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The U.S. Supreme Court ruling in favor of New Jersey on Monday effectively killed the Professional and Amateur Sports Protection Act (PASPA), the federal law that essentially limited sports betting to Nevada for the past 25 years. PASPA was declared unconstitutional in the 6-3 decision, meaning it will be up to states -- including New Jersey, which has sought to establish sports gambling for years -- to decide whether to allow its residents to bet on sports. Here's a breakdown of what the ruling by the nation's highest court means:
Question: What is PASPA?
Answer: PASPA was signed into law by President George H.W. Bush in 1992 and went into effect in January 1993.
PASPA didn't outlaw sports betting because that was already illegal. Rather, PASPA banned states -- outside those given exemptions -- from regulating (and taxing) sports betting.
Despite PASPA's existence, the American Gaming Association (AGA) estimates at least $150 billion a year is gambled on sports in the USA and 97% of that amount was bet illegally.
Q: How soon could states offer sanctioned sports betting?
A: Many states are likely to move quickly to establish sports betting as a means to increase their respective coffers. West Virginia Lottery general counsel Danielle Boyd told Legal Sports Report that the state -- which passed a law to authorize sports betting -- could have sports betting within 90 days of PASPA's repeal.
Q: Now that it's legal, what barriers remain?
A: Some legislation -- such as a proposal in Pennsylvania -- requires a one-time license fee of up to $10 million, along with a tax of as much as 34% on gross receipts, something AGA Senior Vice President of Public Affairs Sara Slane told USA TODAY Sports could be a non-starter for potential operators.
"I think their intentions are good," Slane said. "I think some states will have to go back and structure a policy that will allow operators to want to come into the state."
Q: What do pro sports leagues stand to gain?
A: The NBA and MLB pushed the idea of a 1% sports integrity fee. (This would be taken out of all sports bets before the government gets to tax bets.) Slane said the fee would take such a chunk that it would make legalized sports betting non-viable.
According to the AGA, the average sports book keeps about 5% of the money wagered. The fee would limit how much each state could earn in tax revenue. Nevada sports books operated for decades without such a fee.
"The major professional sports leagues earn exorbitant profits from ticket sales, concessions, merchandise and advertising rights, and while we welcome their support for our efforts to end the failed ban on sports wagering, we do not agree that it is good policy for the leagues to take money away from law enforcement agencies that neither they nor their athletes have earned," Chuck Canterbury, national president of the Fraternal Order of Police, said in a statement. "Our professional leagues should focus on their sport and let us focus on enforcing the law."
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