In May 2018, a historic decision by the United States Supreme Court (SCOTUS) struck down the Professional and Amateur Sports Protection Act (PASPA) of 1992, opening the door for states to legalize sports betting. This ruling dramatically reshaped the sports betting landscape in the U.S., igniting a rapid expansion of legal gambling opportunities across the country. The decision is considered a turning point in the evolution of the gambling industry and has had far-reaching implications for sports, law, and state economies. Here's a deeper dive into the history of PASPA, the SCOTUS ruling, and the lasting effects of this landmark decision.
PASPA, enacted in 1992, was a federal law that prohibited most states from legalizing sports betting. Its goal was to curb the spread of sports wagering in the U.S., which at the time was mostly restricted to Nevada. PASPA granted an exception to Nevada and a few other states, but most states were effectively barred from creating their own legal sports betting systems. Over the years, the law faced mounting criticism, especially as more states began to see the potential revenue benefits of legalizing sports betting.
The turning point came in 2018, when New Jersey challenged PASPA after voters in the state had overwhelmingly approved a referendum to legalize sports betting. The case, Murphy v. National Collegiate Athletic Association (NCAA), centered on whether PASPA violated the Constitution by infringing upon states' rights. The Court ruled in favor of New Jersey, striking down PASPA by a 6-3 vote. Justice Samuel Alito, writing for the majority, stated that PASPA violated the Constitution’s Tenth Amendment, which reserves powers not delegated to the federal government to the states.
The decision was monumental as it not only invalidated PASPA but also gave individual states the authority to regulate sports betting within their borders, setting a precedent for widespread legalization.
Following the SCOTUS ruling, the pace of sports betting legalization picked up across the U.S. States like New Jersey, Delaware, Mississippi, West Virginia, and Pennsylvania were among the first to legalize and launch legal sports betting operations. As of 2025, over 30 states have passed laws allowing for some form of legalized sports gambling, with more states likely to follow suit in the coming years.
Each state has developed its own approach to regulation, licensing, and taxation, reflecting regional preferences and political landscapes. For instance, some states have chosen to regulate sports betting through their existing state lotteries, while others have set up specialized gaming commissions.
Several important developments have emerged in the wake of the PASPA ruling:
Online Sports Betting: Many states have embraced online and mobile sports betting, allowing consumers to place bets on games from the comfort of their homes or on-the-go. States like New Jersey, Pennsylvania, and Michigan have seen significant online sports betting revenue, transforming the industry into a tech-driven marketplace.
Expansion of Sportsbook Operators: Major sports media companies, tech giants, and traditional casino operators have flocked to the sports betting market, creating partnerships with state-regulated sportsbooks. This includes collaborations with brands like DraftKings, FanDuel, Caesars, and MGM, which now dominate the online and retail sports betting industries.
Increased Revenue and Taxes: The legalization of sports betting has provided states with new sources of tax revenue. States have been able to allocate funds from sports betting taxes to various public services, such as education, infrastructure, and problem gambling programs. In 2024 alone, states collected over $2 billion in sports betting tax revenue.
Integration with Professional Sports Leagues: The Supreme Court’s ruling led to closer relationships between sports leagues and betting operators. Major leagues like the NFL, NBA, MLB, and NHL have entered into partnerships with sportsbooks to regulate and promote legal betting. Some leagues have even integrated betting odds into live broadcasts and official league websites, further legitimizing the industry.
While the SCOTUS ruling gave states the authority to legalize sports betting, each state has adopted its own regulatory framework, creating a patchwork of laws across the country. For example, states like New Jersey and Pennsylvania have quickly expanded their sports betting markets, offering both in-person and online options. On the other hand, states like Utah and Hawaii have maintained strict anti-gambling stances, choosing not to legalize sports betting.
Furthermore, issues such as age restrictions, betting limits, mobile betting regulations, and the inclusion of certain types of bets vary from state to state. This inconsistency has led to calls for federal guidelines to ensure a uniform approach to sports betting across the U.S.
The future of sports betting in the U.S. is incredibly promising, but challenges remain. One key issue is the regulation of new betting technologies, such as mobile betting apps and esports betting, which continue to grow in popularity. States will need to adapt their regulatory structures to accommodate new forms of betting while ensuring consumer protection and responsible gambling.
There are also ongoing debates over whether federal legislation is necessary to provide more uniformity in the industry. While some advocate for federal oversight to streamline regulations, others argue that states should retain the autonomy to regulate sports betting as they see fit.
The Supreme Court’s 2018 ruling on PASPA fundamentally reshaped the landscape of sports betting in the U.S. By giving states the power to legalize and regulate sports gambling, the decision paved the way for a booming industry that now generates billions in revenue. With the continued expansion of legal sports betting and the rise of new technologies and partnerships, the industry is poised for even greater growth in the years ahead. However, as the legal framework for sports betting continues to evolve, lawmakers, regulators, and stakeholders will need to balance innovation with consumer protection to ensure the future of sports betting remains secure and responsible.
