The PASPA Repeal: The US Supreme Court’s Sports Betting Decision

From 1992 up until 2018, the topic of sports betting was highly controversial in the US due to the PASPA, a law restricting states from legalizing sports betting in their localities. That was until May of 2018.

The US Supreme Court’s decision to strike down PASPA marked its biggest victory in sports betting, sparking legal betting and billions in profits. This moment, however, is not without its controversies. 

Let’s explore this complex topic on the Supreme Court’s decision to repeal the 1992 PASPA, discussing its history, as well as showcasing its effects on the US sports betting industry.

The US Supreme Court’s Decision to Legalize Sports Betting

On May 14, 2018, after months of appeals and lawsuits, New Jersey finally won its case against the federal government when the Professional and Amateur Sports Protection Act (PASPA) of 1992 was overturned after the Supreme Court deemed it unconstitutional.

This decision by the US Supreme Court is considered one of the biggest wins for sports betting and a monumental decision that shaped the history of the US gambling industry and its landscape moving forward.

However, this decision to repeal the controversial act highlights a long and arduous timeline of questions and talks about morality beyond just betting, which is discussed in the following sections below.

The Catalyst To The PASPA Repeal: The Breach To The 10th Amendment

The call for the repeal of the PASPA started with the state government of New Jersey, which led the legal process in 2009. The Supreme Court accepted the case, known as Murphy v. NCAA, in June 2017 and heard oral arguments in December 2017.

In reviewing the appeals court’s ruling, the US Supreme Court (SC) examined whether PASPA, by requiring states to keep bans on sports wagering under state law, “commandeers the regulatory power of states,” which breaches the Tenth Amendment of the US Constitution.

The US Congress’s authority does not include the power to directly order state governments regarding the enactment of laws, in this case, laws prohibiting sports betting. 

How New Jersey Led The Charge Against PASPA

In 2012, the Sports Wagering Act gained majority citizen support. It authorized New Jersey to legalize sports betting in Atlantic City and horse racing venues, leading to a 70% NJ population participating in gambling activities in 2017.

This decision led to a federal lawsuit against New Jersey State Gov. Chris Christie and other state officials. The argument was that the amendment violated PASPA, as the act made sports betting illegal nationwide.

New Jersey argued that enforcing PASPA violated the Tenth Amendment and Anti-Commandeering Doctrine. The 10th Amendment limits federal laws on states unless authorized by the Constitution.

The Start of the Murphy V. NCAA Case

The US DOJ joined the plaintiffs, and the case was brought to the District Court. Apart from the PASPA violation argument, they also claimed that sports gambling was hurting the integrity of the sports. The District Court ultimately ruled in favor of the plaintiffs.

After some back-and-forth with appeals and lawsuits, New Jersey eventually won the case on May 14th, 2018, when PASPA was overturned after the Supreme Court deemed it unconstitutional.

At the beginning of 2018, Phil Murphy assumed office as the new Governor of New Jersey, and the case was reclassified as Murphy v. NCAA.

The Murphy V. NCAA Case’s Significance to US Sports Gambling

The Murphy v. National Collegiate Athletic Association case, which involves the Tenth Amendment to the US Constitution, questions whether the US government has the authority to regulate state lawmaking.

Originating from NJ Gov. Philip Murphy’s (formerly Gov. Chris Christie’s) case against the NCAA, the defendant (Gov. Murphy) sought to overturn PASPA to allow state-sponsored sports betting.

The “pro-bettors” argued that the federal government should only manage federal laws, leaving enforcement to the states. On the other hand, “anti-bettors” defended PASPA by citing the “Supremacy Clause” within the US Constitution.

The Result of Murphy V. NCAA Led To The PASPA Repeal

The US Supreme Court ruled in May 2018 in a 7–2 decision that parts of PASPA were unconstitutional as they commandeered power from the states, and in a 6–3 decision, determined that the whole of PASPA was unconstitutional.

Following the Court’s decision, many states, such as New Jersey, Michigan, and Delaware, moved forward to legalize sports betting.

The Supreme Court’s ruling to repeal PASPA gave states the authority to regulate sports betting. As a result, around 38 states now permit sports betting. People in these states can place bets at casinos, sportsbooks such as DraftKings, and even use cryptocurrencies. The rise of digital wagering has also increased interest in crypto casinos that support blockchain payments and faster withdrawals for sports bettors.

Mississippi was the first US state to legalize sports betting after the PASPA repeal, with the first bets placed on August 1, 2018. West Virginia was the next to do so, followed by New Mexico and Pennsylvania.

Why the PASPA Was Deemed Unconstitutional

The Supreme Court invalidated PASPA, stating it violated the 10th Amendment’s prohibition on Congress commandeering state legislatures. Essentially, PASPA prevented states from passing laws they are fully entitled to create.

Associate Justice Samuel Alito furthered this notion by stating:

“In either event, state legislatures are put under the direct control of Congress. It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals. A more direct affront to state sovereignty is not easy to imagine.”
-Associate Justice Alito

The Mistake That Made PASPA Unlawful

The US Congress has the power to regulate private entities at the federal level. PASPA’s creators made an error by including directives for states on how to pass legislation. Had PASPA only criminalized individual sports betting, it likely would have withstood New Jersey’s challenge.

The Associate Justice of the US Supreme Court, Samuel Alito, explained that Congress could have regulated sports betting directly. Instead, Congress sought to commandeer the states by forbidding them from regulating sports betting.

The Effects of the 2018 PASPA Repeal To The US Sports Betting Scene

In May of 2018, the US Supreme Court made its decision regarding the 2017 Murphy v. NCAA case, deeming the 1992 PASPA as unconstitutional and immediately overturning the act, allowing US States to conduct legal sports betting within their localities.

With the Americans’ passion for sports and gambling, the betting season was open in the majority of the US, propelling the sports betting scene to unprecedented heights. By the end of 2018, the US sports betting market generated $334.6 million, giving back $37.8 million in taxes.

The US Sports Betting Market Post-PASPA Repeal

Although it has long been known that crime groups in different US states operated illegal sports betting rings despite PASPA enforcement, the US sports gambling market took off only after its repeal.

The Start of the US Sports Gambling Scene’s Legal Boom

The first month after PASPA’s reversal, the 3 US states with commercial betting, Delaware, New Jersey, and Nevada, generated $24.6 million from a +$309.9 million handle and $2.1 million in taxes.

A year post-repeal in June 2018, the US sports betting market generated a total of $629.17 million, almost doubling the GGR generated the previous year; from there, it was off to the races.

The Year-On-Year Growth of Legal Sports Betting in America

The US is among the biggest sporting countries, with over 70% of the most-watched TV broadcasts in the US in 2024 being sports broadcasts. Of course, many don’t watch games just for the spectacle, but also for the betting aspect. To stay competitive, many operators now attract players with boosted odds, welcome offers, and seasonal casino bonuses tied to major sporting events.

After sports bets became legal, the US sports betting market caught up to the Americans’ passion for sports, as by the end of 2019, the market produced $920.1 million in GGR, which almost doubled in 2020, to $1.55 billion.

Seven years in, the US sports betting market is worth 3782.47% more than where it started, with the market revenue of US sports bets amounting to $13 billion by the end of 2024, which experts attribute to the repeal of PASPA.

The Illegal Sports Betting Scene During PASPA Enforcement

While 73% of US states have already legalized retail and online sports betting by 2025, the US sports gambling landscape was completely different before PASPA was repealed.

Behind the scenes, crime syndicates and malicious bettors were conducting illegal gambling operations on a whole different level, creating a shadowy economy of mob-associated bookies and offshore websites.

In 2015, studies suggested that the illegal sports betting industry generated between $80 billion and $380 billion through shady offshore online betting houses, office pools, and malicious bookmakers.

The US Sports Gambling Market Before The PASPA Repeal

The impact of the recent recession has encouraged US states to be creative with tax revenue increases. As such, many states have turned to sports betting as a viable strategy to boost state income.

Unfortunately, PASPA prevented them from legalizing, regulating, and taxing sports bets, which could have generated millions in tax revenue, created jobs, and boosted economic activity for state governments.

Since sports betting was generally prohibited in the US except for four states, consistent figures regarding the revenue, handles, and taxes from the US sports betting market are scarce and unreliable.

The Professional and Amateur Sports Protection Act (PASPA) Explained in 2025

In 1992, the US government enforced the Professional and Amateur Sports Protection Act (PASPA), a federal law restricting US states from legalizing sports betting as well as penalizing and outlawing states and groups that conduct illegal sports gambling activities within the US.

The PASPA was a landmark law crafted through several sessions and public hearings by the Senate Judiciary Subcommittee on Patents, Copyrights, and Trademarks. Its primary purpose was to tackle widespread corruption in sports and the issues related to sports betting.

What States Were Exempt From PASPA?

PASPA, enacted by Congress in 1992 and effective from January 1, 1993, aimed to ban sports betting nationwide, making it illegal. Exempt states included Oregon, Delaware, Montana, and Nevada, with sports lotteries and legal sportsbooks, respectively.

PASPA banned US states from sports betting on all professional and amateur sports. The four states mentioned were excluded because they already regulated sports betting, with Nevada fully exempt from the act.

The following are the ways that the four US states bypassed PASPA provisions:

1. Montana: Sports pools and square betting were legal before PASPA and remained so afterward.
2. Delaware: Residents could place parlay bets on NFL games.
3. Oregon: “Sports Action” games were launched in 1989 by the Oregon Lottery, letting bettors make parlay bets on NFL and NBA games.
4. Nevada: Sportsbooks were always allowed to operate in the state.

The Closing Arguments

Sports betting has always been a highly controversial topic on a global scale, more so in the US’s gambling history. The love that the US has for sports and gambling is undisputable; however, issues of morality, corruption, and crime have always plagued the industry.

The US Supreme Court’s decision to rule in favor of the state of New Jersey is a massive win for sports betting fans, as it allowed states to legalize sports betting after almost three decades.

The US sports betting market is arguably among the largest gambling segments, not just in the US but globally, and will likely reach trillions with more states taking steps to legalize and capitalize on its betting scene.