Over the past few weeks, lawmakers of Minnesota have expressed their interest in legalizing and regulating sports betting despite the fact that an existing federal law prohibits it. They have drafted a bill as a proactive measure to prepare just in case the Supreme Court reduces or abolishes restrictions on sports betting. Later in the year, the nation’s Supreme Court is expected to pass a ruling regarding how constitutional the federal law banning sports betting really is.
Update: the supreme court has recently abolished the 90’s anti-sports betting law.
State Rep. Pat Garofalo of Farmington says this is the time for Minnesota to act and come up with legal frameworks in hope that the Supreme Court will find the federal law in question unconstitutional. He says that setting up a good legal frame work will make it possible to regulate and tax sports betting. Garofalo feels that failing to have proper legal infrastructure in advance will attract offshore sports books who might take advantage of sports betters in the event that the state is allowed to legalize sports betting. According to him, many gamblers in Minnesota are involved in sports betting anyway. It would, therefore, be wise to make it a safe, fair and regulated practice. It will allow sports betters to redeem their winnings and make sure that transaction charges are standardized unlike now where transaction charges can be extremely high.
Considering the legislative calendar, it will be very difficult to have the law to legalize sports betting passed before the year ends. The state of Minnesota is generally pro-gambling and consistent about it. Minnesota already has tribal casinos, horse racing tracks and a lottery. Garofalo admits that the tribes will obviously have a say on the legalization or not of sports betting. He adds that the state of Minnesota must work with them closely if it hopes to make any progress with the effort to legalize sports betting. Unfortunately, most tribes aren’t very supportive of it. They think that it involves too many risk factors and is not very profitable for them.
The Minnesota Family Council is also in opposition. It terms sports betting as a predatory business with more harm than good. Through a statement from Stephani Liesmaki, the council argues that the practice would be a source of state revenue but could cause a lot of harm to families, society and the individuals who engage in it. The council argues that it would be unfair for the state to prey on its citizens since sports betting targets young people, people and families with low income and gambling addicts. Profits from gambling companies depend on losses made by gamblers.
According to sports leagues, legalizing sports betting won’t be an all-rosy affair. It raises the possibility of games being fixed to the profit of a few people. The NFL, NHL, MLB and other leagues have been strongly opposed to the idea of legalizing sports betting. However, the American Gaming Association supports legalization of sports betting because of the high revenues it could yield.
The Professional and Amateur sports Protection Act of 1992 (PASPA) is the US law that outlaws sports betting in most states. The law prohibits law makers from advertising, operating, sponsoring, authorizing or licensing sports gambling. It was first introduced by Dennis DeConcini in 1991 before finally being passed on October 1992. As many states make an effort to regulate tax and legalize sports betting, there has been a call from all corners to have the federal government repeal PASPA. Those seeking to have it repealed argue that the law is unconstitutional because the Tenth Amendment of the constitution gives the states all rights that are not explicitly given to the federal government. Gambling regulation is one of them.
Raymond Lesniak, then New Jersey senator, filed a lawsuit against PASPA in 2009. He argued that it was unfair that PASPA allowed four states to legalize sports betting and disallowed the others. He termed it as unconstitutional discrimination. He argued that, it was against the anti-commandeering principles provided in the 10th Amendment for the congress to compel states to illegalize sports betting. According to him, states should get to set their own sports betting regulations and decide whether or not to legalize sports betting. When hearing oral submissions, the Supreme Court seemed to be worried by how the congress appeared to be controlling state legislatures directly. This may be a source of hope for New Jersey and other states hoping for PASPA to be termed as unconstitutional. In June, the Supreme Court will finally make a historic ruling to determine whether or not New Jersey will finally be able to legalize sports betting. The ruling is highly anticipated as it will affect many sectors and determine the future of sports betting in most states.
A win for New Jersey would pave the way for other states seeking to legalize sports betting. If New Jersey wins, 32 states will authorize various forms of sports betting by the end of 2023. This, however, does not mean that sports betters who currently use illegal services and local bookies will start using the legal providers. However, it will be a chance for states to start earning revenue and to regulate sports betting practices. It could also open the door for all sorts of unrelated legal arguments including legalization of marijuana, immigration regulation and regulation of guns. This is because the case is founded on the argument that the federal government is overstepping its bounds by regulating sports betting since powers not delegated to the federal government are reserved for various states. However, a win for New Jersey could come with limits. The Supreme Court may still leave the ban partially functional. It could allow New Jersey to legalize sports betting but not to tax it. Such a ruling would obviously keep the states from legalizing sports betting.
While the nation waits to see whether or not the Supreme Court makes a ruling in favor of New Jersey, Minnesota needs to carefully consider the benefits and problems that sports betting could come with. One of the problems it could cause is a negative cultural shift. It is true that gambling can be a positive form of entertainment. However, it could be really dangerous. Due to its addictive nature, it could cause people to bet away their life-long savings or to engage in crime just to get money for gambling or settle debts from gambling. Too much of it could completely shift the otherwise positive culture of Minnesota. It could result to a new breed of greedy gambling firms and irresponsible, uncontrollable gambling addicts. It could lead to lose of trust and credibility in sports leagues due to match-fixing, fraud and embezzlement of funds. However, the state could earn up to est. $531M if sports betting is legalized. It could also increase its ability to regulate it making it safe and more fair.