PASPA: Professional and Amateur Sports Protection Act

PASPA created havoc within the casino industry when it was passed by the United States Congress and signed into law by President George H.W. Bush in 1992. The law, which was named the Professional and Amateur Sports Protection Act, was built on existing non-gambling laws by banning states from sports gambling. A Supreme Court ruling in 2018 essentially ended PASPA by deeming it unconstitutional.

Over the years, lawmakers have worked hard to limit the scope of sports gambling within the United States. The Wire Act, which was first formulated in 1961, essentially made it illegal to wager on sports on a federal level. This act prohibited any kind of interstate commerce or communication between entities who were attempting to bet on sports.

It did not prohibit the practice within states where casinos had been established. In Nevada, where casinos had become a way of life, sports gambling flourished. Three other states enacted laws that included sports betting that was limited to parlay bets or lottery-type systems, although some of these states didn’t follow through on the practice.

But the drumbeat of anti-gambling continued throughout the ‘70s and ‘80s. Professional sports leagues worried about the possibility of games being fixed by gambling interests. And lawmakers also fretted about the social issues sometimes associated with sports betting, namely gambling addiction.

That drumbeat grew loud enough that PASPA came to life. Spearheaded by New Jersey Senator Bill Bradley, the law banned states from passing laws to legalize sports gambling. It allowed exceptions for Nevada and for states where it already existed. It also gave jurisdictions where casinos were in place the chance to legalize gambling within 12 months.

The PASPA bill passed both houses in 1992 and was signed into law by the President. It went into effect in 1993. And that state of affairs held sway for more than two decades before a push by the state of New Jersey began to change things.

Once New Jersey challenged the law, a protracted court battle took place. New Jersey suffered many setbacks within the lower courts, but they didn’t give up the fight. Eventually, the United States Supreme Court heard the case.

In 2018, the Supreme Court ruled in the favor of New Jersey. They deemed that the law was unconstitutional because of how it took the power from states to create their own laws. As soon as the ruling was announced, states around the country with casinos began making plans for legalized sports betting.

In the following article, we’ll take a look at the history behind the Professional and Amateur Sports Protection Act. We’ll talk about what the law meant and which exemptions were included. Finally, we’ll take a look at what led to the law eventually being eradicated by the Supreme Court.

The History of PASPA

As stated above, the Wire Act essentially rendered sports gambling in the United States illegal all the way back in 1961. It made any kind of interstate commerce having to do with sports gambling illegal. And it even put strict restrictions on phone conversations where gambling information was exchanged between parties.

Yet sports gambling, for the most part, continued unabated in the years after. People either did it illegally amongst themselves or using illegal bookmakers in their local towns and states. Or they could do it legally in Nevada, where it was always part of the action in casinos legally.

Lawmakers started to voice concerns around the time the 1980s turned into the 1990s. A committee meeting on the subject came to the conclusion that sports gambling was running rampant and risked getting out of control. NBA commissioner David Stern voiced some of the strongest concerns.

So it was that Bill Bradley, a state Senator from New Jersey and himself a former star basketball player in college and the NBA, introduced an early version of the Professional and Amateur Sports Protection Act in 1991. Bradley wavered on how strong the act should be. At one point, he even postulated that sports gambling should be removed from Las Vegas casinos.

Some lawmakers expressed concern that PASPA law was an overreach of the federal government. After all, what is PASPA if not an attempt by the United States government to tell the states what it could and couldn’t do in terms of sports gambling?

Despite some of those concerns, the law moved quickly through the Senate and House once it was finalized in 1992. On October 28th, 1992, the President at the time, George Herbert Walker Bush, signed it into law. It took effect at the beginning of 1993.

What is PASPA?

1. The PASPA law as it is written does not in any way mention the illegality of sports gambling, nor does it threaten anyone who does manage to make a wager. In essence, those items were covered by the Wire Act. Any further mention by PASPA would have made those restrictions redundant
2. What PASPA law did establish is the fact that no state may create laws that allow gambling on sports in the United States. In this way, the law prevented the states from overriding any federal laws. And it ensured, while it was in existence, the spread of sports gambling would be halted.
3. PASPA did not include restrictions on betting on horse racing, dog racing, or jai alai in the United States. Those sports, which had long been a part of the legal betting landscape, remained legit. But football, baseball, basketball, and all other professional and college sports where gambling interests might come to the fore were included in the gambling ban.

PASPA’s Effect on Sports Betting in the United States

Illegal sports betting continued in much the same way as it always had in the United States. The sports leagues that claimed to be against the prospect of gambling on their games and events didn’t exactly go out of their way to hide point spreads and other items that referred to betting. And United States sports gambling continued in Las Vegas casinos, as PASPA didn’t touch that.

While PASPA law was in effect, bettors could try to get around the law by making bets with overseas sites online. However, the UIGEA, another United States law aimed at illegal gambling that was passed in 2006, made that increasingly difficult to pull off. Specifically, that law cracked down on the options for sports gamblers to fund their accounts.

PASPA Exemptions

We mentioned above that PASPA 1992 did not force sports gambling out of Nevada. Instead, it allowed it to remain along with providing exemptions for some other states that already had gambling laws on the books. In essence, these states could be grandfathered in and continue what sports gambling they had previously allowed.

Those three states were:

• Oregon
• Delaware
• Montana

Each of these states included some sort of sports gambling on the books at the time PASPA was enacted. However, none included the kind of single-game sports betting that could readily be found in Nevada. And those states pretty much kept things limited to lottery or parlay-style wagers in the interim between PASPA and when it was eventually repealed.

States also possessed a window of opportunity of a year from when the PASPA law was created to put some kind of sports gambling on the books, as long as they already had casinos in place. New Jersey, which hosted casinos in Atlantic City for many years by that time, could have really taken advantage of this opportunity. They failed to do so within that one-year limit.

Oddly enough, as we’ll see when we talk about the repeal of PASPA, New Jersey was the state that initiated the action. And they were eventually the ones who succeeded in putting this law to rest, with a big assist from the Supreme Court of the United States.

PASPA Repeal

The PASPA 1992 law did what it was intended to do in halting states from enacting gambling laws. Legal action proved to be the only way that states could do any damage to the law. And that’s exactly what happened once New Jersey started to move on the law at the end of the first decade of the 2000s.

New Jersey had found that its citizens favored the legalization of sports gambling within the state. Obviously, PASPA prevented such efforts. Despite the fact the bill was originated by a New Jersey Senator in Bill Bradley, it was the Garden State that began the efforts to have the law repealed.

To do that, the state began suing for its right to legalize gambling. When those avenues failed at lower courts, the state began passing laws to legalize sports gambling anyway, knowing they would be challenged. And when those efforts failed in the courts, the state then repealed its own gambling law, arguing this was well within its right to do so.

The 10th Amendment to the United States Constitution proved to be the key player in New Jersey’s efforts to upend the PASPA law. This amendment explains, among other things, that the federal government can’t interfere with states passing their own laws. Each time New Jersey went through this process, however, the professional sports leagues in the United States banded together to try to stop them.

Eventually, the case was appealed all the way up to the Supreme Court. After hearing arguments in 2017, the Court passed down its judgment on May 18. This judgment deemed PASPA to be unconstitutional, thus ending the law after it had been in existence for 25 years.

Effect of PASPA Repeal

During the time of the PASPA law, many states that had previously outlawed gambling had loosened their reins. Casinos in the United States sprung up at a record pace, as more and more states legalized them. As a result, the groundwork had already been laid for what was to come once PASPA was repealed.

With the PASPA Supreme Court ruling in place, the states with casinos were free to pass new laws (or repeal old ones), all of it paving the way for legalized sports gambling. They could award licenses to casino operators within the state to begin offering sports betting. And they could also establish an online betting presence within the state as well.

Not surprisingly, New Jersey swiftly moved into action and began creating sportsbooks at their many casinos in Atlantic City. Many other states have followed suit since the PASPA repeal. It’s likely that the trend will continue.

What is clear is that the PASPA repeal reflects a more hands-off attitude to sports gambling in the United States than has ever existed before. Even the sports leagues themselves don’t seem to be putting up much of a fight at the latest developments which, considering their embrace of fantasy sports, isn’t all that surprising. Barring some kind of scandal, it’s likely that the momentum for sports gambling will continue to grow.

PASPA FAQ

Conclusion

The PASPA law proved to be controversial from the time it was enacted all the way through its eventual repeal. It not only interfered with states making decisions about their own welfare, but it also indirectly hampered the personal freedoms of its citizens. Even some anti-gambling proponents felt that it achieved its goals in the wrong way.

The PASPA Supreme Court ruling has now allowed states to open up sports gambling to their residents. And whether another law of its kind comes along in the future remains to be seen. For now, legal sports gambling should continue to grow impressively in the United States.