After Supreme Court ruling, a rush to cash in on sports betting
The rush for legal sports betting is on, and gamblers around the U.S. have New Jersey to thank for what experts think will be an onslaught of action.
Monday's Supreme Court's ruling strikes down a 1992 federal law barring gambling on football, basketball and other sports in most states. Within minutes of the decision becoming public, state governments and companies announced plans to jump into the betting business.
"This ruling gives us the ability to further diversify our product offerings and build on our unique capacity to drive fan engagement." said Jason Robins, CEO of DraftKings, in a statement. "DraftKings is well-positioned to capitalize on sports betting, given that it already runs the world's largest daily fantasy sports mobile platform that includes stringent consumer protections and transparency for nearly 10 million customers."
DraftKings offers daily and weekly fantasy sports contests in 10 professional sports areas, according to the company.
The high court's ruling abolishes the Professional and Amateur Sports Protection Act, or PASPA, a 1992 law that banned most states from legalizing sports gambling. New Jersey had an exception under the law that would have let it set up some sports betting in the state's casinos provided the state did so within a year, according to Scotusblog, which tracks and analyzes Supreme Court decisions.
Two decades later, New Jersey in 2012 finally passed a law legalizing sports betting and challenging PASPA. That eventually sent the case to the Supreme Court.
"A great day for the rights of states and their people to make their own decisions. New Jersey citizens wanted sports gambling and the federal Gov't had no right to tell them no," Former New Jersey Gov. Chris Christie tweeted. "The Supreme Court agrees with us today. I am proud to have fought for the rights of the people of NJ."
Americans spend at least $149 billion a year on illegal sports gambling, the American Gaming Association estimated in a legal brief supporting the law's dissolution.
The ruling also may change the way sports media outlets operate. Sports Illustrated, for example, is telling potential buyers that it could include betting advice and other features for readers, Recode reported.
And some professional sports team owners reacted with dollar signs in their eyes.
"I think everyone that owns a top four professional sports team saw the value of their team double," Mark Cuban, billionaire owner of the Dallas Mavericks told CNBC's Carl Quintanilla.
Even credit card companies and banks are likely to jump into the new market despite the risks, Matt Schulz, senior analyst for CreditCards.com, said in an email.
"Credit card companies have generally steered clear of allowing gambling-related transactions. However, the sheer amount of money that this Supreme Court ruling will unleash is likely to make the big credit card banks rethink their stance," Schulz said. "There's clearly an enormous amount of risk involved for the banks, but I'd bet that it's a risk they'd be willing to take. There's simply too much for them to gain."
PASPA barred state-authorized sports gambling except in Nevada, Montana, Oregon and Delaware, states that had approved some form of sports wagering before the law took effect. Nevada is the only state where a person can wager on the results of a single game, though the law doesn't cover wagering between friends. The law also doesn't cover animal races, such as horse racing, which many states already allow.
The American Gaming Association "stands ready to work with all stakeholders – states, tribes, sports leagues and law enforcement – to create a new regulatory environment that capitalizes on this opportunity to engage fans and boost local economies, the group said in a statement after the ruling.
Eighteen other states supported New Jersey in the case, according to the Washington Post. They are already moving quickly to authorize sports betting.
All four major U.S. professional sports leagues, the NCAA and the federal government had urged the court to uphold the federal law. In court, the NBA, NFL, NHL and Major League Baseball had argued that New Jersey's gambling expansion would hurt the integrity of their games.
Major League Baseball issued a statement saying the Supreme Court ruling will have "profound effects" on the league. It said "our most important priority is protecting the integrity of our games."
Outside court, leaders of all but the NFL have shown varying degrees of openness to legalized sports gambling.
The ruling may also make way for college sports betting.
"While we are still reviewing the decision to understand the overall implications to college sports, we will adjust sports wagering and championship policies to align with the direction from the court," the NCAA said in a statement.
-- The Associated Press contributed to this report
