It is interesting times ahead as the US stays waiting with baited breath pending the outcome of the New Jersey sports betting case. The case refers to the Supreme Court’s awaited ruling surrounding the legality of sports betting in the state, or the NCAA v. Christie case.
The history of the case dates back to the 2011 New Jersey referendum, when New Jersey constituents voted in favor of legalizing sports wagering under New Jersey governor, Chris Christie. The result of this referendum was enacted as the Sports Wagering Act of 2012 – allowing wagering in NJ casinos and racetracks.
The state was then sued by the MLB, NBA, NHL, NFL, and NCAA, under the Professional and Amateur Sports Protection Act of 1992 (a federal, rather than state act), which nullified the state act. PASPA prohibits States from offering wagering services on professional and college sporting competitions. Another 2014 law enacted in New Jersey saw them being sued again by the sporting factions – which then resulted in an injunction against Chris Christie as well as other state agencies.
However, in 2017, the Supreme Court decided to hear the case of the NCAA vs. Chris Christie, a surprising move considering advise was given not to give the case airtime. Oral arguments were given in December, both for and against the case.
At present, it is speculated that the case for New Jersey has the upper hand. It is complex issue that is proving to be something of a greater nature than whether or not the legality of sports betting should be a federal-only issue (except in currently exempt States and jurisdictions where it is legal).
Sports journalists well versed in legal issues, such as Daniel Wallach, note that the case actually deals with the constitutionality of PASPA, and whether it actually violates the 10th Amendment. The 10th amendment States “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”.
Since sports betting is nowhere outlined in the constitution, nor anything to the effect, the 10th amendment clearly points to the powers surrounding legalization of sports betting be the legislature of the States, not the Federal government. This was the line of questioning most delved into during the case hearing.
The outcome of the case is due by June, however it is looking like the Supreme Court may rule in NJ’s favor and that PASPA will be repealed. A partial repeal here is not possible. This would mean that all States would be able to pass their own laws surrounding sports betting.
So, what does this mean for online sports betting? Well, in Nevada, where sports betting is already legal, online sports betting, through licensed Nevada bookmakers, is already legal. In 2013 the state passed State Assembly Bill 114 that legalized interactive gaming, including sports betting. You can already play in licensed online casinos, such as the ones at NoDepositHero.
If the States are given power to legislate sports betting in their own jurisdictions, it is theorized that this could well be the start of something exciting for online sports betting too. It could well cause a chain reaction where States are able to implement their own laws surrounding betting online, such as how Nevada has already legislated.
This flow on effect could obviously have far reaching consequences for both governments, who would be able to benefit from an influx of money taxed from the profits, as well as investors, who would finally be able to get a piece of the estimated $150billion per year illegally wagered on sports betting in the US.
If this was legalized in US States, we could well see something akin to the growth in the UK, where sports betting grew 79% between 2009 and 2013, after gambling (including online gambling) laws were relaxed in 2007.
Sports betting in the UK is huge business. Paddy Power Betfair PLC is currently in the FTSE 100, the list of the top 100 companies with the biggest market cap currently operating on the London Stock Exchange. PPB was listed on the London Stock Exchange on the 2nd of February, 2016, after the merger of Paddy Power plc and Betfair Group plc, two of the largest and fastest growing online sports betting companies in the world. Shares debuted at 10,490.00 and are currently sitting at 7,115.00. Other companies listed on the LSE include William Hill, constituent of the FTSE 350, and GVC Holdings, constituent of the FTSE 200, which in March 2018 acquired famous bookmaker Ladbrokes, have tripled their share price in 5 years, and are still on the rise.
This similar projection, mergers, and acquisitions shows a market that is just starting to hit its strides. We are likely to see something similar happen in the US if and when online sports betting becomes legalized. Investors are likely to look to and study the history of UK markets to see what the similar effects will be on a US market and trades.
In an in depth report from ESPN last year, we see the future of online sports betting in the US taking shape. While traditional sports betting operators like MGM and William Hill are obviously interested, there is more interest from some parties that you wouldn’t expect. Reuters, Microsoft, and Sony have been seeking patents in the online sports betting realm for systems of operation. This is surely a signal that tech-houses may well be the big players in the online sports betting industry should it open up soon.
Is it time to bet on online sports betting becoming the next growth industry in the US? All signs point to yes. When the time comes, whether it’s this year, or 5 years down the track, many have foreseen the legalization of online sports betting as an inevitability. It may be time to start thinking about which companies are best poised to take advantage of changes to the law that would allow them to operate as sports betting operators.