Murphy v. NCAA: How New Jersey Broke the Federal Sports Betting Ban

Based on Wikipedia: Murphy v. National Collegiate Athletic Association

In May 2018, the Supreme Court handed down a decision that would transform the American gambling landscape almost overnight. Within months, states across the country would begin legalizing sports betting. Billions of dollars would flow into a newly legitimized industry. And it all hinged on a legal principle with an unwieldy name: anticommandeering.

The case was Murphy v. National Collegiate Athletic Association. New Jersey had spent nearly a decade fighting for the right to let its casinos and racetracks take bets on professional sports. The federal government said no. The major sports leagues—the National Basketball Association, the National Football League, Major League Baseball, the National Hockey League, and the National Collegiate Athletic Association—all said no. And for years, the courts agreed with them.

Then, in a 7-2 decision, the Supreme Court said yes.

The Federal Ban Nobody Wanted

To understand how we got here, you need to go back to 1992. That year, Congress passed the Professional and Amateur Sports Protection Act, known as PASPA. The law prohibited states from sponsoring, operating, advertising, promoting, licensing, or authorizing sports gambling "by law or compact."

There was a catch, though. Four states—Nevada, Delaware, Oregon, and Montana—had already established legal sports gambling before PASPA took effect. They got to keep their operations. Everyone else was locked out.

New Jersey almost made the cut. The law included a one-year window for states to apply for an exemption, and New Jersey could have qualified. But internal political squabbling in Trenton meant the state never acted before the window closed in 1991. It was a decision that would haunt the Garden State for decades.

Six Hundred Million Reasons to Fight

By 2010, New Jersey was watching money pour into Nevada's legal sportsbooks—and into illegal offshore gambling operations—that could have been flowing into Atlantic City's struggling casinos. A 2008 analysis by financial firm Cantor Fitzgerald estimated the state was losing upward of six hundred million dollars annually in potential gambling revenue.

State Senators Raymond Lesniak and Stephen Sweeney led the charge to challenge PASPA. Their first attempt in 2011 went nowhere—a federal district court ruled that only the governor, through the attorney general's office, could file such a lawsuit. And Governor Chris Christie wasn't interested. He believed fighting the federal ban would be too difficult.

But something shifted. New Jersey voters approved a nonbinding referendum in 2011 that would amend the state constitution to permit sports gambling. The vote wasn't even close—the public wanted in on the action.

The following year, the state legislature passed the Sports Wagering Act, which authorized sports betting at New Jersey casinos and racetracks. The law was a direct challenge to PASPA, and everyone knew it.

The Leagues Strike Back

Within months, the five major sports leagues sued to stop New Jersey's law from taking effect. The Department of Justice joined them. The case became known as Christie I.

New Jersey's argument was clever. The state didn't deny that its new law violated PASPA. Instead, it argued that PASPA itself was unconstitutional. The state pointed to the Tenth Amendment, which reserves to the states all powers not delegated to the federal government. More specifically, New Jersey invoked what's called the anticommandeering doctrine.

The idea behind anticommandeering is straightforward: the federal government cannot order state legislatures to pass laws or direct state officials to enforce federal policy. Congress can regulate behavior directly through federal law. It can offer states money in exchange for adopting certain policies. But it cannot simply command states to do its bidding.

New Jersey argued that PASPA did exactly that. By forbidding states from "authorizing" sports gambling, the federal law was essentially commanding states to maintain their own prohibitions on betting. Congress wasn't regulating gambling directly—it was forcing states to regulate gambling for it.

The First Defeats

The federal courts weren't buying it. In February 2013, Judge Michael Shipp of the District Court for the District of New Jersey ruled for the leagues. He found "an undisputed direct link between legalized gambling and harm to the Leagues" and issued an injunction blocking New Jersey's law.

New Jersey appealed to the Third Circuit Court of Appeals. The state lost again, 2-1. But buried in the Third Circuit's decision was a sentence that would prove crucial: "We do not read PASPA to prohibit New Jersey from repealing its ban on sports wagering."

The court was drawing a distinction between authorizing something and simply declining to prohibit it. PASPA prevented states from actively licensing and promoting sports gambling. But maybe—just maybe—a state could simply repeal its own laws against betting and let the chips fall where they may.

The Supreme Court declined to hear the case. Christie I was over.

The Loophole

Senator Lesniak spotted the opportunity. If New Jersey couldn't authorize sports betting, perhaps it could achieve the same result by un-prohibiting it. Working with the Justice Department, he drafted a new bill. Instead of creating a licensing regime for sports gambling, the bill simply repealed portions of existing New Jersey laws from 1977 that banned betting on sports.

It was a legal sleight of hand. The state wouldn't be authorizing anything. It would just be getting out of the way.

Governor Christie initially vetoed the bill, believing it was too transparent an attempt to circumvent the Third Circuit's ruling. But by September 2014, he had changed his mind. Within five weeks, Lesniak's legislation became law.

Christie II: The Rematch

The leagues sued again. This time, the case was called Christie II.

Once more, New Jersey lost in the district court. Once more, the state lost in the Third Circuit. Both courts ruled that repealing only portions of state gambling laws was functionally equivalent to authorizing sports betting—exactly what PASPA prohibited.

But the Third Circuit's second decision was more fractured than the first. The same judge who had written the original opinion dissented from the new ruling. New Jersey requested an en banc hearing, meaning the full Third Circuit would consider the case rather than just a three-judge panel.

In August 2016, the full court sided with the leagues, 9-3. The majority held that PASPA did not commandeer the states because it "did not command states to take affirmative actions."

Three judges disagreed. Their dissents provided ammunition for one final appeal.

The Supreme Court Steps In

New Jersey's petition to the Supreme Court posed a precise question: "Does a federal statute that prohibits modification or repeal of state-law prohibitions on private conduct impermissibly commandeer the regulatory power of States?"

The state cited New York v. United States, a 1992 case in which the Supreme Court struck down a federal law requiring states to take responsibility for radioactive waste generated within their borders. That case established the anticommandeering principle. New Jersey argued it should apply here too.

In June 2017, the Supreme Court agreed to hear the case. It consolidated New Jersey's appeal with a separate petition from the New Jersey Thoroughbred Horsemen's Association, which operated Monmouth Park Racetrack and argued that PASPA was crushing its business.

During the proceedings, Chris Christie's term as governor ended. Phil Murphy took office. The case was renamed Murphy v. National Collegiate Athletic Association.

A Constitutional Showdown

The oral arguments in December 2017 went poorly for the leagues and the federal government. Several justices seemed skeptical that PASPA could survive constitutional scrutiny.

The core debate centered on a deceptively simple question: What's the difference between Congress ordering states to do something and Congress ordering states not to do something?

PASPA's defenders argued there was a crucial distinction. The law didn't require states to take any affirmative action. It simply prohibited them from authorizing sports gambling. States remained free to do nothing—to leave their existing gambling bans in place.

New Jersey countered that this distinction was meaningless. Either way, Congress was dictating what state legislatures could and couldn't do. That violated the anticommandeering principle regardless of whether the federal command was phrased as a "do this" or a "don't do that."

The Decision

On May 14, 2018, Justice Samuel Alito delivered the Court's opinion. New Jersey had won.

The majority agreed that PASPA's prohibition on state authorization of sports gambling violated the anticommandeering principle. The key passage cut through years of legal hairsplitting:

"This distinction is empty. It was a matter of happenstance that the laws challenged in New York and Printz commanded 'affirmative' action as opposed to imposing a prohibition. The basic principle—that Congress cannot issue direct orders to state legislatures—applies in either event."

Alito explained that Congress has two options when it wants to regulate an activity like sports gambling. It can pass a federal law directly regulating the conduct. Or it can do nothing, leaving each state free to set its own policy. What Congress cannot do is order states to maintain their own prohibitions.

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

Why Preemption Didn't Save PASPA

The leagues and the federal government had one major fallback argument: even if PASPA technically commandeered state legislatures, it could survive under the Supremacy Clause of the Constitution. That clause establishes that federal law trumps conflicting state law. Maybe PASPA simply preempted state gambling regulations.

The Court rejected this argument in detail. Justice Alito explained that for federal preemption to work, the federal law must actually regulate something. Preemption happens when a valid federal regulation conflicts with a state regulation, and the federal rule wins.

But PASPA didn't regulate sports gambling. It didn't create any federal right to engage in betting. It didn't impose any federal restrictions on bettors or gambling operators. If someone opened a sportsbook without state authorization, PASPA provided no basis for federal enforcement. The law's only function was to tell states what they could and couldn't do with their own legislation.

That made it a command to state governments, not a regulation of private conduct. And commands to state governments are exactly what the anticommandeering doctrine forbids.

The Three Flavors of Preemption

The Court's opinion provided a useful taxonomy of federal preemption, explaining why none of the three recognized types could save PASPA.

Conflict preemption occurs when federal and state laws directly contradict each other. If federal law says pharmaceutical companies can't change FDA-approved drug labels, and state tort law would require them to add warnings, the federal rule wins. But in such cases, the federal law is regulating the companies—private actors—not the states.

Express preemption occurs when Congress explicitly states that federal law overrides state law in a particular area. The Airline Deregulation Act, for example, says states cannot regulate airline rates, routes, or services. This might sound like a command to states, but the Court explained that it actually confers a federal right on airlines to operate free from state interference. The regulation targets private actors, not state governments.

Field preemption occurs when federal regulation of an area is so comprehensive that there's no room for state law to operate. Immigration is a classic example. But again, the federal government is regulating the underlying conduct, not ordering states to regulate or not regulate.

PASPA fit none of these categories. It didn't regulate gambling. It regulated state legislatures. And that's unconstitutional.

Severability and the Death of PASPA

Having found one section of PASPA unconstitutional, the Court had to decide whether the rest of the law could survive. The doctrine of severability asks whether Congress would have wanted the remaining provisions to stand on their own, or whether the unconstitutional section was so central that the whole law must fall.

Six justices concluded that PASPA couldn't be salvaged. The provision prohibiting state authorization was the heart of the law. Without it, the remaining sections—which prohibited private gambling operations not licensed by states—made little sense. The entire statute was struck down.

Justice Clarence Thomas wrote a concurrence agreeing with the result but questioning the severability doctrine itself. He argued that courts shouldn't have to guess what Congress would have wanted. If a law is partially unconstitutional, the unconstitutional part is void, and Congress can decide whether to pass something new.

Justice Stephen Breyer disagreed on severability, arguing that the provisions against unlicensed private gambling could remain in force even without the antiauthorization section. But he agreed that the core of PASPA violated the Constitution.

The Dissent

Justice Ruth Bader Ginsburg, joined by Justice Sonia Sotomayor, dissented. She argued that striking down all of PASPA went too far. The dissenters believed the Court should have invalidated only the specific provision that commandeered state legislatures, leaving the rest of the law intact.

Ginsburg suggested the majority was motivated less by constitutional principle than by a desire to see sports betting legalized. It was a pointed criticism, though it didn't change the outcome.

The Floodgates Open

The practical effect was immediate and dramatic. Within months, states began passing sports betting legislation. New Jersey's casinos and racetracks started taking bets that summer. Pennsylvania, West Virginia, Mississippi, and Rhode Island followed before the year was out.

By 2024, more than thirty states had legalized some form of sports betting. The American Gaming Association estimated that Americans wagered over one hundred billion dollars legally on sports in 2023 alone. Mobile betting apps became ubiquitous. Sportsbook advertisements saturated broadcasts of the very games people were betting on.

The industry that PASPA had tried to contain for a quarter century exploded in less than five years.

The Broader Implications

Murphy v. NCAA matters beyond gambling. The anticommandeering principle it reinforced has implications for any area where federal and state policy might diverge.

Consider marijuana. Federal law still classifies cannabis as a Schedule I controlled substance, making it illegal nationwide. Yet dozens of states have legalized medical marijuana, recreational marijuana, or both. The federal government hasn't tried to force states to re-criminalize cannabis, but Murphy confirms that it couldn't do so even if it wanted to. Congress can enforce federal marijuana laws directly, but it cannot order states to maintain their own prohibitions.

The same logic applies to immigration enforcement, environmental regulation, gun control, and countless other areas where state and federal policies might conflict. The federal government is powerful, but it cannot govern through the states. It must govern directly or not at all.

The Irony of Christie's Victory

There's a final irony worth noting. Chris Christie, who initially refused to challenge PASPA and vetoed the first attempt at a workaround, became so associated with the litigation that both circuit court cases bore his name. By the time the Supreme Court ruled, he was out of office, and the victory went to his successor.

Phil Murphy, a Democrat who had defeated Christie's preferred successor, got his name on the landmark decision. Christie got nothing but a footnote—and the knowledge that the fight he once thought unwinnable had succeeded beyond anyone's expectations.

New Jersey's decade-long legal battle ended not with a whimper but with a constitutional earthquake. The state that missed its chance in 1991 had reshaped the law of the land. And for better or worse, America would never look at sports—or gambling—quite the same way again.