Legalized Sports Wagering in America
60 Pages Posted: 14 Sep 2022 Last revised: 23 Jan 2024
Date Written: September 12, 2022
For 25 years, state legislative efforts to legalize, tax, and regulate sports wagering were forestalled by a federal law that disallowed new states from legalizing sports wagering. This freeze on new state-sponsored sports wagering ended abruptly on May 14, 2018, when the U.S. Supreme Court ruled in Murphy v. NCAA that the Professional and Amateur Sports Protection Act violated the U.S. Constitution by impermissibly commandeering the states.
Since the U.S. Supreme Court’s ruling in Murphy, there has been a rapid proliferation of legalized and regulated sports wagering throughout much of the United States. At present, 35 states allow for some form of legalized and regulated sports wagering, with most of these states allowing for sports wagering not only in the brick-and-mortar format but also online and on mobile applications.
This rapid proliferation of sports wagering, however, has not always gone perfectly. At present, some states enforce strict limits on the number of companies that are eligible to obtain sports wagering licenses. Other states have implemented hefty taxation schemes that have made it difficult for any licensed operator to turn a profit. Meanwhile, still other states have focused primarily on maximizing tax revenues while doing little, if anything, to protect the interests of consumers including problem gamblers.
This Article provides an expert-level analysis of the emergent market for regulated sports wagering— examining the evolution of sports wagering before legalization, the Murphy decision, and the market for sports wagering since Murphy. The Article then proceeds to elucidate some of the high-profile failures of the present market for sports wagering and examines ways of ameliorating many of these failures.
Keywords: Sports gambling, federalism, regulation, gaming policy, gaming, wagering
JEL Classification: K00, K10, K11, K19, K20, K23, K29, K30, K39, K40, K49, L50, L59, L80, L83, L89, O34
Suggested Citation: Suggested Citation