WASHINGTON — A case before the U.S. Supreme Court next month could overturn the federal law that bans sports gambling in most states, a ruling that could mean big bucks for Texas' economy — if Lone Star State officials expanded gambling.
The case, Christie vs. NCAA, stems from attempts by New Jersey to reform its sports betting laws and boost its casino and horse racing industries. But the state has been at odds with the Professional and Amateur Sports Protection Act, or PASPA, which barred states from enacting sports betting laws if they didn't already have them in place before the 1992 law passed.
Five major sports leagues, including the NCAA, NFL and NBA, sued New Jersey Gov. Chris Christie for the second time over 2014 legislation that allowed sports betting in casinos and racetracks. PASPA only carves out full-fledged sports betting for Nevada. That restriction has critics up in arms, arguing that the rest of the country is at a disadvantage for implementing their own gambling laws and the restrictions are fueling a multibillion-dollar illegal gambling industry.
Daniel Wallach, a Florida attorney and sports law expert, expects that if the court decides to rule on the constitutionally of PASPA, at least a dozen states will attempt to offer legal sports betting.
"I'm somewhat convinced change is afoot," Wallach said. "The question is how broad will that change be? Will it be changed on a narrow basis or will it be far-reaching change that will turn the industry on its head?"
But even if the court were to overturn the sports protection act in an opinion expected next year, Texas leaders haven't shown much interest in legalizing sports betting.
Texas' stance
Texas joined an amicus brief siding with New Jersey in favor of overturning the federal law, arguing that sports betting should be up to the states and not the federal government.
Attorney General Ken Paxton signed on to the brief, not to legalize sports betting, but to keep the federal government out of state decisions.
"PASPA is unconstitutional and tramples on state sovereignty," Paxton told the American Sports Betting Coalition. "By ending PASPA, states can rightfully decide whether they want regulated sports betting or not."
That means Paxton is on the opposite side of the debate from the White House. The U.S. solicitor general's office has sided with the sports leagues and will join them for the court's oral arguments Dec. 4.
But Paxton hasn't shown any signs of wanting sports betting to be legal in the Lone Star State. In fact, the attorney general has been at odds with daily fantasy sports sites for years.
In 2016, Paxton issued an opinion that deemed paid fantasy sports sites to be illegal gambling. Texas law defines gambling as a game with "partial chance" — one of the strictest definitions in the nation.
"Paid daily 'fantasy sports' operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law," Paxton said in a 2016 statement. "Simply put, it is prohibited gambling in Texas if you bet on the performance of a participant in a sporting event and the house takes a cut."
Paxton's office declined to comment on the Supreme Court case. A spokeswoman for his office said existing opinions and statements on fantasy sports speak for themselves.
The attorney general's opinion seemed to leave it up to the state Legislature, but attempts by lawmakers to legalize paid fantasy sports betting have failed.
State Rep. Richard Raymond, D-Laredo, sponsored legislation legalizing companies such as DraftKings and FanDuel. But the measure got stuck in Calendars Committee and didn't make it to the House floor. State lawmakers won't be back in session until 2019.
Fantasy sports don't have much at stake in the Supreme Court battle, said Geoff Freeman, CEO of the American Gaming Association.
"They are a very, very small component of what would amount to be sports betting at large," Freeman said. "Fantasy sports probably have the ban on sports betting to thank for the success they've had up until this point."
DraftKings and FanDuel, the leading fantasy sports sites, did not return requests for comment. Both companies have lobbied for state legislation that legalizes fantasy sports betting.
And Gov. Greg Abbott has shown little interest in sports betting and fantasy sports betting games.
In 2015, Abbott instructed state lottery officials to stop their efforts to gather information on expanding the agency's gaming portfolio. Texas Lottery Commission executive director Gary Grief and agency staff visited Delaware in October 2015 to learn about that state's lottery games, including sports betting, online wagering and casino games.
So don't expect to start throwing money down on the Cowboys yet. New Jersey's case will be slow moving, and if PASPA is repealed, it would be up to Texas lawmakers to determine whether to regulate sports betting.
"Texas faces a significant decision here," said Wallach, the sports law expert. "Do they want to be proactive or alternatively do they want to lag behind all the other first movers?"