On May 14, the Supreme Court struck down the Professional and Amateur Sports Protection Act (“PAPSA”), a federal law that prohibited most states from allowing sports-related gambling.  The ruling now clears the way for any state to legalize gambling on sports.

PAPSA made it “unlawful” for a state to “authorize” any gambling operation based on competitive sports events. (A few states, including Nevada, were grandfathered in at the time of the law’s passage in the 1990s.  New Jersey, the petitioner, had been given a one-year window to avoid PAPSA, but it failed to act in time.)  In Murphy v. National Collegiate Athletic Association, the Supreme Court ruled that the federal law violated the anti-commandeering principle—a Constitutional rule that prohibits the federal government from “issu[ing] orders directly to the States”—because PAPSA “unequivocally dictates what a state legislature may and may not do.”

The case pitted the state of New Jersey against the NCAA and the major professional sports leagues.  New Jersey, given the large draw of Atlantic City, wanted to allow for sports-related gambling.  So, in 2011, New Jersey voters approved a constitutional amendment to allow it.  A state law followed in 2012 and was quickly challenged by the sports associations.  Initially, the state law was struck down by the Third Circuit as a violation of PAPSA, and the Supreme Court declined to review the case.  New Jersey then modified the law in 2014 to try to avoid the federal restrictions.  The modified approach was framed as a partial repeal of prior state prohibitions rather than an express authorization of gambling.  Again, the sports associations sued.  The Third Circuit, sitting en banc, held that PAPSA still prohibited the new state law and that PAPSA did not violate anti-commandeering principles because it did not command states to take affirmative action.  This time, the Supreme Court granted certiorari on the constitutional issue and reversed the decision.

In dissent, Justice Ginsburg argued that (1) Congress could undoubtedly regulate gambling under the Commerce Clause, and (2) the problematic provision should be severed from the remainder of the statute.  “Deleting the alleged ‘commandeering’ directions would free the statute to accomplish just what Congress legitimately sought to achieve: stopping sports gambling regimes while making it clear that the stoppage is attributable to federal, not state, action.”  Accordingly, she wrote, the Court should “salvage” the statute rather than “destroy” it.

The majority disagreed with the latter contention.  It held instead that the separate provisions were not severable because they worked together to form a “coherent federal policy.”  Notably, the majority agreed that Congress could directly regulate gambling.  Thus, the decision leaves open the possibility that Congress could prohibit sports gambling by passing different legislation.

Unless and until Congress passes such a law, however, “each State is free to act on its own.”