The Impact On The NHL Of The U.S. Supreme Court Decision On Legalized Gambling

In perhaps the most influential decision regarding sports in recent memory, the U.S. Supreme Court today held that prohibiting the states from deciding for themselves on whether or not to legalize sports gambling was an unconstitutional practice. Until now, the Professional and Amateur Sports Protection Act of 1992 (PASPA) had limited legalized sports betting to just four grandfathered states – Delaware, Montana, Oregon, and of course Nevada – under a federal ban. However, the decision in Murphy v. NCAA now empowers each state to move forward with sports gambling legislation if they so choose. It is a monumental shift in the spectator sports paradigm and not a decision that came easily. As Sports Illustrated’s Michael McCann writes, the Supreme Court was split 7-2 in the decision and even in the majority opinion Justice Samuel Alito states that this the issue of sports gambling is and will continue to be a topic that is up to the individual to decide on and the Supreme Court’s decision does not condone gambling, so much as it acknowledges the states’ rights to allow it. It was the court’s belief that the U.S. Constitution gave the federal government no specific power in this area and that PAPSA operated to command the state governments on how they must function, also known as commandeering, which is not allowed.

So what impact will this decision have on the NHL? The NHL, as well as the other three major North American sports leagues and even the Department of Justice, joined the NCAA in this case against the state of New Jersey. All of these parties are likely reeling after this decision, which had previously been found in their favor at both the district court and appeals court levels. The main argument in defense of PAPSA is to protect the integrity of sport based on the belief that an increased access to sports gambling could hurt the product or at least its image due to corruption. However, the other side of that specific argument is that legalized gambling – controlled, safeguarded, and monitored by the states – may actually serve to remove many illegal, behind-the-scenes gambling influences.

The leagues also stand to benefit substantially from “integrity fees”, writes McCann in a second piece. Practicing some gambling of their own, the leagues hedged their bet on the result of the case by developing the plan to demand fees from betting operations for the use of their product and information. These fees would help to make up for the risk the league’s feel is associated with an increase in gambling. While McCann opines that some operations and even some states are likely to fight these fees, the legislative process to get legalized gambling up and running in each state will be arduous enough that the fees will likely be paid to avoid yet another roadblock. These fees will then need to be incorporated into each league’s revenue-sharing scheme to divvy up the proceeds between owners and players alike.

So, while Philadelphia Flyers GM Ron Hextall believes that today’s decision will not affect NHL players, per beat writer Sam Carchidi, it seems likely that the rise of legalized gambling will actually serve to benefit the players. Where Hextall is correct is that it is unlikely to have much of an effect on the integrity of the game or how players handle themselves due to the aforementioned shift of gambling from out of the shadows and into a controlled environment. Washington Capitals owner Ted Leonsis, who also owns the NBA’s Washington Wizards, said something to the same effect, as Carchidi writes that Leonsis feels legalized gambling ensures “integrity can be guaranteed and consumers can be better protected.” Leonsis adds that the decision will “change the face of sports fandom for the better” and “bring fans closer to the game”. The increase in revenue from “integrity fees” and an increase in attention paid to hockey by gambling accessibility appears primed to actually benefit players and teams alike, despite the league’s stance in opposition.

For their part, the NHL has stated that “the Supreme Court’s decision today paves the way to an entirely different landscape – one in which we have not previously operated. We will review our current practices and policies and decide whether adjustments are needed… (there will be) no immediate impact on existing league rules relating to sports wagering, and particularly, wagering involving NHL games.” The league will have to be flexible in dealing with the rise of sports gambling, especially in each of the 16 states that house NHL teams and do not already have sports betting laws in place (all except Nevada (VGK) and New Jersey (NJD)), but it seems that in all likelihood this decision could be good for the league. As Justice Alito wrote in the decision, gambling is at its essence a personal decision and opinions vary greatly, but a controlled, legalized gambling system is on its way in the U.S. states and the NHL appears to be a potential beneficiary.