Government Law & Policies

If PASPA is Repealed, Then What?

Much has been written about the Professional and Amateur Sports Protection Act (PASPA) and its possible repeal. To summarize, there are three possible outcomes. The first is that the Supreme Court of the United States (SCOTUS) rules PASPA is unconstitutional. In that case, it will be up to individual states to decide whether to allow sports betting and the various forms it might take. The second scenario is that SCOTUS lets PASPA stand in its current form. In this scenario it would be up to Congress to decide if it wants to repeal or amend PASPA. Given the current political climate in Washington D.C., passage of such a bill might take some time. The third scenario is that SCOTUS takes a completely different route, either issuing a partial repeal or
potentially invalidating the four state exemption that currently exists.

Should the Supreme Court rule in New Jersey’s favor, one can expect sports betting to be available in a number of jurisdictions in fairly short order. Five states, outside of the four that
already had legislation in place prior to the passage of PASPA in 1992, have already passed legislation authorizing sports betting, and approximately fifteen others are considering enabling legislation or studying the issue. The question now becomes, should PASPA be repealed, what are the challenges that America’s tribes face in creating sports betting products that are competitive with what various states with commercial casinos and lotteries will ultimately offer.

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Research Brief: SCOTUS Repeal of PASPA

Earlier today, the U.S. Supreme Court issued a ruling on the constitutionality of the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) in the Murphy v. NCAA case overturning the law and allowing sports betting to move forward in the United States. In a 7-2 decision, the Supreme Court also provided a victory for states’ rights. Today’s ruling allows commercial entities in states and Native American tribes to move forward to conduct sports wagering.

The Murphy v. NCAA case was heard by the Court in December. At the time, Global Market Advisors (GMA) had predicted that the court would rule in favor of states’ rights and sports betting on a 6 – 3 vote supporting New Jersey’s argument. The opinion of the Court issued today was led by Justice Samuel Alito and supported by Chief Justice John Roberts and Justices Stephen Breyer, Neil Gorsuch, Elena Kagan, and Anthony Kennedy. Justice Clarence Thomas wrote a concurring opinion. The dissenting opinion was issued by Justices Ruth Bader Ginsburg and Sonia Sotomayor. Justice Breyer joined the dissenting opinion on a small portion of the overall opinion from the court.

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Research Brief: The Economics of Sports Betting

As the United States awaits a decision by the U.S. Supreme Court on the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) in the Murphy v. NCAA case, stakeholders are busy evaluating the size of the sports betting market opportunity and contemplating how to take advantage of the opportunity. Several government stakeholders have already enacted legislation
regarding the potential for sports betting, including the most recent legislation passed in Pennsylvania (2017) and West Virginia (2018). Many other state governments have introduced
proposed legislation for the new potential market opportunity, including Iowa, Illinois, Michigan, New York, and Connecticut.

These enacted and proposed legislative pieces have begun to shape the potential regulatory framework of a legalized sports betting market in each state, including setting tax rates and
licensing fees. Other stakeholders, including the professional sports leagues, have suggested that an integrity (royalty) fee should be levied as well. Unfortunately, some of these proposed taxes and levies do not fit within the economic construct of the sports betting opportunity as the margins achieved in the industry are too slim for the operator to generate enough profit to justify investment.

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Research Brief: U.S. Supreme Court Sports Betting Update

Today, the Supreme Court of the United States (SCOTUS) heard the Christie v. NCAA case. SCOTUS listened to arguments from former Solicitor General Theodore Olson, representing Governor Christie and the State of New Jersey. The NCAA case was led by former Solicitor General Paul Clement, who defended that the Professional and Amateur Sports Protection Act (PASPA) should remain the law by upholding the Third Circuit Court of Appeals previous decision.

Based on the arguments, Global Market Advisors (GMA) believes that if a vote were held today, SCOTUS would vote 6-3 in favor of New Jersey, thereby repealing PASPA and overruling the lower court decision. The majority opinion would include Chief Justice Roberts and Justices Alito, Breyer, Gorsuch, and Kennedy. Those five, in addition to Justice Thomas, who seldom asks questions within the court, but tends to side with the more conservative judges, appeared skeptical of the argument presented by the NCAA.

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An Examination of sports betting in America

On December 4, 2017, the Supreme Court of the United States (“SCOTUS”) will hear New Jersey’s case to have the Professional and Amateur Sports Protection Act (“PASPA”) overturned. This review of PASPA, which effectively limits legal sports betting to only the state of Nevada, and to a lesser extent Delaware, Montana, and Oregon, has the potential to be a landmark states’ rights decision. To the gaming and hospitality industry, it has the potential to allow for another source of gaming entertainment and improve profit levels for operators. To government authorities, it has the potential to reduce illegal gaming activities and increase tax revenues.

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Research Brief: Japan Post-Election IR Bill Update

The Japanese snap election for the lower house has concluded. The Liberal Democrat Party (LDP) and Japanese Prime Minister Shinzo Abe came out on top after a very calculated risk. The LDP
has a majority win in the House of Representatives and, in partnership with the Komeito, now have a two-thirds super majority. This will allow the ruling parties to push their agenda forward,
focusing on several key items including the reallocation of taxes, childcare, preschool education, and the initiation of constitutional revisions. This is in addition to dealing with the labor crunch and the low birthrate that affect Japan’s economy.

In addition and most importantly to the gaming and hospitality industry, it allows for the continued development of Integrated Resorts through the expected passage of the IR Implementation Bill after the passage of the Responsible Gaming Bill in the coming months to a year. IRs will infuse capital projects into the country while serving as a driver to help meet Japan’s
goal of tourism growth.

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Research Brief: Sports Betting & Recent U.S. State Legislative Action

As the calendar reaches the midpoint, many state legislatures are adjourning for the summer or finalizing their budgets prior to the start of the fiscal year. The end of June is also the time when the Supreme Court of the United States’ (SCOTUS) term comes to an end, decisions are rendered, and announcements made for cases to be taken up in the next term that begins in October. GMA provides the following summary of relevant legislative happenings across the United States.

Last week, SCOTUS changed the dialogue within the United States gaming landscape when it announced that it would hear the New Jersey sports betting case (Christie Vs. NCAA) in its next term. Currently, only Nevada, Delaware, Montana, and Oregon allow some form of sports betting. The American Gaming Association (AGA) estimates that the illegal, unregulated sports betting market is a $150 billion-a-year industry. Many estimate that number to be far greater. While most in the industry see this as an opportunity on sports betting, a ruling by SCOTUS in this case has far more to do with states’ rights than wagering on sports.

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White Paper: Japan Integrated Resorts Executive Summary

The next emerging integrated resort market is on the horizon in Japan. After years of debate, Japan is in the process of developing legislation to create the regulatory and market structure for integrated resorts (“IR”). While the debate still has several issues to work through, Japan has the potential to be one of the largest gaming markets in the world with a revenue potential of $24.2 billion, assuming fully developed IRs are introduced in six regions. Global Market Advisors (“GMA”) completed a detailed analysis that examined the current gaming market, the prospective legislation, components of the RFP process, potential sites, definition of an integrated resort, and the full market potential.

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White Paper: Japan Integrated Resorts

The next emerging integrated resort market is on the horizon in Japan. After years of debate, Japan is in the process of developing legislation to create the regulatory and market structure for integrated resorts (“IR”). While the debate still has several issues to work through, Japan has the potential to be one of the largest gaming markets in the world with a revenue potential of $24.2 billion, assuming fully developed IRs are introduced in six regions. Global Market Advisors (“GMA”) completed a detailed analysis that examined the current gaming market, the prospective legislation, components of the RFP process, potential sites, definition of an integrated resort, and the full market potential.

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White Paper: Japan Integrated Resorts (in Japanese)

統合型リゾート市場が次に新たに出現する兆しが日本でも見られる。数年の議論を経て、日本は統合型リゾート(「IR」)についての規制構造および市場構造を作り出すための立法を開発する過程にある。この議論にはまだ解決すべき複数の問題がある一方で、完全に開発されたIRが6つの地域で導入されたと仮定すれば、日本は242億ドルの潜在的収益を見込む世界で最大のゲーミング市場の1つになる可能性がある。グローバル・マーケット・アドバイザーズ(「GMA」)は、現在のゲーミング市場、将来の立法、RFP(事業提案公募)過程の構成要素、潜在的用地、統合型リゾートの定義および総合的な市場可能性を考察した詳細な分析を完了した。

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