The core holding was this

> "congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own."

You have it backwards. Murphy v NCAA ruled that the federal legislation banning sports betting was unconstitutional, and that it was up to the states to regulate gambling.

No, the SC said the federal government can't outright ban sports betting. The logic was that a ban interferes with states right to legalize sports betting.

(To be clear, it is still an nonsensical decision though. Congress does still have the power to regular gambling under the interstate commerce clause, just not outright ban it)