Federal Government Considering Legal Sports Betting Review

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Wednesday, November 16th, 2016 | Written by Charles Washington

Full sports betting is illegal in the United States everywhere except in the state of Nevada, but that doesn’t mean that Americans aren’t spending their hard earned cash betting on sports. In fact, it’s estimated that $149 billion is wagered every year on illegal online sports betting with Americans finding ways to place bets with offshore betting sites located in such jurisdictions as Costa Rica, Europe and Australia. Furthermore, it’s believed that around $15 billion of that huge sum comes just from bets placed on the Super Bowl alone.

Legal Sports Betting Missed Opportunity

Legal sports betting generates only $4.3 billion in annual revenues and is taxed accordingly, although it’s clear that the federal and state governments are missing out on a large portion of the potential tax revenues that could be generated from a widespread sports betting industry. It is estimated that the Super Bowl, for instance, would generate an extra $300 to $500 million in taxes should the restrictive gambling laws in the U.S be lifted.

Now, one U.S. lawmaker is hoping to change the current situation. U.S. Representative Frank Pallone is working to draft new legislation that would eliminate the nationwide ban on sports betting and make it possible for all levels of government to cash in on Americans’ growing appetite for sports betting. As Pallone stated during a recent interview with ESPN:

“The laws need a wholesale review to see how they can actually work together and create a fairer playing field for all types of gambling, both online and offline, including sports betting and daily fantasy sports. At the same time, we must ensure the laws are actually creating an environment of integrity and accountability, and include strong consumer protections.”

The U.S. Representative for New Jersey’s 6th congressional district also added that he intends to continue debating the topic with those key interest groups involved in the issue, before finally introducing comprehensive legislation to modernize these “outdated laws.”

The Timing Might Be Right

Attitudes about gambling have changed greatly since the three laws that work together to ban sports betting were put into place; namely the Professional and Amateur Sports Protection Act (PASPA) of 1992, the Federal Wire Act of 1961, and the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. Casinos are now located in many states across the USA, while three states have also made online gambling legal, with many more considering following suit. Plus, daily fantasy sports (DFS) betting is gaining regulated or permitted status in many states.

In light of all of this, Pallone feels that the past stigma surrounding sports betting is no longer applicable, and that Americans may now be ready to lend their support to legislation which would make legal sports betting the law of the land.

Obstacles Are Ahead

Americans may be mostly ambivalent towards sports betting, but there is one major obstacle to legalization that Frank Pallone is going to have to contend with–the major professional sports leagues. One influential American, the renowned baseball statistician Nate Silver, is open to the idea of sports betting as he feels that it could be beneficial for spectator sports, provided that there is language in the laws to help prevent game fixing, and other forms of cheating.

So far the National Hockey League, the National Football League and Major League Baseball, on the other, have been adamantly against the idea of legal sports betting. They’ve even spent a small fortune fighting New Jersey’s efforts to legalize sports books in a lengthy legal proceeding that went all the way to the Federal Court of Appeals, and may still end up in the U.S. Supreme Court.

It’s clear that the only way sports betting will succeed is if the voices of the Americans who support it are louder than the leagues. Will they be enough to give Frank Pallone the support he needs to get the bill through? We’ll be watching to see, as will be numerous online sports book operators from overseas.

Potentially World’s Biggest Market

In terms of pure economics alone, the United States government stands to rake in around $12.4 billion annually by legalizing sports betting. This would automatically make it the world’s biggest sports betting market, and a full five times larger than that of Great Britain. In fact, the UK provides a perfect model for the US to follow, as the country’s sports betting industry was prohibited until 1961, but has since grown into a hugely successful industry that generated £1.19 billion in 2015.