Sports gambling is a multi-billion dollar industry in America today, but state and local governments, by and large, do not benefit in any way. The Professional and Amateur Sports Protection Act (PASPA), a 1992 federal law, restricts all but a handful of states from legalizing sports gambling. This has allowed a thriving shadow economy of mob-associated bookies and offshore websites to operate with virtual impunity. PASPA’s restrictions have not received much attention—until recently. The severity of the recent recession has forced state governments to get creative and find new sources of tax revenue, and many states have turned to sports gambling as a solution to raise additional revenues. Unfortunately, PASPA limits them from legalizing, regulating, and taxing the activity, which would enable state and local governments to enjoy millions of dollars in new tax revenue, job growth, and increased intrastate economic activity.
This Note explores the historical regulation of sports gambling in America and the forces that gave rise to PASPA. After analyzing the purported goals of PASPA in light of present conditions, this Note concludes that it is evident that PASPA has failed to accomplish those goals. PASPA supports a thriving shadow economy of illegal sports gambling providers, unfairly restricts the sovereignty and economic freedom of the states, and makes detecting athlete and referee bribery extremely difficult. Therefore, PASPA is a bad bet for the United States, and it should be repealed.