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US readies for legalised sports betting

Lawrence Hurley

The US Supreme Court's striking down of a 1992 federal law that barred sports betting it in most places is setting off a rush by businesses and states to cash in on an expected multibillion-dollar jackpot.

The justices endorsed New Jersey's bid to allow such wagering in a ruling that ushers in a new era for the leading US sports leagues, which had sued to block the state's sports gambling law and called such betting a threat to the integrity of competition, fearing game-fixing and other types of cheating.

In a ruling that sent shares in gaming companies and casinos soaring, the court voided the federal Professional and Amateur Sports Protection Act and upheld the legality of a 2014 state law permitting sports betting at New Jersey casinos and horse racetracks.

Some states see sports betting, like lotteries, as a potentially lucrative source of tax revenue. The American Gaming Association estimates there is currently a $US150 billion-a-year illegal sports-betting market.

The ruling takes the United States a step closer to legal sports betting in numerous states, perhaps nationwide, rather than just in select places such as Nevada, home to the gambling capital Las Vegas.

The 1992 law had effectively prohibited sports gambling in all states except Nevada and, to a limited extent, Delaware, Montana and Oregon.

"New Jersey has long been the lead advocate in fighting this inherently unequal law, and today's ruling will finally allow for authorised facilities in New Jersey to take the same bets that are legal in other states in our country," New Jersey Governor Phil Murphy, a Democrat, said in a statement.

The ruling adds to a decades-long trend of decreased restrictions on various types of gambling in the United States.

The news ignited a rally in gaming stocks, sending several to record highs. Those specialising in gambling technology gained 10 per cent or more.

The US subsidiary of British sports betting operator William Hill, which has already been working with state officials in New Jersey on opening an outlet at Monmouth Park racetrack, is one of the companies hoping to capitalise.

The Supreme Court agreed with New Jersey's argument that the federal law infringed upon state sovereignty as laid out in the US Constitution by compelling states not to license or regulate sports betting.

The justices struck down the entire federal law on a 6-3 vote, with the court's five conservatives joined by liberal Elena Kagan. Lower courts had ruled against New Jersey's law.

"The legalisation of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own," Justice Samuel Alito wrote on behalf of the court.

Legal experts predicted that sports leagues and players' unions, as well as dozens of states, will seek a cut of the revenue from expanded sports gambling.

In addition to New Jersey, five other states - Connecticut, Mississippi, New York, Pennsylvania and West Virginia - already have sports betting laws in place that would allow them to move quickly, according to a Fitch Ratings report.

New Jersey's law, championed by Republican former Governor Chris Christie, was challenged in court by the National Football League, Major League Baseball, the National Basketball Association, the National Hockey League and the National Collegiate Athletic Association, the major governing body for intercollegiate sports.

The decision may prompt the US Congress to consider legislation to regulate sports betting nationally, a move the National Football League said it would welcome.

"Congress has long recognised the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events. Given that history, we intend to call on Congress again, this time to enact a core regulatory framework for legalised sports betting," the NFL said in a statement.

Republican Senator Orrin Hatch said he would introduce legislation to "establish fundamental standards for sports betting" and allow states to decide whether or not to legalise it.

Professional sports leagues have begun to shift their views regarding sports betting.

Las Vegas now has an NHL team and will soon have an NFL team, and the NBA's commissioner has called for legalising sports betting so it can be properly regulated.

Geoff Freeman, president of the American Gaming Association, said his group will work with states, sports leagues and law enforcement "to create a new regulatory environment that capitalises on this opportunity to engage fans and boost local economies."

Daily fantasy sports company DraftKings said it is weighing entering the sports betting business following the decision.

New Jersey's law allows people age 21 and above to bet on sports at New Jersey casinos and racetracks, but would ban wagers on college teams based in or playing in the state.