Ethics CasesSport

Cases · U.S. federal and state law / NCAA / pro leagues · 1992–present

Murphy v. NCAA: Legalized Sports Betting and Its Consequences

For 25 years, the Professional and Amateur Sports Protection Act (PASPA) barred most states from authorizing sports betting. New Jersey challenged the law, and on May 14, 2018, the Supreme Court in Murphy v. NCAA struck it down as unconstitutional commandeering of states. Legal betting spread rapidly across the country, and the professional leagues, which had sued to stop New Jersey, signed lucrative partnerships with sportsbooks. The change brought tax revenue and consumer protections, but also concerns about gambling addiction, saturation advertising, harassment of athletes, and new integrity risks. This dilemma-style case asks who should bear the costs of a legal betting industry, and how sport should manage its own conflicts of interest.

By Tanner Simkins, editor

Timeline

  1. Congress passes PASPA, banning state-authorized sports betting, with exemptions for Nevada and a few other states.
  2. New Jersey voters approve a constitutional amendment to permit sports betting.
  3. The NCAA, NFL, NBA, NHL, and MLB sue to stop New Jersey; the state loses in the lower courts.
  4. The Supreme Court hears argument in Christie v. NCAA (renamed Murphy v. NCAA after a new governor took office).
  5. The Court strikes down PASPA as violating the Tenth Amendment's anti-commandeering principle.
  6. States legalize retail and online betting; leagues and teams sign sportsbook sponsorships; betting scandals and harassment of athletes rise in prominence.

The ethical issues

  • Federalism and liberty: states' and adults' right to choose vs. national uniformity.
  • Public health: problem gambling, especially among young men, with easy mobile access.
  • Leagues' conflicts of interest: profiting from betting while policing integrity.
  • Advertising saturation: broadcasts filled with betting promotions and odds.
  • Athlete welfare: abuse from bettors and new pressures on players, referees, and college athletes.

Stakeholders

StakeholderInterests & obligations
States and taxpayersTax revenue; responsibility for regulation and treatment of addiction.
Professional leagues and teamsNew revenue and fan engagement; integrity obligations.
NCAA and college athletesExposure to bettor harassment and approaches; lower pay and protections than pros.
Sportsbooks and data companiesMarket access and profits; duties to detect suspicious betting and protect customers.
Bettors and their familiesEntertainment vs. financial harm and addiction.
Public-health advocatesPrevention, treatment, and advertising limits.

The case

In 1992, Congress passed the Professional and Amateur Sports Protection Act (PASPA). It did not make sports betting a federal crime. Instead it prohibited states from “sponsor[ing], operat[ing], advertis[ing], promot[ing], licens[ing], or authoriz[ing]” it, with exemptions for states that already had some legal sports wagering, chiefly Nevada.[1] The professional leagues and the NCAA had long opposed legalization. PASPA’s proponents argued that it would protect young people, and one of its sponsors, Senator Bill Bradley of New Jersey, a former college and professional basketball star, stressed that it was needed to safeguard the integrity of sports. The Department of Justice opposed the bill.[2] The law exempted Nevada, Oregon and Delaware, and gave New Jersey a year to enact its own exception, which it did not do.[3]

New Jersey, seeking to revive Atlantic City’s casinos and racetracks, decided to fight. Voters approved sports betting in 2011, with 64 percent in favor of a constitutional amendment, and the legislature passed the Sports Wagering Act in 2012.[3] When the state moved to license it, the NCAA and the four major professional leagues sued, and Governor Chris Christie told reporters, “Let them try to stop us.”[5] New Jersey lost in the lower courts, then tried a different route: repealing its own prohibitions for casinos and tracks. The leagues sued again and won again in the lower courts.[4]

Background

Christie had not started as a champion of the cause. At first he opposed legislation because he believed the federal ban would be hard to get around. He later changed his mind, and a bill sponsored by state senator Raymond Lesniak was signed into law within five weeks.[1] In August 2012, the NBA, NFL, NHL, MLB and NCAA sued under PASPA to block that law, later joined by the U.S. Justice Department. The case was known as Christie I.[1] After losing, New Jersey repealed parts of its own prohibitions in 2014. Both the district court and the Third Circuit treated that partial repeal as an authorization that still violated PASPA.[1]

The rules and governance

The constitutional question was about the structure of government, not gambling. The anti-commandeering principle, developed in New York v. United States and Printz v. United States, bars Congress from ordering state legislatures to enact or refrain from enacting laws.[1][2] Alito rejected the argument that PASPA was a valid preemption of state law, because it did not regulate private actors at all. He also rejected the idea that a prohibition on states was different from a command, calling it “happenstance” that earlier cases involved orders to act.[1]

The justices divided on the remedy. Six held that the unconstitutional provision could not be severed, so the whole law fell. Justice Breyer agreed the provision was invalid but would have kept the rest.[1] Justice Ruth Bader Ginsburg, joined by Justice Sonia Sotomayor and in part by Breyer, dissented, calling the decision to strike all of PASPA excessive.[1] Alito’s opinion left the next move to Congress: “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”[1][2]

The Supreme Court rules

The Supreme Court took the case. The question presented was whether a federal law that “prohibits modification or repeal of state-law prohibitions on private conduct impermissibly commandeer[s] the regulatory power of States.”[3] New Jersey argued that requiring states to keep prohibitions in place was as harmful to federalism as requiring them to act. The leagues argued that PASPA validly preempted state law, and that the rest of the statute should survive even if the authorization ban fell.[3] On May 14, 2018, in Murphy v. NCAA, it ruled for New Jersey. Writing for the majority, Justice Samuel Alito held that PASPA violated the “anti-commandeering” principle of the Tenth Amendment: Congress can regulate sports betting directly, but it cannot dictate what state legislatures may or may not authorize. Seven justices agreed that the provision was unconstitutional; six agreed that the entire law had to fall.[1][2]

The Court emphasized that it was not deciding whether sports betting was good policy. “The legalization of sports gambling is a controversial subject,” Alito wrote. “Supporters argue that legalization will produce revenue for the States and critically weaken illegal sports betting operations, which are often run by organized crime. Opponents contend that legalizing sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports.” The choice, he wrote, “is not ours to make.”[2] Ginsburg’s dissent said there was “no cause to deploy a wrecking ball destroying” the whole statute. She would have kept PASPA’s separate bans on states themselves sponsoring or operating betting schemes and on private parties running them under state law.[2]

A transformed landscape

The leagues had begun to shift before the ruling. In 2012, the first federal judge in the case found “an undisputed direct link between legalized gambling and harm to the Leagues.”[4] But in November 2014, NBA commissioner Adam Silver wrote in The New York Times calling on Congress to create a federal framework that would let states legalize and regulate sports betting, days after the NBA announced an equity stake in the daily fantasy operator FanDuel.[4] Eighteen states and three governors filed a brief supporting New Jersey in 2017. By early 2018 the NBA and Major League Baseball were lobbying state legislatures for betting bills, with the leagues still in court against New Jersey.[4] New Jersey moved quickly after the ruling. Governor Phil Murphy signed legislation on June 11, 2018, and Monmouth Park and the Borgata casino in Atlantic City took their first bets on June 14.[4] The concerns Alito listed did not go away. NCAA President Charlie Baker later urged states with legal wagering to ban prop bets on college athletes.[6]

Aftermath

Several states had already prepared laws to take effect if New Jersey won. By June 5, 2018, Delaware became the first state other than Nevada to offer legal sports betting after the ruling.[1] By 2026, 27 states had legalized online sports betting.[1]

The core dilemma

Murphy settled the constitutional question but left the moral and policy questions to states and to sport itself. How should states and leagues balance personal liberty, tax revenue, and fan engagement against public-health harms and threats to integrity? And can leagues that profit from betting be trusted to police it?

Competing values

  • Liberty vs. paternalism: adults’ freedom to gamble vs. protecting vulnerable people from harm.
  • Federalism vs. national standards: states’ freedom to experiment vs. a patchwork of rules across a national market.
  • Revenue vs. integrity: new money for leagues and states vs. new incentives for corruption.
  • Engagement vs. exploitation: betting can deepen fan interest, or can monetize addiction.

Strongest arguments

For legalization as it unfolded: betting happened anyway, illegally and offshore. Legal markets protect consumers, raise revenue, and expose corruption through monitoring. Adults should be free to make their own choices.

For tighter limits: legal mobile betting has made gambling more accessible and aggressive than any illegal market did. Leagues’ partnerships compromise their role as guardians of integrity, and the costs fall on vulnerable bettors, families, and young athletes.

Applying the frameworks

Utilitarian

Consequentialists weigh tax revenue, consumer protection and the shift from illegal to regulated markets against increased gambling harm, advertising saturation, and new risks to the integrity of games. The lens supports regulation designed by evidence, such as limits on prop bets and advertising, rather than treating legalization itself as the decisive choice.

Kantian (duty)

A Kantian lens asks whether leagues that profit from betting partnerships can consistently demand integrity from players while promoting gambling to fans. It also emphasizes duties to avoid exploiting vulnerable people, including young fans and athletes subjected to abuse by bettors.

Justice

A justice lens asks who bears the costs and who gains. States, leagues and sportsbooks share the revenue, while problem gambling and harassment fall on individuals, often young men and college athletes. It also examines federalism: whether a state-by-state system provides fair and equal protection.

Walk it through: the Simple Decision Model

  1. Spot the issue. You are a state legislator in 2019 drafting a sports betting law after Murphy. The stakeholders include residents, problem gamblers, sportsbooks, leagues, colleges, college athletes and the state treasury. The codes in play are federal law, state gaming law and the integrity rules of sports bodies.
  2. Gather facts. What evidence is there on gambling harm, illegal market size and revenue? What do colleges and leagues ask for?
  3. Test options. Options: (a) a broad law with online and prop betting; (b) a narrower law with limits on college props and advertising; (c) no legalization. Weigh revenue and consumer choice against harm and integrity.
  4. Check codes and law. Are industry lobbying and revenue projections shaping your view more than evidence? Would the law protect the most vulnerable?
  5. Decide and document. Record your analysis and the reasons for each restriction.
  6. Communicate and follow up. Communicate the law’s purpose and protections to the public, and require data reporting so the law can be reviewed.

What’s settled and what’s contested

  • Settled: PASPA is unconstitutional; states may authorize sports betting; Congress may still regulate it directly.
  • Contested: the scale of gambling harms; the right advertising and product limits (such as prop bets); whether leagues’ financial ties to betting compromise integrity.

Why this case matters

Murphy reshaped the economics of American sport. Every league, college, and team now has to manage a relationship with betting, which makes this case a necessary foundation for the gambling cases that follow.

Key terms

Integrity
A commitment to honesty and ethical principle in competition and administration, including when nobody is watching.
Commercialization
The process of turning sport into a product and a business enterprise, with profit pressures that can compete with principle.
Controls
Concrete safeguards that make ethics operational: training, disclosure forms, testing, monitoring, hotlines. Ethics needs principles, process and controls.
Trust
The public’s belief that what they are watching is real. Integrity failures are ultimately failures of trust.

Definitions from the Ethics Cases glossary.

Discussion questions

  1. Was the Supreme Court's ruling a victory for liberty and federalism, or did it remove an important public-health protection? Can it be both?
  2. Is it ethical for leagues that once argued betting threatened integrity to now profit from sportsbook partnerships?
  3. Who should pay for the social costs of legal sports betting: bettors, sportsbooks, leagues, or taxpayers?
  4. Should betting on college athletes be treated differently from betting on professionals? Why?
  5. What limits on sports-betting advertising, if any, would you support? Justify them.

Sources

  1. Murphy v. National Collegiate Athletic Association — Wikipedia
  2. Murphy v. NCAA, 584 U.S. 453 (2018) — opinion text — Legal Information Institute, Cornell Law School
  3. Christie v. National Collegiate Athletic Association (cert. summary) — Legal Information Institute, Cornell Law School
  4. The odds of legalized sports betting: New Jersey vs. the leagues — ESPN
  5. N.J. Gov. Chris Christie: 'Let them try to stop us' from sports betting — CBS News
  6. NCAA President Charlie Baker urges states with legal wagering to ban prop bets on college athletes — Associated Press