On the first Monday of October 2017, the Supreme Court began a new term. This is the fifth in a series designed to focus on decisions of the Court in this new term that might have an impact on the Eastern Shore.

A case of considerable importance to the sports gambling industry that also raised some significant federal-state law issues was just resolved by the Supreme Court. In 1992, Congress passed the Professional and Amateur Sports Protection Act of 1992 (PASPA). PASPA prohibited states that had existing laws against “betting, gambling, or wagering” on sports from changing those laws. PASPA exempted four states – Delaware, Montana, Nevada, and Oregon – which at the time permitted sports gambling.

When PASPA was enacted, New Jersey prohibited sports gambling but as the years went by New Jersey decided to repeal those laws, substituting instead a system for licensing and supervising sports gambling. In doing so, the state was influenced by concern over the economic health of its casinos and racetracks as well as about widespread underground sports gambling. The repeal was immediately challenged by the NCAA and the four major professional sports leagues – the National Basketball Association, the National Football League, the National Hockey League, and Major League Baseball – all claiming that the repeal violated PASPA. According to the complaint, Congress forbade New Jersey from enacting, by repeal, the specific policy New Jersey now prefers—namely, state-sponsored sports gambling at state-licensed casinos and racetracks.

New Jersey defended against this claim by asserting that a federal law such as PASPA that bars virtually all states from legalizing sports gambling violates the 10th Amendment to the Constitution. The 10th Amendment, which has received relatively little public or judicial attention over time, provides that powers not delegated by the Constitution to the federal government nor prohibited by the Constitution to the states are “reserved to the States.” New Jersey argues that if Congress wanted to ban sports gambling, it must do so itself in the form of a properly enacted federal regulatory system. Absent that, Congress may not prevent the States from enacting, modifying, or repealing their own laws on the subject. Eighteen states, together with the Governors of three other states, including Governor Hogan of Maryland, filed a brief in support of New Jersey.

The case is titled Murphy v National Collegiate Athletic Association. Oral argument before the Court was held early in December, 2017, and on Monday, May 14, 2018, by a vote of 6-3, the Court held that the PASPA provision barring states from authorizing sports betting is unconstitutional. Accepting New Jersey’s arguments, the Court’s majority concluded that “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”

The Court’s decision is sure to set off a race by many states to amend their laws prohibiting sports gambling. But the result has other implications as well. Had the Court decided that Congress had the power to prevent states from repealing their own laws, Congress might have attempted to prevent state experimentation in a host of other important policy areas. For example, without enacting any federal regulatory scheme to take the place of state law, Congress might have simply prevented states from repealing or amending existing prohibitions on the sale or use of pharmaceuticals, medical devices, marijuana, low level radioactive waste, and other products or services often regulated by state law.