US Supreme Court lifts ban on sports betting: What does this imply for EU gaming operators?

On 13 May the U.S. Supreme Court lifted a federal ban on sports betting, declaring that a 1992 statute banning this activity was unconstitutional and subjected state legislatures to the direct control of Congress in violation of the 10^th amendment.

This decision means that, from this point forward, every state in the Union will be free to act unilaterally in the regulation of sports betting and legalise the activity as it chooses. This decision did not come as a complete surprise and was welcomed by a number of States that are poised and ready to repeal their betting bans over the next few months. Others have openly declared that they will shortly start exploring the possibility of sanctioning betting within their borders.

This development, which essentially means that the U.S. could potentially become one of the largest new markets for sports betting worldwide, has predictably sent ripples throughout the global gaming industry. Could this really be the game-changer many are portraying it to be, and does this hold any implications for the Maltese gaming sector?

First of all, we have to be clear on exactly how this decision will play out, particularly in terms of how widely and quickly it will affect the global market. This was not, as some may think, a decision that will legalise sports betting across the US more or less overnight. It is, rather, a decision that permits individual States to legislate accordingly should they wish to. As mentioned above, eight states have indicated their readiness to do so in the relatively short-term, while a further twelve have expressed an interest in exploring the matter further. Changes, therefore, will be gradual and cumulative rather than immediate.

This allows us time to achieve perspective and plan effectively for the potential risks and opportunities that this key U.S. decision brings with it.

There is no denying that any opening up of the U.S. market is good news for European gaming operators, not least those operating from Malta, since it provides a large new market to tap into that has long been off-limits.  The Hon. Silvio Schembri, Parliamentary Secretary for the Digital Economy, in fact commented that “The US Supreme Court’s decision to overturn a federal ban enshrined in the 1992 Professional and Amateur Sports Protection Act (PASPA), could lead to the creation of one of the world’s largest markets, and EU gaming operators will surely be at the forefront to explore opportunities.”

It would appear therefore that at this early stage it would be sensible to greet this recent decision as a potential growth opportunity and to keep it firmly on our radar. As developments unfold, however, the best approach would be to monitor developments very closely, particularly in terms of the regulatory framework that will accompany any legalisation that is introduced.