2018
Murphy v. National Collegiate Athletic Association
New Jersey wanted to repeal its own ban on sports betting, and a federal statute said it could not. The Court held that PASPA's prohibition on state authorization commandeered the states: Congress may regulate sports gambling itself, but it cannot order a state legislature to keep a prohibition on its books. The decision did not legalise anything. It removed the federal instrument that had kept every state but a handful out of the market, and the states moved into the space within months.
Why it still matters
Every legal sportsbook in the United States traces to this holding, and so does the fight over what happens next. Once betting became a matter of state law, the question turned into which state, and whether a federally regulated exchange can bypass all of them — which is the Kalshi litigation now splitting the circuits.
The old rule
PASPA made it unlawful for a state to sponsor, operate, advertise, promote, license or authorize a sports wagering scheme, with a grandfather exception for four states. New Jersey had missed the window to qualify and could not open one by repealing its own prohibition.
The legal hinge
Anticommandeering, not the Commerce Clause. Alito held there is no meaningful distinction between Congress compelling a state to enact a law and Congress forbidding it to repeal one — either way the state legislature is being directed, which the Tenth Amendment does not permit.
What people believe
The Supreme Court legalised sports betting.
What actually happened
The Court legalised nothing. It struck down a federal statute that had prevented states from legalising it themselves, on a federalism ground that has nothing to do with gambling. Congress remains free to regulate sports wagering directly. It simply has not.
What it cost
Carried by New Jersey across six years of litigation, two Third Circuit losses and an en banc rehearing before reaching the Court. The state spent the money and absorbed the losses; the operators that moved in afterward spent neither.
Who captured it
The sportsbooks, the leagues that had opposed the case and then signed data and sponsorship deals with the industry it opened, and the states collecting the tax. New Jersey got a market it now shares with most of the country.
If it had gone the other way
The pressure was building and PASPA was an unusual statute, but there was no other route: the Third Circuit had rejected New Jersey twice and no other state had carried a challenge this far. Without the anticommandeering holding, sports betting stays where it was until Congress acts, and Congress had shown no sign of acting. This is one where the case, not the trend, is the cause.
Why you still care
Sources
Historical summaries prepared from published opinions and secondary sources. Commentary and analysis, not legal advice.