Millions of people flock to Las Vegas each year to gamble on sports. Las Vegas sees on average $5 billion annually in sports bets. But what if the average Minnesotan didn't have to travel to Las Vegas to gamble on the next football game? What if it were possible to place a bet within driving distance?
This is the scenario that could face the Legislature as early as next year. Indeed, at least one Minnesota lawmaker, Pat Garofalo, said he intends to introduce a bill in the next legislative session.
"It is time for Minnesota's sports gambling laws to move out of the cave man era and into the 21st century," he said.
Worldwide, it is estimated more than $500 billion is exchanged on an annual basis on sports wagers. A substantial amount of this money is spent in unregulated black market exchanges. The primary reason that the black market exists is because sports gambling is illegal in most jurisdictions.
In 1992, Congress mandated that state and local governments ban and control sports gambling through the Professional and Amateur Sports Protection Act (PASPA). PASPA prohibits legislatures from sponsoring, operating, advertising, promoting, licensing, or authorizing sports gambling, and it prohibits individual sports wagers pursuant to state law. Outside of a few grandfathered jurisdictions, namely Nevada, legal sports betting doesn't exist in the U.S. As a result, many sports bettors are driven to the black market to participate in an unregulated marketplace ripe for corruption and crime.
In 2010, New Jersey was the first to recognize this opportunity and attempted to create a regulatory environment that would allow for sports betting only at horse tracks and casinos. In addition, N.J. regulations would prohibit minors from gambling and would halt anyone from placing a wager on any collegiate program in the state. New Jersey also banned anyone from placing a bet on a sporting event occurring inside the state. New Jersey, however, has faced steep legal opposition from professional sports leagues, including the NFL, NHL, NCAA, MLB and the NCAA.
The sports betting marketplace may soon change. On Dec. 4, the U.S. Supreme Court heard oral arguments in Christie v. National Collegiate Athletic Ass'n. In this case, New Jersey argued that PASPA violates the anti-commandeering principles of the 10th Amendment. Under the anti-commandeering principle, Congress lacks the power to compel states to require or prohibit certain acts which Congress itself may require or prohibit. In response, the sports leagues argue that PASPA is a valid exercise of Congress' broad powers under the commerce clause.
The implications cannot be overstated. During the hearing, the Supreme Court seemed concerned that Congress was directly controlling state and local legislatures. Instead, the court asked, why couldn't Congress just outright ban sports betting? The Supreme Court asked the sports leagues whether there was any other federal statute that was similar. The leagues said they were not aware of such a statute.
