Gambling stocks jump after US Supreme Court freed states to legalise sports betting
The US Supreme Court freed states to legalise gambling on individual sporting events, unleashing what will be a race to attract billions of dollars in wagers and heralding a new era for the nation's sports leagues.
The justices on Monday struck down the federal law that had barred single-game gambling in most of the country, saying it unconstitutionally forced states to maintain their prohibitions. Nevada has been the only state with legal single-game wagering.
Sports gambling could begin in a matter of weeks in casinos and racetracks in New Jersey, which instigated the legal fight by repealing its gambling ban. Mississippi, Pennsylvania, New York, Delaware and West Virginia could follow soon, and the number of states might reach double digits by the end of the year.
Shares of casino operators and their suppliers jumped on the news. Scientific Games, a slot machine maker that also processes bets for sports book operators, rose 9.8pc, while Caesars Entertainment, the largest US casino operator, rose 6.3pc.
MGM Resorts International, the largest owner of casinos on the Las Vegas Strip, rose 6.3pc.
Some of the biggest gains were seen by non-US betting parlour and online operators that have already been taking wagers on sports in other countries.
At one stage yesterday, Paddy Power Betfair shares were up 10.5pc. William Hill Plc, one of the UK's largest betting-shop operators, rose 5.6pc. William Hill operates the largest number of sports books in Nevada. Stars Group, a Canadian company that operates the PokerStars brand, saw a 12pc gain.
Americans place $150bn (€125bn) a year in illegal sports bets, according to the casino-backed American Gaming Association. The research firm Eilers & Krejcik Gaming puts the number at $50bn to $60bn, not counting bets among friends.
Sports leagues fought New Jersey in court even while moving toward embracing legalised wagering. In January, a National Basketball Association executive told New York lawmakers the leagues should get 1pc of all bets. The NBA says it would prefer a new federal law to set nationwide standards.
New Jersey had been trying to legalise sports gambling in its casinos for years, starting with a 2012 law that explicitly authorized wagering. Federal courts struck down that measure as violating the 1992 Professional and Amateur Sport Protection Act, or PASPA. That law says states other than Nevada may not "sponsor, operate, advertise, promote, license or authorise by law or compact" a sports-gambling system.
The Supreme Court vote was 6-3 to strike down the entire federal prohibition. The majority said PASPA violated the Constitution's 10th Amendment by "commandeering" the states' regulatory power.
Former New Jersey Governor Chris Christie, who led the legal fight to legalise gambling, tweeted that "New Jersey citizens wanted sports gambling and the federal Gov't had no right to tell them no." (Bloomberg)