August 21, 2018

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Supreme Court Strikes Down Federal Sports Gambling Law

On Monday, the Supreme Court opened the door for states across the country to authorize sports gambling within their borders—a decision that could have a dramatic effect in the world of sports and potentially weaken the federal government’s authority over states on a number of fronts.

In Murphy v. National Collegiate Athletic Association, No. 16-476, the Court struck down the Professional and Amateur Sports Protection Act (PASPA), a 26-year-old federal law that banned most states from legalizing sports betting. The Court held that PASPA unconstitutionally “commandeered” the states to enforce federal laws or policies in violation of the 10th Amendment.

Writing for the majority, Justice Samuel A. Alito Jr. acknowledged that the issue of whether to legalize sports gambling “is a controversial one” with good policy arguments on either side. However, he determined that Congress—while free to regulate sports gambling directly—cannot force states to do so, and that the PASPA provision in question was a “direct affront to state sovereignty.” On the other side, dissenting Justices Ruth Bader Ginsburg and Sonia Sotomayor argued that the decision was too broad. “The court wields an ax instead of using a scalpel to trim the statute,” Justice Ginsburg wrote.

The Court’s ruling will have a significant economic impact on a number of states that are already eager to collect tax revenues associated with legal sports gambling.

The decision could also shift the existing power dynamic between states and the federal government by buttressing 10th Amendment challenges to federal action. For example, enforcement efforts related to federal marijuana laws might be more easily challenged under the 10th Amendment in states where the drug is legal. Similarly, challengers to recent federal immigration enforcement efforts involving so-called “sanctuary cities” will certainly catch onto this decision. The impact of this case could be far-reaching, as any number of industries that implicate federal funds or laws could be impacted.

Jason Hoggan contributed to this piece.

Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

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Bill Mateja is a partner in the Government Contracts, Investigations & International Trade Practice Group in the firm's Dallas office. He specializes in White Collar Defense and Corporate Investigations.

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Unlike many attorneys, Bill does not expect repeat business. Clients he works with are usually facing the kinds of high-stakes, high-stress problems that are not likely to recur — a financial services company under SEC investigation, a hospital accused of Medicare fraud, or a C-suite executive charged with fraud or...

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