Supreme Court reporter Richard Wolf breaks down the SCOTUS ruling on sports betting in the United States, and what it could mean for the future of gambling in professional and college sports. USA TODAY Sports
After a Supreme Court decision struck down federal restrictions on sports betting Monday, California’s gaming community gave a mixed response, with some feeling lucky and others urging caution.
The Supreme Court on May 14 ruled in favor of New Jersey in the state’s challenge to the Professional and Amateur Sports Protection Act (PASPA), a 25-year-old law that banned most states from regulating and taxing sports betting.
The ruling paves the way for the legalization of a multibillion-dollar industry, but California will still need to change the state constitution before residents will be allowed to bet on sports legally.
Research firm Eilers & Krejcik Gaming estimated last year that the legal sports betting market booked $270 million in revenue in 2017, but was dwarfed by a $2.5 to $3 billion black market.
The firm projected that striking down PASPA could generate as much as $7.1 billion in annual revenue if the entire nation enacted regulated sports betting at places like casinos and racetracks. Revenue could be more than double that estimate if states also allowed online sports betting.
David Klein, a gaming attorney and managing partner of New York-based Klein Moynihan Turco LLP, anticipates state laws legalizing sports betting will likely benefit existing casinos, which might be the only entities eligible to hold a sports betting license right away.
“I can’t imagine why a casino would not be all for this,” he said, “because it’s an additional pool of money that they would not otherwise have an opportunity to receive.”
Some local casinos agreed.
“I think today’s SCOTUS decision represents a significant opportunity for California tribal gaming, and will benefit all California tribes,” said Michael Frawley, Chief Operating Officer and General Manager of Spotlight 29 and Tortoise Rock Casinos, in a statement.
Mark Macarro, Tribal Chairman of the Pechanga Band of Luiseño Indians, was also optimistic. The tribe operates the Pechanga Resort & Casino in Temecula.
“We view sports betting as a potential amenity that would complement our numerous offerings,” he said in a statement. “Now that the Court has ruled, we look forward to engaging in a conversation with fellow tribal leaders, policymakers, and industry stakeholders to see if there is a path forward for sports betting in California.”
If states like California take another look at sports betting, it could have ripple effects for other corners of the gaming industry, said Steve Miller, California state director of the Poker Players Alliance, a nonprofit advocacy group. His sense is that the ruling is good news for online poker, too, setting a precedent states can use to regulate internet gambling.
“It can only be seen as a positive action,” Miller said.
Other gaming industry voices were more cautious.
In a statement, California Nations Indian Gaming Association Chairman Steve Stallings said California should “move slowly” on sports betting policy and urged the state to give tribes “a place at the table” in those discussions. The association’s 34 member tribes include the Soboba Band of Luiseño Indians in San Jacinto and the Morongo Band of Missions Indians in Banning.
“We also want to make very clear that California voters have, on numerous occasions, confirmed the exclusive right of California tribal governments to operate casino-style games,” he said. “Legalization of sports betting should not become a backdoor way to infringe upon that exclusivity.”