As the Supreme Court weighs whether to hear a New Jersey challenge to the Professional and Amateur Sports Protection Act (“PAPSA”) – a 1992 federal law that banned sports wagering in all states where it was not already in existence – legislators in New York, Michigan, and South Carolina have introduced legislation seeking to legalize sports betting in their states.

 The New York bill seeks to amend the state constitution to exempt sports wagering from the New York’s existing gambling ban. The bill is sponsored by Senator Tony Avella (D-Queens), who recently announced that he will run for mayor of New York City this year, challenging sitting Mayor Bill de Blasio. South Carolina’s legislation would similarly amend the state constitution. Both states require that the public approve any amendments to the state constitution.

In Michigan, the proposed legislation would submit a referendum to the voters on whether to adopt sports gambling. The Michigan legislation also would require the population of any township or city where sports gambling would take place to approve it by a majority vote.

Even if these proposals become law, PAPSA remains firmly in the way of state efforts to legalize sports gambling. The Supreme Court is currently deciding whether to grant certiorari and hear a lawsuit brought by the State of New Jersey arguing that PAPSA’s preemption of state attempts to legalize sports gambling is unconstitutional. The Court recently invited the Acting U.S. Solicitor General to weigh in on the case on behalf of the federal government.

Until the Supreme Court acts, any state action to legalize sports gambling would likely be struck down if challenged based upon the Third Circuit Court of Appeals en banc 10-to-2 decision in the New Jersey case, which held that PAPSA preempts states from legalizing sports gambling.

Takeaway: Although we should not read too deeply into the early days of state legislative sessions, it appears there is momentum among the states to upend the status quo on sports gaming. The introduction of sports gaming beyond Nevada would present new opportunities in the advertising space as states attempt to boost their economic fortunes by cutting into the Nevada monopoly on American sports gaming revenue.