Legally Speaking: How could legalized sports betting affect Arizona?

Legalized sports betting could soon be as close as your neighborhood bar or restaurant.

In Murphy v. NCAA, the Supreme Court of the United States, in a 6-3 opinion, opened the door to allow each individual state to set up legalized sports betting within its boundaries.

As such, Arizona could join the ranks of Nevada, Oregon, Delaware, and Montana who already have legalized sports betting.

But don’t start Googling “where to place sports bets in Arizona” just yet. It is unlikely you will be able to go down to your local bar/restaurant or mall in the near future and place a bet on the Diamondbacks game.

For now, sports betting is still unlawful in Arizona.

In a recent decision, SCOTUS overturned the Professional and Amateur Sports Protection Act (PASPA), which had deemed it unlawful for states (other than those grand-fathered in) to have their own legalized sports betting.

New Jersey has been fighting for years to legalize sports betting but has faced legal challenges and opposition from the NCAA and the major sports leagues. Not to be deterred, it kept fighting and with this decision, won the battle.

Without going to far down the legal rabbit hole, here is some background: New Jersey voters approved an amendment to their constitution giving the legislature the authority to legalize sports gambling schemes. However, there was a law on the books that sports betting in New Jersey was unlawful. Pursuant to its voters’ wishes, the legislature then enacted a law repealing the old one.

Not wanting that to happen, the NCAA (and three major professional sports leagues) filed a lawsuit claiming New Jersey would violate the PASPA if allowed to repeal its law because it would, in essence, affirmatively allow sports betting.

The court disagreed and explained “[i]nstead of affirmatively authorizing sports gambling schemes, this law repeals state-law provisions that prohibited such schemes, insofar as they concerned wagering on sporting events by persons 21 years of age or older; at a horseracing track or a casino or gambling house in Atlantic City; and only as to wagers on sporting events not involving a New Jersey college team or a collegiate event taking place in the state.”

Basically, New Jersey said the federal government was overstepping its power with the PASPA and the court agreed.

The court explained “[t]he Constitution confers on Congress not plenary legislative power but only certain enumerated powers. Therefore, all other legislative power is reserved for the States, as the Tenth Amendment confirms…The Constitution…confers upon Congress the power to regulate individuals, not States…[w]e have always understood that even where Congress has the authority under the Constitution to pass laws requiring or prohibiting certain acts, it lacks the power directly to compel the States to require or prohibit those acts.”

In other words, Congress cannot simply order and dictate that the states prohibit sports betting, which is arguably what the PASPA had been doing for 25 years. The court held that “Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.”

How does this affect Arizona? Time will tell.

Although, it appears as though our elected officials are not opposed to following in New Jersey’s footsteps. SCOTUS did not legalize sports betting across the country, it simply decided that it was for each state to decide what happens inside its own borders.

Gov. Doug Ducey tweeted “This ruling gives Arizona options that could benefit our citizens and our general fund.”

In addition, Arizona Attorney General Mark Brnovich told KTAR News 92.3 FM’s Bruce and Pamela that he agreed with the decision and that any proposals would need to come from the state legislature. Remember also that if Arizona were to adopt sports betting, the agreements with the various tribes in Arizona would need to be re-negotiated.

Between the legislature discussing and voting on the issue, the negotiations with tribal communities, the creation of a regulatory scheme and zoning issues, it is safe to say that all of this would take a substantial amount of time.

A couple interesting points to keep in mind: Should Arizona decide (remember, it doesn’t have to allow it) to allow legalized sports betting, it could cover all the sports that you see in Vegas sports books, or it could include just one or a couple.

From everything I have read and researched, the major sports leagues were opposed to striking down the PASPA but some have relaxed their stance.

Some, including the MLB, the NBA and the PGA Tour have raised the issue of an “integrity fee.” Presumably, this integrity fee would entail giving them a share of the revenue the states receive from allowing the sports betting. Although this fee is not, and likely will never be, required under the law, those sports leagues have major leverage over Arizona (think Super Bowl, Fiesta Bowl).

Lastly, many states have already been hard at work in getting ready for the decision. There are reports and estimates that between 15-20 states have bills already on the legislative floors and that around 30 states could have sports betting in the next five years.

Legally speaking, the Supreme Court has opened the door for Arizona to create a much-needed revenue stream. It could end up being part of the answer to many of our financial issues.

However, Congress still has the power to step in and create a comprehensive set of laws in order to bring consistency in this area.

Although New Jersey has won the battle and caused the flood gates to open across the country, sports betting is likely to be the subject of more lawsuits as the country, including Arizona, works through this major change in the law.

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