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By a 6 to 3 vote, the U.S. Supreme Court threw open the door today to sports betting. It ruled unconstitutional a 25-year-old law that had barred most states from legalizing sports betting. The only exceptions were those states where it already existed - principally, Nevada. NPR legal affairs correspondent Nina Totenberg reports.
NINA TOTENBERG, BYLINE: The challenge to the federal law was brought by the state of New Jersey, which passed a law to legalize sports betting mainly to gain additional tax revenue and to help struggling casinos in the state. The state lost repeatedly in the lower courts, but today the Supreme Court struck down the federal law as unconstitutional. Writing for the court, Justice Samuel Alito said the federal law had unconstitutionally commandeered the state's lawmaking authority by dictating what a state legislature may do and not do.
It is, he said, as if federal offices were installed in the state legislative chambers armed with authority to stop legislators from voting on any offending proposals. Congress, he said, can regulate sports gambling directly, can even ban it, but it cannot pass the buck to the states telling them how to regulate their own citizens. While the court's decision was couched in constitutional terms, the results were a lot more mercenary.
ANDREW BRANDT: Here is the bottom line - gambling is a huge, huge fan engagement tool.
TOTENBERG: Andrew Brandt is director of sports law at Villanova University.
BRANDT: The average NFL fan who's a non-better watches about 15, 16 games a year. The average NFL fan who's a better watches 45 to 50 games a year. That kind of information is gold. It's gold. It is part and parcel of what is driving interest in these sports, and they know it.
TOTENBERG: It's no wonder that news of today's decision sparked a surge in gaming stocks on Wall Street. Jason Robbins, CEO of fantasy sports provider DraftKings, said that if as expected the majority of states legalize sports betting, he estimates an increase of $15 billion to $20 billion among fantasy sports providers because they now can openly provide betting opportunities instead of masking their product as a game of skill.
JASON ROBBINS: It just opens up a lot more possibilities for different types of cool experiences and products that we can offer to our customers.
TOTENBERG: And the sports leagues, which defended the ban on sports betting in the Supreme Court, are already asking the states for a percentage of the expected revenue stream once sports betting is legalized.
JOHN WOLOHAN: It's really just a money grab.
TOTENBERG: John Wolohan is a professor of sports law at Syracuse University.
WOLOHAN: It's amazing where we have billionaire owners basically coming to the states and saying, we want a piece of this. Even though we've said no all along, we want you to give us hundreds of millions of dollars.
TOTENBERG: With every player in the sports world seeing dollar signs, there's one problem player - the amateur athlete.
WOLOHAN: The NCAA kind of throws a wrench in the works here.
TOTENBERG: That's because everybody envisions sports betting as including college teams with a percentage going to the college but not the team players. Michelle Minton is a fellow at the Competitive Enterprise Institute, a free market think tank.
MICHELLE MINTON: The amateur athletes are the most vulnerable to corruption because they're not paid.
TOTENBERG: The talking point for almost everyone commenting on today's decision is that legalizing sports betting allows it to bloom legally instead of leaving it in the shadows of illegality. Sportsradar calls itself the central data provider in the legal betting ecosystem overseas and in Nevada, working with the leagues and with law enforcement to spot cheating. Laila Mintas, deputy president of the company, calls today's decision a milestone.
LAILA MINTAS: Regulating the markets has been overdue for such a long time. But now the challenge is to regulate the market in a way that makes sense.
TOTENBERG: And what we need, she says, is to create a system that allows legitimate sports bookmakers to compete with offshore bookmakers in order to channel that business into the U.S. where it can provide more business revenue and, more important to the states, tax revenue. Nina Totenberg, NPR News, Washington.
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