• SMM Law

The Sports Industry Is Changing, You Can Bet On It

Updated: Sep 20, 2019

On May 14, 2018, the United States Supreme Court held that the Professional and Amateur Protection Act of 1992 (“PAPSA”) was unconstitutional in Murphy v. National Collegiate Athletic Association, revolutionizing the world of sports betting in the United States. The groundbreaking decision has left the door open for state legislatures to establish state-regulated sport betting industries, which several states have already taken advantage of. As of August 2019, ten states have utilized the Murphy decision to legalize sports betting, while another eight have pending legislation to do so. Specifically, New York legislators have chosen to take advantage of the Murphy decision and craft new legislation which has legalized sports betting within the state. In doing so, the state of New York has employed a federalist power previously withheld by PAPSA and the opportunity to shape the future of the sports industry in New York has begun.

With the change in federal law under Murphy, the Upstate New York Gaming Economic Development Act of 2013 now includes “sports wagering” and deems the activity lawful, with heavy restrictions. Beginning in Fall 2019, in-person sports betting will become legal at four upstate New York Casinos and at Native American casinos. The casinos where in-person sports betting will be legal are as follows: (1) del Lago Resort & Casino; (2) Tioga Downs Casino Resort; (3) Rivers Casino & Resort Schenectady; (4) Resorts World Catskills; (5) Turning Stone Casino Resort; and (6) Point Place Casino. While regulations to the Upstate New York Gaming Economic Development Act of 2013 has approved in-person sports betting at these locations, mobile and online wagering is excluded and is currently illegal under New York law. Given that mobile and online wagering has been legalized in other states—including neighboring New Jersey—the possibility of New York lawmakers entertaining the idea during the 2020 legislative session is a likely possibility. However, until that type of legislation is proposed and moves forward, sports betting will continue to only be legal at select New York casinos in limited capacity.

The Murphy decision has given federalists a blank canvas to explore the re-discovered frontier of sports gambling and the unconstitutionality of PAPSA should be viewed by lawmakers as an opportunity to revolutionize the sporting industry. In particular, the state of New York has the ability to expand the boundaries of the sports betting arena. However, the future of sports betting in New York will be determined by the ambition of the New York legislature. Given the current narrow scope of legal sports betting in New York, there is plenty of room for expansion and improvement. Since there is a large market for mobile and online wagering, it will be interesting to see which direction the New York sports betting laws venture in the years to come. For the time being, New Yorkers will have to make the drive upstate to take advantage of legal sports betting until less conservative sports wagering laws are given the green light.

This publication is issued by Simon Meyrowitz & Meyrowitz, P.C. for informational purposes only and does not constitute legal advice or establish an attorney-client relationship. To ensure compliance with requirements imposed by the IRS, we inform you that unless specifically indicated otherwise, any tax advice contained in this publication was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any tax-related matter addressed herein. In some jurisdictions, this publication may be considered attorney advertising.

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