Editor’s note: The U.S. Supreme Court on May 14, 2018, issued a ruling that potentially makes commercial sports betting possible. “The Supreme Court on Monday struck down a federal law that effectively banned commercial sports betting in most states, boosting the prospect of such gambling across the nation.”
There is a strong possibility that sports betting will be legalized in the United States. Just like any other avenue of gambling, there are lots of risks and rewards associated with its legalization.
The sports betting industry is a massive one in the U.S. even though it is illegal in 46 states. Only in the states of Nevada, Montana, Oregon and Delaware can you legally bet on sports games. Despite this, according to a working paper written by the department of economics at West Virginia University, the American Gaming Association projected that $2 billion would be legally bet on American football games in 2016. According to the same report, the association projected that $88 billion would be illegally bet on the sport in the same calendar year.
That is not exactly chump change, people.
As there are many states fighting for the legalization of this specific type of gambling, the Supreme Court could stop them in their tracks if they rule to keep the Professional and Amateur Sports Protection Act of 1992 in tact.
The Act came about in 1991, as the Senate Judiciary Subcommittee on Patents, Copyrights and Trademarks believed that it was a national problem. Former NBA commissioner David Stern also agreed with this sentiment, saying that “the harms it inflicts are felt beyond the borders of those states that sanction it”
There have been many cases in history where the temptation of legalized sports betting was too much for players, coaches and referees to handle. The earliest case in American sports history was in 1919 with the Black Sox Scandal. The Chicago White Sox intentionally lost the World Series to the Cincinnati Reds in exchange for money.
Would be Hall of Famer Pete Rose would be in Cooperstown among the greats of baseball if it wasn’t for his gambling ways. Rose was banned from baseball after it was discovered that he would bet on games that he managed in, as well as games he played in during his career.
Former NBA referee Tim Donaghy served prison time for receiving money from a pro gambler on games that he worked. This was one of the uglier scandals in pro sports this century.
Former pro baseball player and current Cabrini University head baseball coach Nick Weisheipl talked about the dangers legalizing sports betting could bring to players, both at the pro and collegiate level.
“The potential negative outcomes far outweigh the recognition [the participants] may or may not receive,” Weisheipl said. “Gambling addiction, point shaving scandals, gateway into criminal activity, etc., are all too common and detrimental to legalize gambling on sports by collegiate athletes and coaches.”
There are others that would like legalized sports betting to be brought back to the forefront, including current NBA commissioner Adam Silver.
Silver has been on the record as a sports gambling supporter many times since becoming the league’s commissioner in 2014.
Silver admitted back in 2017 that he “sensed” that sports betting’s legalization was on the horizon, and that it would be good for the fans’ engagement with the sport. The commissioner wrote more about this in an op-ed in the New York Times in 2014.
According to Bloomberg, the NBA would like a one percent cut of all bets placed on their sport while the casino lobby disagrees entirely. Perhaps this is one of the reasons a Supreme Court decision has not been reached just yet.
The Players Associations of the four major North American sports leagues (MLB, NHL, NFL and NBA) made a joint statement on April 12, stating that if sports betting is trending towards being legalized that their players should at least be involved in the decision making process.
Eric Malm, the Chair and Associate Professor of Economics & Business Management at Cabrini, discussed two possible scenarios of how legalized sports betting could affect the nation’s economy.
“First, consider the legalization of pot in states like Colorado,” Malm said. “In that case the state has legalized something that was formerly illegal, allowed private companies to sell the product, and then collects tax on sales. Following this model, the state could allow different types of sports betting games/parlors/websites to be run by private companies and the state could tax the activity. This would likely result in the growth of new businesses, as well as an increase in tax revenues.”
The second possibility Malm mentioned was reminiscent of how state lotteries are run.
“In this case, the state runs the activity and uses the revenue for specific purposes (for PA, to fund programs for seniors),” Malm said.
The American Gaming Association made three interesting points in its testimony to the New York Senate Standing Committee on Racing, Gaming and Wagering about why states should have the option to legalize sports betting.
- Will we shut down the vast illegal sports betting market in the United States, which takes in $150 billion in bets per year? Or will we let it continue to thrive, fuel criminal activity and leave consumers with no safe alternative to bet?
- Will we empower states and tribes to choose for themselves whether to offer legal, regulated wagering on sports? Or will we let the federal government unconstitutionally tell states and tribal sovereign governments they can’t do so?
- Will we work together to share information, create transparency and protect the integrity of the games we all love? Or will we continue to jeopardize the integrity of games by forcing bets to take place in an unregulated market with no transparency?
It is uncertain how the government will regulate sports betting if and when PASPA is revoked. Jim Murren, the CEO of MGM Resorts International, seems to be pretty confident that the Supreme Court will get something done to ensure a solution to the ban, as he told LegalSportsReport.com that his company would take advantage of the law’s passing.
Some make the argument that illegal sports betting is already too readily available because of the internet that a legalization wouldn’t serve any more tempting to players/coaches/etc. than the current state of the industry does. Perhaps this season was a test run for athletes, as the first pro sports team to call Las Vegas their home, the Las Vegas Golden Knights of the NHL, joined the league this year. The Oakland Raiders are moving to Vegas in two years as well.
The sports landscape is rapidly changing and the rules of sports betting may be changing along with them in the coming months.