Is an Expansion of Sports Betting in the US Inevitable?

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Wednesday, December 2nd, 2015 | Written by Charles Washington

Sports betting is illegal everywhere in the United States outside of four designated states, namely Nevada, Delaware, Oregon and Montana. However, the Professional and Amateur Sports Protection Act (PASPA) of 1992 grants Nevada a monopoly on single-game sports betting, with the other three states limited to multiple game “parlay” instead. Needless to say, all these states have profited enormously from their privileged positions, and in Nevada sports bookies alone bring in an average of $4 billion in bets every year.

Research indicates that even that sizable sum is just a small percentage of what’s spent placing bets on sporting events every year. Studies believe that overseas sports betting sites and illegally operating bookies earn $50 to $400 billion annually. It’s clear that there is money to be made in sports betting, and many feel it’s just a matter of time before judicial scrutiny of PASPA eventually leads to more states allowing legally placed sports bets.

Arguments in Favor of Legalization

The number of voices speaking out in opposition of PASPA, the law that makes sports betting illegal, is growing all the time. Those in favor of legalizing sports betting raise a number of arguments to support their positions, including:

1. States could make tax revenue off of sports betting that is already taking place through illegal channels.

2. The American people seem largely in favor of legalization with an estimated 60 percent believing it should be legal, according to opinion polls.

3. Sports betting discourages cheating because providers that accept bets have a high stake in making sure that games are fair and not fixed.

4. Legalizing sports betting would harm organized crime syndicates and has the potential to reduce overall crime in the United States.

Arguments Against Legalization

While there are many people in favor of legalizing sports betting, some people are concerned about the potential negative ramifications of legalization. Some arguments against the repeal of PAPSA include:

1. Legalizing sports betting encourages gambling and could potentially increase the number of people who have gambling addictions.

2. Athletes could be bribed to throw games, diminishing the integrity of professional sports. There have been instances of this occurring even with high-paid soccer players in Europe.

3. Because sports betting requires upfront payment, people who want to gamble now and pay later would likely still make use of their current illegal bookies.

What the Leagues Say

In the past, professional sports leagues in the U.S. were united in their opposition to sports betting, but that has changed in recent years. The NBA, MLB and NHL have all made statements indicating that they would support a federally-regulated system of sports betting. Only the NFL is holding out in support of PAPSA. Critics of the NFL are quick to point out that the league has entered partnerships with daily fantasy sports betting sites, which many people believe amount to online gambling. Others state that NFL teams have benefited from taxpayer money in order to build new stadiums in many markets and that the NFL shouldn’t stand in the way of states generating revenue from taxing bets.

The Way Forward

While it’s unclear what might sway the NFL in favor of sports betting, there is already a fight underway to protest PAPSA. New Jersey is in the midst of a legal battle for the right to allow for sports bets. The ruling on the case is expected within the next few months and could open the doors to legalization with or without the nod of approval from the NFL. In the meantime, the pro-gambling camp has recently picked up an unexpected ally in the guise of NBA commissioner Adam Silver, who has now indicated he was in favor of allowing legalized sports gambling throughout the country. Coincidentally, the announcement comes just after NBA owners acquired an equity stake in FanDuel, which is one of the biggest operators in the fantasy sports betting industry. As mentioned, the NBA, NFL, NHL and MLB have all vigorously supported PASPA in the past, but in an op-ed column in the New York Times last month, Silver said that the time has now come to regulate the practice. As he explained in his post:

“Times have changed since PASPA was enacted. Gambling has increasingly become a popular and accepted form of entertainment in the United States. Most states offer lotteries. Over half of them have legal casinos. Three have approved some form of Internet gambling, with others poised to follow. There is an obvious appetite among sports fans for a safe and legal way to wager on professional sporting events.”