Supreme Court ruling opens door to widespread sports betting
At London’s Craven Cottage, home of the Fulham Football Club since the late 1800s, it’s as easy to place a wager as it is to buy a hot dog or a pint of beer.
Betting kiosks sit side-by-side with concessionaires, offering a multitude of odds on the game at hand (and, for that matter, other games in the English Football League Championship). A fan could very easily leave his seat to use the restroom, buy a Cumberland sausage sandwich, and drop a few quid on the home team to cover a one-goal spread in the second half—all within the halftime break.
Craven isn’t the only stadium in the United Kingdom and Europe to offer on-site betting; just about every other facility does, as well. In fact, many European football clubs are sponsored by gambling companies.
With Monday’s Supreme Court decision in favor of New Jersey, striking down the constitutionality of the federal Professional Amateur Sports Protection Act (PASPA), which essentially has prohibited sports betting in racetracks and casinos outside of Nevada, Montana, Delaware, and Oregon, which were grandfathered in, this image could become part of Americans’ daily sporting experience.
Of those four states, Nevada is the only one that has full-blown sports books currently.
[beauty_quote quote=' “This could be huge, but it also might not move the needle as much as some people are thinking and hoping it will." - Dave Schwartz, director of the center for gaming research at UNLV ']
The court’s 6-3 decision overruled the Third Circuit Court of Appeals, saying PASPA violates the state’s 10th Amendment rights, thereby creating a path for New Jersey and other states to offer sports betting.
“Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own,” wrote Justice Samuel A. Alito Jr., for the majority. “Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not.”
Now casino and sportsbook operators—as well as forward-thinking professional sports leagues—could finally get a piece of an illegal market that the American Gaming Association says is worth at least $150 billion.
The fight over legal sports betting certainly has been a saga.
PASPA, also known as the Bradley Act, became law in 1992, which means legal sports betting has been mostly illegal since then. New Jersey has been fighting for decades and has opposed the act on constitutional grounds. Specifically, state officials say the law flies in the face of the "anti-commandeering" rule of the 10th Amendment, which prevents Congress from forcing states to enforce federal regulations.
New Jersey officials aren’t the only ones fighting for sports betting. Garden State voters approved legalizing sports betting twice this decade, and former New Jersey Gov. Chris Christie signed a bill in 2014 trying to legalize it.
Every time the issue has been tested, however, the Department of Justice has pushed back and won.
According to David Clary, author of the 2017 book, Gangsters to Governors: The New Bosses of Gambling in America, this time could be different.
Clary says some states were so confident SCOTUS would rule in favor of New Jersey that they’ve rushed through legislation to legalize sports betting and have these bills waiting for approval as soon as the decision is rendered. Two states on this list: Pennsylvania and Connecticut. Missouri also has a bill waiting to be made into law.
“Depending on what the court says and where you live, you could have legalized sports betting in your state by Week 1 of the NFL season,” says Clary, who also is news editor at The San Diego Union-Tribune. “When you think about where we’ve been for the last few decades, that’s remarkable.”
Still, some experts wonder exactly how much money is at stake.
While various reports indicate the illegal sports betting market is worth upward of $150 billion, Dave Schwartz, director of the center for gaming research at UNLV, says the sports betting handle is relatively small in Nevada—sports books won $249 million on $4.9 billion in wagers during 2017—and may not be that much bigger outside the state.
“This could be huge, but it also might not move the needle as much as some people are thinking and hoping it will,” he says.
NBA leading the way
Some of the biggest champions of legalized sports betting have come from unlikely places: professional sports.
For decades, pro leagues were the most vocal opponents of legalizing sports betting, fearing the move would degrade the games. Recently, however, a number of professional sports leaders have come around, recognizing that gambling is a large driver of ratings and fan interest, and that sports betting could be an opportunity to create a new revenue stream if they do it right.
No. 1 on this list: Adam Silver, the current commissioner of the National Basketball Association.
One of Silver’s first acts as commissioner was to pen a 2014 op-ed in The New York Times supporting legal sports betting. In the piece, he outlined that his support was conditional—he was in favor of making it legal, but also called for specific regulations such as mandatory monitoring and reporting of unusual betting-line movements; a licensing protocol to ensure betting operators are legitimate; minimum-age verification measures; geo-blocking technology to ensure betting is available only where it is legal; mechanisms to identify and exclude people with gambling problems; and education about responsible gaming.
More recently, this year, Silver doubled-down on his commitment to legalizing sports betting, suggesting that the mechanism of in-app purchases to power forthcoming over-the-top microtransactions for segments of games eventually could be applied to making wagers while watching games as well.
“I think the vision goes as far as the imagination,” he was quoted as saying.
Other professional sports leagues, including Major League Baseball, also have expressed interest in compromising on the subject of legalized sports betting to ensure they have a piece of the proverbial pie. These two leagues actually have gone so far as teaming up to lobby state legislatures with their ideas for how it all should work.
Not everybody loves the idea of legalizing sports betting in the United States.
Among the loudest opponents: Native American groups that currently operate casinos under tribal compacts with the states in which they live. John Holden, a visiting scholar in sports management at Florida State University, says tribes have argued that by virtue of their compacts sports betting would be part and parcel of something they’d get to run (and, of course, profit from).
[beauty_quote quote=' “Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not.” - Justice Samuel A. Alito']
Another argument against the move revolves around “integrity.” Here, opponents allege that if players know they can bet on games legally, they will find ways to throw games for profit—even if they know regulators are watching.
Perhaps the most salient example of this is professional tennis, where a recent report uncovered a “tsunami” of match-fixing and corruption at lower-level tennis events.
One of the proposals to combat these sorts of abuses has come from the professional sports leagues. The proposal revolves around an “integrity fee” that would tax each wager 1 or 2 percent and leverage that money to defray the cost of hiring regulators to monitor wagers in real-time. The idea certainly addresses what could be a real challenge. But Holden isn’t buying it.
“To me it’s premature to advocate for a system that’s different from what Nevada has been doing and use private monitors that have other interests,” he says. “The system that Nevada has been using has worked for the last 50 years; why reinvent the wheel?”
Another question: How to handle betting on college sports? Most current discussions about legalizing sports betting stop at professional sports and do not include the college game.
Now that the justices have opened the door for states to enact some form of legal sports betting, it’s likely the industry will grow rapidly.
For the long-term, most experts agree it’s inevitable that the majority of professional sports stadiums across America will have on-site betting kiosks like Craven Cottage. Many say online sports betting will proliferate, too, offering bettors the option to wager on their smartphones from any place at any time.
For Clary, the bottom line is balance.
“If the leagues really do want to have integrity fees, and it makes it harder for books to offer odds that are competitive, illegal books will still exist,” says Clary, whose day job is as news editor at The San Diego Union-Tribune. “People are going to go where they can get good odds.”
Matt Villano is a freelance writer and editor based in Healdsburg, California. He has covered gambling since 2003. Learn more about him at whalehead.com.
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