropolis of more than 2m inhabitants. They had shunned it for years, citing the temptations of sports gambling. The NHL’s Golden Knights, the city’s first big team, are enjoying a remarkable debut season, having reached the playoff semi-finals. The Raiders, an NFL franchise, will arrive in 2020. The NBA could be next. Sin City is losing a monopoly on one of America’s vices, but gaining a share in its favourite pastimes.