HomePublicationsNewsletter ArchiveVolume 24Issue 17UNITED STATES SUPREME COURT DECLARES FEDERAL LAW ON SPORTS WAGERING UNCONSTITUTIONAL

ATTENTION NOW TURNS TO THE STATES AND TRIBES

On Monday, the United States Supreme Court issued an Opinion holding that the Professional and Amateur Sports Protection Act (“PASPA”) is unconstitutional.   A complete copy of the decision is available at the following link:

https://www.supremecourt.gov/opinions/17pdf/16-476_dbfi.pdf.

The Court agreed with arguments made by the State of New Jersey that PASPA violated the anticommandeering principle of the United States Constitution’s 10thAmendment (which reserves all legislative power not given to Congress to the states).   PASPA prohibited states from authorizing sports betting, and the court held that this provision of the law “regulates state governments’ regulation of their citizens.  The Constitution gives Congress no such power.”

With this landmark decision, the focus has now shifted to what comes next.  Throughout the United States, numerous state legislatures and sovereign tribal governments have anticipated a possible invalidation of PASPA and have been working on legislation to address sports wagering.   In Michigan, various bills dealing with sports wagering issues have been introduced and are pending before the Michigan legislature.  The issue is also often interrelated with the issue of intrastate Internet wagering, which continues to also be a hot legislative topic.   Michigan bills addressing these issues include the following:

  • HB 4060, introduced on 1/18/17 by Rep. Robert Kosowski (D-16thDistrict), seeking to allow licensed casinos to accept wagers on sporting events after a statewide referendum.  HB 4060 was referred to the House Committee on Regulatory Reform on 1/18/17 which has not taken any action on the bill.
  • HB 4261, introduced on 2/21/17 by Rep. Robert Kosowski (D-16thDistrict), seeking to allow parlay betting at licensed casinos, through betting agents, and through the Michigan Lottery.  HB 4261 was referred to the House Committee on Regulatory Reform on 2/21/17 which has not taken any action on the bill.
  • HB 4529, introduced on 4/26/17 by Rep. Robert Kosowski (D-16thDistrict), seeking to allow parlay betting at Lottery terminals after a statewide referendum.  HB 4529 was referred to the House Committee on Regulatory Reform on 4/26/17 which has not taken any action on the bill.
  • HB 4926 & 4927, introduced by Rep. Brandt Iden on 9/12/17 (R-61stDistrict), seeking to allow internet gambling, including permitting sports wagering if not a violation of federal law.  HB 4926 & 4927 have been discussed in the House Committee on Regulatory Reform and are in the process of possibly being amended further after discussions with interested parties. 
  • SB 203, introduced by Sen. Mike Kowall (R-15thDistrict), seeking to allow internet gambling, including permitting sports wagering if not a violation of federal or state law.  SB 203 was passed out of the Senate Committee on Regulatory Reform.  The Committee voted 7-1 to refer the bills to the Committee of the Whole on 3/9/17 and no additional action has been taken to date.

Notably, this week a spokesperson for the Michigan Gaming Control Board suggested that additional legislation might not be necessary in order for sports wagering to be offered at the Detroit casinos.   "The Michigan Gaming Control and Revenue Act authorizes gambling games under a broad definition and does not specifically prohibit sports betting," said MGCB spokeswoman, Mary Kay Bean, to Cleveland.com.  

In addition to the Detroit casinos, Michigan’s Native American tribes are also looking carefully at offering sports wagering.  The legislative efforts underway are seeking to address tribal and commercial gaming in a uniform way. Indian gaming is governed by the specific terms of each tribe’s gaming compact with the state of Michigan, all of which vary in terms.  Under the Indian Gaming and Regulatory Act of 1988 (“IGRA”) states cannot impose a state tax  against Indian tribes.  Existing precedent allows for a revenue sharing arrangement between the tribes and the states to be entered into where the state provides a certain benefit (typically, in Michigan compacts some form of geographic exclusivity) in return for some form of revenue sharing.   Thus, the current legislative efforts are focused on finding a way for the various interests to be balanced and for commercial and tribal operations to be given a level playing field.  

According to an article in Legal Sports Report on Tuesday of this week, Senator Orin Hatch suggested that he will be looking to introduce federal legislation to regulate sports wagering at the federal level.  

American Gaming Association President Geoff Freeman suggested in a news release this week that the proper focus should now occur at a state and tribal level.  He stated:

The Supreme Court’s decision is a victory for millions of Americans who want to bet on sports in a safe and regulated manner. It’s now possible for states and sovereign tribal nations to create a sports betting market that will protect consumers, preserve the integrity of the games, empower law enforcement to fight illegal gambling, and generate new revenue for states, tribes, sporting bodies, broadcasters and many others.

Now all attention turns to the states. Already 18 states have introduced legislation to legalize sports betting, with more states expected to follow. The AGA is working closely with the necessary stakeholders, including many of you, to ensure that new state policies include reasonable tax rates and sensible regulations.

 

Upcoming Events

Michigan Gaming Control Board Public Meeting

Tuesday, September 11, 2018 - 9:30AM

Casino Job Board

Official Publications

 

RMC Legal

Visit our other website below: