On Monday, the US Supreme Court issued an opinion striking down a Federal law (the Professional and Amateur Sports Protection Act or “PASPA”) which prohibited state legislatures from taking any action to legalize betting on sports. PASPA also contained a restriction on advertising sports betting. The state of New Jersey challenged that law, arguing that it improperly limited the authority of state legislatures to act. The Supreme Court agreed, and invalidated the entire Act, including the restriction on advertising sports betting. Some trade press articles have suggested that this signals a boom for broadcasters and other ad-supported media companies as companies rush to start advertising legal sports betting now that the prohibition is gone. While in the long run that may be true, and there may be immediate benefits to stations in certain states, there are numerous caveats for broadcasters to consider before they recognize an advertising boom from sports betting companies.

The entire decision was not based on any analysis of whether or not betting on sports is a good thing, but instead it was a decision based exclusively on a question of state’s rights. The Supreme Court determined that Congress cannot tell state legislatures what they can and cannot do. While Congress may have the authority to ban or otherwise regulate sports betting, if they wanted to regulate it, they should have done so directly. Instead, as the law prohibited state legislatures from taking action to legalize sports betting and other actions predicated on that limitation on states rights, the Supreme Court determined that this was an exercise of authority that Congress does not have – Congress can’t tell state legislatures what to do. Based on the Court’s analysis that all parts of the act were premised on this ban on state legislative actions, the entire law was struck down. That means that there is no blanket federal ban on sports betting, and it leaves each state to regulate as it may wish. For companies ready to take bets on sporting events, and media companies who want to take advertising from sports betting companies, in most cases they need to wait for the states to make decisions on how to proceed.
Continue Reading Supreme Court Strikes Down Law against Sports Betting – But Broadcasters Need to Proceed with Caution