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In a Jackpot for Atlantic City Casinos, Supreme Court Allows States to Legalize Sports Betting

Floodgates Now Open for Sports Gambling Across the Country
May 14, 2018
Ocean Resort Casino opening next month in Atlantic City is making sports entertainment a big part of the casino's differentiation strategy. Credit: AC Ocean Walk

In a boost not to just Atlantic City but to betting venues across the country, the Supreme Court this morning overturned a 1992 federal law that had prohibited most states from authorizing sports betting.

The court said the federal law violated constitutional principles limiting the federal government from controlling state policy. It unconstitutionally required states to prohibit sports betting under their own laws.

Atlantic City, which has seen five of more than a dozen casino/hotels closed over the last five years, will see two of them re-open next month under new ownership and management. The new operators were placing their bets in part on New Jersey winning its case at the Supreme Court.

It is "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 government had no right to tell them no," tweeted former New Jersey governor Chris Christie who initiated the legal actions. "The Supreme Court agrees with us today."

The Supreme Court decision does not just affect New Jersey. The floodgates are now officially open for other states to allow sports betting as well, said Daniel Wallach, a gaming and sports law lawyer with the law firm of Becker & Poliakoff in Fort Lauderdale.

With states now authorized to legalize sports betting, Wallach predicts there will be a flurry of state legislation hoping to raise revenue from the activity.

New Jersey racetracks and casinos, which have mobilized ahead of time, could be taking bets before the end of the summer, Wallach said. Other states will not be far behind. Pennsylvania, Connecticut, West Virginia, and Mississippi have already passed bills, and an additional 14 states have already introduced bills.

The U.S. Supreme Court heard oral arguments last December in a case brought by the state of New Jersey arguing for the right to allow sports betting in the state.

The decision was a setback for professional and collegiate sports leagues and organizations, including the National Collegiate Athletic Association, the National Football League, Major League Baseball and National Basketball Association that supported the ban on sports betting, contending the ban is necessary to protect the integrity of their games.

In its majority ruling, the Supreme Court made note of the controversial subject: "Supporters argue that legalization will produce revenue for the States and critically weaken illegal sports betting operations, which are often run by organized crime," according to the majority ruling written by Justice Samuel Alito. "Opponents contend that legalizing sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports."

The court was careful to point out in its ruling that it is well within the power of Congress to outlaw sports betting, but it must do so by directly addressing the issue in a federal statute, not by the round-about way the current statute is written, which merely prevents states, with a carve-out exemption for Nevada, from passing laws authorizing such betting.

"Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own," Justice Alito wrote.

Hyatt Hotels Corp. and AC Ocean Walk are opening the 1,399-room Ocean Resort Casino and they are making sports entertainment a big part of the casino's differentiation strategy. The hotel casino will be home to the largest Topgolf Swing Suite to the Boardwalk, featuring 11 bays, a first-of-its-kind virtual putting green, and other interactive multi-sport games.

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