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stated that “Americans wager roughly $154 PASPA), then other states could follow New laws in anticipation of a Supreme Court
billion a year on sports illegally due to the Jersey’s example and repeal their sports decision striking down PASPA.
[PASPA].” By contrast, annual U.S. lottery betting laws to the extent applicable at In addition, state lotteries may need to
sales total less than half that amount – $73.8 certain venues – e.g., otherwise regulated examine their state common law to deter-
billion in 2015 (which for most jurisdictions gaming venues. Still, however, this would mine whether they are able to conduct sports
ended June 30, 2015). not be ideal for states, since it would be betting should the PASPA be struck down.
unclear how much general regulation (e.g., Courts in many states have declared that the
As noted, PASPA does not prohibit sports consumer protection and other regulation elements of a “lottery” are (1) “consideration,”
gambling. Rather, it prevents states from not specific to sports betting) could be made paid for an opportunity to win a (2) “prize”
sponsoring, operating, advertising, licensing applicable and not run afoul of PASPA. awarded by (3) “chance,” and existing prec-
or authorizing sports gambling (including Many of those watching this case believe edent suggests that, in single game sports
lotteries based on sports events). Although that Congress will intervene to repeal or betting, chance predominates over skill.
PASPA carves out exceptions for sports amend PASPA if the Supreme Court renders Nevertheless, courts and attorney general
betting schemes conducted during certain this narrow decision. opinions in some states have opined that
periods prior to the enactment of the law not all games with “consideration,” “prize”
(subject to certain conditions), only Nevada and “chance” are “lottery” games within the
enjoys a carve-out with respect to single “...even if the meaning of the constitutional or statutory
event betting (i.e., “spread” or “moneyline” provisions establishing the state lottery.
betting). Delaware, Oregon and Montana Supreme Court
enjoy carve outs with respect to certain Finally, the federal Wire Act is not at issue
sports-related lottery games. strikes down PASPA
in Christie v. NCAA, and therefore its prohi-
By structuring its 2014 law as a “repeal,” in its entirety, bitions on the use of the internet (and other
systems using wires) for the transmission
New Jersey was following guidance provided in interstate or foreign commerce of sports
by the Third Circuit in a 2013 case, in which the federal ban
the Court construed PASPA to prohibit wagers, or information assisting in sports
only the “affirmative ‘authorization by law’ applicable to wagers, will not be affected by the Supreme
of gambling schemes,” and not repeals of Court’s decision. Therefore, even if the
states’ existing sports betting prohibitions. interstate online Supreme Court strikes down PASPA in its
However, after New Jersey enacted the 2014 entirety, the federal ban applicable to inter-
law repealing its sports betting prohibitions sports betting will state online sports betting will remain intact.
at Atlantic City casinos and State horserac- Accordingly, while states could implement
ing tracks, the Court changed its mind and remain intact.” intrastate mobile wagering if PASPA is
interpreted PASPA as making it unlawful for struck down (it is currently conducted in
New Jersey to repeal its sports betting prohi- Nevada), states could not implement online
bitions when limited to specific geographic sports betting that processed sports bets
venues. The Court essentially held that it Alternatively, if the Court strikes down from out-of-state bettors or where the bets
was constitutional for federal law to dictate PASPA entirely, this will open the door for were processed out-of-state.
the extent to which states must maintain States – if they choose – to pass laws authoriz-
their prohibitions on sports betting. ing and regulating sports betting, although This case bears watching, and states and state
some state constitutions may first need to be lotteries may want to consider preparing for
Accordingly, if the U.S. Supreme Court amended on account of restrictions limit- a possible Supreme Court decision striking
upholds PASPA, but holds that New Jersey’s ing their legislatures’ power to enact laws down the federal sports betting ban. n
repeal of its sports gambling prohibitions authorizing gambling. Already at least 15
does not constitute an “authorization” of states, including New Jersey, Delaware and
sports gambling (and thus does not violate Connecticut, have enacted sports betting

New York v. United States, 505 U.S. 144, 166 (1992). “More States Expected to Prepare for Sports Betting,” by Chris Sieroty, Gam-
UNLV Center for Gaming Research “Sports Betting Win, 1984-2016,” at http:// bling Compliance, August 10, 2017, at https://gamblingcompliance.com/pre-
gaming.unlv.edu/reports/NV_sportsbetting.pdf (last accessed August 10, 2017). mium-content/insights_analysis/more-states-expected-prepare-sports-betting
See footnote 8. (subscription required, last accessed August 10, 2017).
NASPL Frequently Asked Questions at http://www.naspl.org/faq (last accessed See NFL v. Delaware, 435 F. Supp. 1372 (D.Del. 1977).
August 11, 2017). 18 U.S.C. §§ 1081, 1084.
28 U.S.C. § 3702
28 U.S.C. § 3704
NCAA v. Christie, 730 F.3d 208 (3rd Cir 2013), cert. denied 134 S.Ct. 2866
(2014).

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