From Preemption to Prohibition: How Murphy v. NCAA Changed the Odds on National Regulatory Power

In 1992, Congress passed the Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. §§ 3701-3704, which prohibited state-sanctioned sports gambling. Included in § 3704(a)(3) was an exception that would permit state-sanctioned sports gambling if the state enacted a sports gambling scheme within a year of PASPA’s passage and had a casino sports gaming scheme in the ten-year period preceding the enactment of PASPA [1]. Failing to seize this opportunity, New Jersey did not pass a sports gambling act until voters approved a State Constitution Amendment to legalize sports betting in 2011 [2]. In 2012, the legislature passed the Sports Wagering Act (“2012 Act”) [3]. The 2012 Act permitted state-sanctioned sports betting in New Jersey [4]. However, in 2014, the NCAA and three professional sports leagues sued New Jersey’s Governor and other state officials on the grounds that the 2012 Act violated PASPA [5]. In doing so, the leagues sought to preserve the integrity of intercollegiate sports and avoid gambling-related corruption [6]. The leagues brought the case to the New Jersey district court, where they received a favorable ruling. This decision was affirmed by the Third Circuit and Third Circuit en banc [7]. The Governor of New Jersey at the time, Philip Murphy, petitioned the Supreme Court and argued that PASPA was unconstitutional under the Tenth Amendment’s anti-commandeering doctrine, which prevents the federal government from forcing state legislatures to enact legislation, in Murphy v. NCAA (2018) [8]. The Court ruled in favor of New Jersey, resulting in the legalization of state-sanctioned sports betting [9]. Since Murphy, sports betting has risen in popularity. In 2018, total revenue from sports betting was $0.43 billion. By 2024, it had risen to $13.78 billion [10]. Now, there are prediction markets that enable users to bet on events ranging from sports games to geopolitical events [11]. In ruling in favor of Murphy, the Supreme Court has placed the United States on a perilous trajectory that could lead to a restriction of federal power beyond the intent of the Constitution. As such, the pendulum representing the balance of federalism swings closer to the states. While safeguarding state sovereignty is a key element of the United States Constitution, explicit in the Tenth Amendment, the Murphy ruling significantly reduces the federal government’s enumerated power to regulate interstate commerce, as online sports betting can traverse state lines. If this trajectory continues, the enforceability of the enumerated powers may shrink beyond the intent of the Constitution.
The Murphy decision limits the federal government’s enumerated powers established by the Interstate Commerce Clause, and thus signals further progression in recent Supreme Court precedent that seeks to impose restrictions on the applicability and interpretation of federal regulation of interstate commerce set forth in Article I, Section 8, Clause 3 of the United States Constitution. The Interstate Commerce Clause enables Congress to regulate commerce among states [12]. Since PASPA was directed at state-sanctioned sports betting, the debate regarding its constitutionality revolves around the principles laid forth in the Interstate Commerce Clause. Historically, the Supreme Court granted Congress a wide berth in regulating commerce throughout the 1800s and most of the 1900s. In Gibbons v. Ogden (1824), the Court established that the federal government possessed the authority to broadly regulate interstate commerce, including navigation on waterways [13]. The Gibbons decision expanded the scope of commerce beyond merely buying and selling goods and services. The Court’s expansionary interpretation of interstate commerce continued into the 1900s with United States v. Darby (1941). This case reversed earlier limits on federal power and upheld federal minimum wage and maximum hours laws [14]. More generally, this decision granted Congress power to regulate intrastate activity that was deemed to substantially impact interstate commerce. Darby marked a tremendous increase in Congress’ power to legislate commerce, as it nullified previous attempts to restrict federal authority and provided a framework for Congress to intervene in intrastate economic activity.
United States v. Lopez (1995) was the first Supreme Court ruling in approximately 60 years to impose restrictions on the Interstate Commerce Clause [15]. The Court ruled that Congress could not utilize the Interstate Commerce Clause to regulate the possession of firearms in school zones, finding that the possession of firearms could not be classified as economic activity that impacted interstate commerce [16]. Now, Murphy continues to solidify the boundaries of Congress’ authority to act under the Interstate Commerce Clause.
Murphy also has implications for the preemption of federal laws, which occurs when federal laws come into conflict with state laws. The federal government requires the authority to influence state legislation by extension of passing legislation that affects the entire country. This necessity is expressed in James Madison’s Federalist Paper No. 39 [17]. While Federalist Paper No. 39 does not serve as a legally binding document, its ideas are integrated throughout the Constitution and therefore bear importance. This foundational document explains that federal authority comes from the people, albeit indirectly. Thus, the government has authority because its laws impact individuals — not just states — and its segments are elected either directly or indirectly by the people [18]. In other words, since the people influence the selection of the members of the federal government, it can therefore pass legislation that impacts the people. By delineating federal and state legislative powers, the paper most notably protects state legislatures from overextension of federal powers. However, it is also structured to defend the legislative capacity of the federal government by clearly outlining the actions it is permitted to take without state interference [19]. Murphy is one link in a growing chain of Supreme Court cases that restrain the legislative freedoms previously bestowed upon the federal government.
Not only does the Murphy ruling contradict the sentiments expressed in Federalist No. 39, it also threatens to reverse precedent that serves as the foundation of the influence of the Supremacy Clause in Article VI, Clause 2 of the United States Constitution. The Supremacy Clause ensures that federal laws supercede state laws when they come into conflict [20]. The Murphy ruling threatens this hierarchy by granting states unlimited reign over sports betting legislation despite contradictory federal laws. Additionally, there are a plethora of landmark cases in which the Supremacy Clause was cited to defend federal laws and actions. For instance, there is McCulloch v. Maryland (1819), in which Chief Justice John Marshall ruled that Maryland could not tax the federally chartered Bank of the United States because the taxation would inhibit the powers of the federal government by opening the door to states destroying its creation of a national bank [21]. In Cooper v. Aaron (1958), the Court held that the state of Arkansas could not delay desegregation of schools for 30 months as it violated the ruling in Brown v. Board of Education (1954) [22]. This case expanded the interpretation of the Supremacy Clause to hold that both the Constitution and Supreme Court rulings were supreme over state actions [23]. While the Supremacy Clause and federal preemption are restricted in applicability to cases in which a federal law is contradicted by state laws or actions, it is still an important consideration in Murphy because the legality of New Jersey’s gambling law with respect to PASPA, a federal law, was being challenged.
It has been argued that Congress’ passage of PASPA did not flow from an enumerated power and therefore infringed upon states’ right to pass legislation without force from the federal government. By this reasoning, PASPA was an invalid federal law and thus is not protected by the Supremacy Clause, which only declares the Constitution and federal laws made in accordance with the Constitution to be supreme pursuant to Article VI, Clause 2 of the Constitution [24]. However, by deeming PASPA to be in violation of the Constitution, the Supreme Court limits the applicability of the Interstate Commerce Clause. In the Murphy decision, Justice Alito, writing for the majority, acknowledges the Interstate Commerce Clause, but grounds his opinion on the principle that the federal government cannot commandeer which laws states pass [25]. The Court’s ruling in Murphy was justified largely by opining that prohibiting state actions is synonymous with forcing states to enact a law and thus violates the anti-commandeering doctrine, which states that powers not specifically delegated to the federal government are reserved for the states and cannot be infringed upon [26]. Justice Alito argued that the government can pass laws that impact individuals, but not states [27]. This jeopardizes rulings, such as those in McCulloch v. Maryland and Cooper v. Aaron, that specifically establish the actions that states are able to take with respect to the federal government’s actions, as opposed to outlining permissible actions of individuals [28]. Thus, it can be argued that this decision does not have any bearing on the breadth of federal powers protected by the Interstate Commerce Clause. However, as a result of Alito’s decision, the Supreme Court clearly delineates a hierarchy between the anti-commandeering doctrine and the Interstate Commerce Clause, whereby the latter is superseded by the former. This relationship threatens the enforceability of the Interstate Commerce Clause because it establishes that the federal government cannot require states to pass or repeal laws to protect federal authority over commercial activities that cross state lines.
As the rise of prediction markets continues to influence how people view events in terms of odds and payoffs, it is important to consider the judicial context that paved the way for state regulation of betting on events like sports. The Murphy decision, in granting states the power to establish and regulate sports betting regimes, stands to impact the United States way beyond the integrity of intercollegiate sports. The ruling imposes a statutory hierarchy that places greater importance on the anti-commandeering principle than the Interstate Commerce Clause. Thus, the federal government has been placed on a path that could lead to reduction of its enumerated power over commerce between states.
[1] Professional and Amateur Sports Protection Act, 28 U.S.C. §§ 3701–3704 (1992) (repealed 2018).
[2] Murphy v. National Collegiate Athletic Ass’n, 584 U.S. 453 (2018).
[3] Ibid.
[4] N.J. Stat. Ann. §§ 5:12A-1 to -7 (West 2012).
[5] Murphy, 584 U.S. at 453.
[6] Staff Editor. 2019. “Murphy v. NCAA: The Fall of PASPA and the Rise of Sports Gambling,” NYU Journal of Intellectual Property & Entertainment Law Blog. https://jipel.law.nyu.edu/murphy-v-ncaa-the-fall-of-paspa-and-the-rise-of-sports-gambling/
[7] Murphy v. National Collegiate Athletic Association, 584 U.S. ___ (2018)
[8] U.S. Const. amend. X.
[9] Murphy, 584 U.S. at 453.
[10] Statista, “Total Sports Betting Revenue in the United States from 2018 to 2024 (in Billion U.S. Dollars),” Accessed February 22, 2026, https://www.statista.com/statistics/1126480/sports-betting-revenue-us/.
[11] Corporate Finance Institute, “Prediction Market,” accessed February 22, 2026, https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/prediction-market/.
[12] U.S. Const. art. I, § 8, cl. 3.
[13] Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824).
[14] United States v. Darby, 312 U.S. 100 (1941).
[15] United States v. Lopez, 514 U.S. 549 (1995).
[16] Ibid.
[17] James Madison, “Federalist No. 39,” in The Federalist Papers, ed. Clinton Rossiter (New York: Signet Classics, 2003), 241–45.
[18] Ibid.
[19] Ibid.
[20] U.S. Const. art. VI, cl. 2.
[21] McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819).
[22] Cooper v. Aaron, 358 U.S. 1 (1958).
[23] Ibid.
[24] U.S. Const. art. VI, cl. 2.
[25] Murphy, 584 U.S. at 453.
[26] Ibid.
[27] Ibid.
[28] McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316; Cooper v. Aaron, 358 U.S. 1.