What Is PASPA
The Professional and Amateur Sports Protection Act of 1992, more commonly referred to as PASPA, is one of the most significant pieces of Congressional legislation relating to the ongoing national discussion on the legality of sports betting. PASPA, which effectively prohibits state-sanctioned sports betting nationwide, with a few exceptions, is also one of the most controversial and hotly debated federal laws. So contentious is the law that the question of its constitutionality will soon be put before the US Supreme Court.
PASPA, colloquially known as the Bradley Act after one of its most zealous proponents, Democratic New Jersey senator and former professional basketball player Bill Bradley, took effect Jan. 1, 1993. The bill was first introduced in Congress as the result of 1991 public hearings on sports gambling held be the Senate Judiciary Subcommittee on Patents, Copyrights and Trademarks. The hearings revealed significant concern over the supposed harmful effects gambling on sports has even outside the states that the practice, and the subcommittee went as far as to deem sports betting a “national problem” in its final report on the matter.
These findings informed the decision to craft a law that would contain sports betting to as few states as possible, those being limited Nevada, Delaware, Montana and Oregon – all of which already had their own laws on the books prior to PASPA’s adoption. PASPA’s final language was thoroughly gone over in committee after committee for the better part of two years before being approved by an 88-5 vote in the Senate on June 2, 1992, and in the House of Representatives on Oct. 6. President George H.W. Bush signed the bill into law two weeks later.
In order to understand the original intent and purview of PASPA, its ramifications for efforts to legalize online sports betting and the implications that a possible repeal could have for the gambling industry, it is important to first take a quick look at the history of the law.
The philosophy behind PASPA
PASPA is, in a sense, a continuation of a longstanding political and legal effort in the United State to contain and strictly curtail the expansion of sports betting. This goes back to the 1960 with the passage of the Wire Act, which was designed to stop the use of communications equipment to transmit sports betting information across state lines. This was conceived of by then Attorney General Robert F. Kennedy as a means of cutting off one of the major revenue streams used by organized crime syndicates. Kennedy believed fixing the outcomes of sporting events was a far more profitable illegal endeavor for criminals than drug trafficking, extortion or prostitution as increasingly sophisticated nationwide communications systems made sports gambling rackets much easier for the mob to facilitate and harder for law enforcement to trace.
While both the Wire Act and PASPA were designed to limit access to sports betting, PASPA was not directly aimed at stopping the involvement of organized crime. Instead, the intent of PASPA was to preserve the integrity of sports for their own sake. Indeed, some of the law’s chief supporters – both at the time it became law and today – are the heads of the major professional and collegiate sports leagues and associations.
Which states are exempt from PASPA?
Upon passage, PASPA effectively banned sports betting (excluding pari-mutuel betting on jai alai, horse- and dog-racing) in the United States outright with the exception of a four states that already had laws on the books to regulate wagering on sporting events. Nevada, with its legalized and licensed sports books going back to the 1940s, was obviously exempt, and Las Vegas in particular remains to this day the worldwide hub of legal sports betting. Delaware, Montana and Oregon also applied to be grandfathered in, owing to the various forms of sports lotteries each state regulated since at least the 1970s. Though these four states were allowed to continue with their own unique forms of sports betting, they were not able to expand into different gambling markets after PASPA became the law of the land.
PASPA made provision for states with a history of licensed gaming going back at least 10 years to be excluded from its prohibition on sports betting if they applied within a year of the bill becoming law. This would have only applied to New Jersey, which was, at the time, the only state other than Nevada with a legalized commercial casino industry. However, the New Jersey legislature failed to pass legislation regulating sports betting in time to meet the cut-off date, and thus the Garden State missed out on being grandfathered in.
Critics of PASPA argued at the time of its passage that requiring states to have a 10-year history of licensed gaming before being allowed to apply for exclusion from the law was a means of preventing several other states from legalizing gambling of all kinds, not just sports betting. The fact that Colorado, Illinois, Iowa, Louisiana, Missouri and South Dakota had all approved legalizing casinos inside their state lines within three years of Congress first taking up the issue lends credence to this argument.
PASPA in the age of Legal Online Sports Betting
Though it doesn’t seem like 1992 was that long ago, almost no one, least of all the lawmakers who created PASPA, could have envisioned the meteoric rise of the internet just a few years later. In the early ‘90s, most Americans didn’t have a computer at home, but now, some 25 years on, there is hardly an American without a smartphone in their hands all day long. The intervening years between PASPA’s passage and now have revealed the law’s creeping obsolescence – an obsolescence that made PASPA not only ineffectual but impracticable – which led to the Unlawful Internet Gambling Enforcement Act of 2006.
Daily Fantasy Sports (DFS), another innovation of the internet age, are not strictly speaking affected by PASPA’s prohibition on sports betting. The debate whether DFS contests are games of skill, as the industry contends, or should be considered on equal footing as sports gambling is far from settled, but several states have passed legislation in recent years that authorizes the legalization and regulation of online DFS. However, it should be noted that proponents of PASPA could theoretically use its prohibitions on sports betting to block attempts to regulate DFS in the future, as was recently seen in the case of Massachusetts.
Given the ascendancy of the internet, PASPA’s original intent of limiting the expansion of gambling on sports has been rendered a moot point. Though betting on sports is illegal in all but four states, an estimated millions of American citizens legally engage in online betting via offshore gambling websites like Bovada and BetOnline, which operate outside US jurisdiction. What’s more, the internet has made it increasingly quick and easy for bettors to access to information on odds, sports statistics and background analysis of value to assist them in placing their wagers.
The legal outlook for PASPA
As discussed briefly above, the ability to legally place sports bets on overseas-based gambling websites has largely obviated the existing laws prohibiting or limiting sports betting, including PASPA and the Wire Act. These laws have done little in practical terms besides drive sports gambling into the shadows, where there is no regulation and no protection for consumers, or offshore and online, which deprives the states and local municipalities of tax revenues from a multi-billion-dollar gaming industry.
For this reason, PASPA’s future may soon be decided in a US Supreme Court case brought forward by New Jersey, which, emboldened by President Donald Trump’s campaign support for legalized sports betting, claims the law unfairly imposes rules on some states and not on others. By appealing to the venerable States’ Rights doctrine and the Tenth Amendment, New Jersey’s day in court may result in PASPA being declared unconstitutional by the highest court in the land. The Supreme Court will likely make its decision sometime in 2018, at which point the states would have the legal standing to pass legislation regulating sports betting.
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