Reprinted from the St. Louis Post-Dispatch March 6.
This spring or early summer, the U.S. Supreme Court might legalize sports betting across the country. Missouri, Illinois and Iowa are among dozens of states where Legislatures are scrambling to get ready.
Missouri, where several legalized sports betting bills already have had committee hearings, is moving faster than Illinois, where gambling-expansion legislation often runs afoul of efforts to expand the casino industry.
The proposed legislation in Iowa would place sports betting under the direction of the state’s casinos, and the activity would be regulated by the state’s Racing and Gaming Commission. Bettors could wager on professional and college athletics. Properties that wish to host sports betting would be required to pay a $25,000 license fee, and a tax of 8 percent on sports betting revenue would be applied.
Supreme Court oddsmakers are betting the justices will side with the state of New Jersey when they decide Christie v. NCAA, which would invalidate a 1992 federal law banning states from authorizing and licensing sports betting. In oral arguments heard in December, a majority of the justices appeared sympathetic to New Jersey’s argument that the 10th Amendment prohibits Congress from “commandeering” states into enforcing federal law.
It is a tricky argument that holds implications beyond sports. What about other federal prohibitions, including legalized marijuana and euthanasia? The 10th Amendment reserves to the states or the people any powers not specifically granted to the federal government, but courts have generally upheld the Constitution’s Supremacy Clause as meaning federal law pre-empts conflicting state laws.
During oral arguments, the Supreme Court’s conservative majority seemed prepared to let other states join Nevada, Delaware, Oregon and Montana, where sports betting was legal before the 1992 law was passed.
The American Gaming Association estimates at least $150 billion a year is bet illegally on sports. No one knows for sure, and other estimates run as high as $400 billion. Whatever it is, states are hoping to peel some of it off.
Sen. Denny Hoskins, R-Warrensburg, estimates Missouri could reap $18 million to $40 million in new revenue if his Senate Bill 1013 passes. At least four competing bills have been introduced, including one containing the terrible idea to legalize video gambling games at bars, restaurants and fraternal organizations.
Generally, sports bettors would have to sign up at one of the state’s 12 casinos. Their accounts would be run through a phone app so they could bet anywhere in Missouri. Hoskins’ bill would be the most lucrative for the state. It would impose a 12 percent tax on the adjusted gross betting receipts as well as 2 percent administrative fee. In addition, sports leagues would get 1 percent of everything bet on their games for “integrity enforcement.”
Pro sports leagues are generally on board. The NCAA is not and would be able to opt out under state laws.
Nonetheless, when the Final Four begins next week, you may be shocked — shocked — to find gambling is going on.