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US Supreme Court allows states to regulate sports betting, will this decision have a ripple effect in India?



On 14th May, 2018, the US Supreme Court in a majority verdict in Murphy (Governor of New Jersey) v. National Collegiate Athletic Association invalidated the Professional and Amateur Sports Protection Act, 1992 (PASPA), a federal legislation that disallowed states to promote, operate, license, authorise or sponsor sports betting.

The law barred all states from permitting sports betting, but granted exemptions to four states that already permitted some form of sports betting before passage of the law to continue those offerings, was invalidated by the Supreme Court on the grounds that it violated the ‘anti-commandeering’ principle, that prevents the Congress from issuing direct orders to the states.

The invalidation of PASPA after years of litigation, on the grounds of violation of principles of the federal structure envisaged by the American constitution has generated considerable excitement in the gaming industry. In fact, it would not be incorrect to say that the historic decision will have a major impact on the global gaming industry.

News reports indicate that apart from the state of New Jersey (which was the petitioner in this case), ten or more other states are looking to immediately pass legislations to regulate, license and tax sports betting. Experts believe that more than thirty states could regulate and license the activity in the next four or five years.

While it is best to leave the those having expertise in American constitutional law and jurisprudence to analyse the judgment and its implications in detail, it would be worthwhile to examine whether the order would have any implications on the move to get sports betting legalised in India.

The Indian constitution is a quasi-federal one, with the centre enjoying a stronger role vis-a-vis states. The Indian constitution does not follow the strict federal model envisaged by the founding fathers of the United States of America and thus the anti-commandeering principle may not have much relevance here. Further, unlike the American constitution, the subjects which the parliament and state legislatures can regulate are well enumerated in the seventh schedule of the Indian constitution.

Under entry 34 of the state list, it is clear that state legislatures have the power to regulate gambling and betting activities.  However, parliament is given the power to legislate on state subjects in certain circumstances, i.e. if two or more state legislatures specifically request it to do so or in pursuance of an International treaties or if it is required to be done for a limited period of time in national interest.

Arguably, the centre could use its powers to legislate on inter-state trade and commerce (entry 42) or communication (entry 31) to at least regulate or ban online sports betting. The Law Commission of India has been examining the issue for over a year and a half now, and it is unclear whether and when it will come out with its recommendations.

The Supreme Court has also admitted a petition filed by one Geeta Rani more than a year ago, which urges the court to issue directions to the central and state governments to regulate sports betting.

Despite all the brouhaha over legalisation of sports betting, the decision of the US Supreme Court may just bolster the case for the Law Commission and the central government to shy away from taking any decision on the contentious issue and leave it to individual states to decide their policy.

Given the complex socio-economic conditions and various other challenges in governance, state governments in India would not be in a hurry to emulate their US counterparts by rushing to pass legislation on sports betting.  In spite of the path-breaking US Supreme Court judgment and move by various American states to legalise betting, the debate on sports betting legalisation is unlikely to gain momentum in India just yet.

Jay has researched extensively on gaming laws and has been cited by various media houses and journals as an expert. He has helped leading newspapers in their stories on gaming laws. Jay completed his B.A. LL.B. (Hons.) degree from NUJS, Kolkata in 2015 and is currently based out of Mumbai.