Will The Next US President Legalize Sports Betting?

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Tuesday, May 10th, 2016 | Written by Lucy Brown

The majority of states in the U.S. are home to at least one casino whether it’s privately operated, or on tribal lands. Furthermore, three U.S. states have already legalized and regulated online gambling, and still more are considering following suit by introducing legal iGaming in the near future. Daily fantasy sports betting is also becoming regulated in some states, whilst being allowed to continue unregulated in others. All of this shows that attitudes toward gambling are shifting in the U.S., yet one form of gambling remains almost completely illegal–sports betting.

Recently, a spokesperson for the American Gambling Association (AGA), Geoff Freedom, predicted in an interview that he believes that will soon change. As he subsequently explained during an interview with Trib Live: “The next president is going to have that issue of legalizing sports betting on their desk, and I’m confident they’ll make the right decision. It’s time for a fresh, rational approach to sports betting that reflects…reality.”

The Barrier to Sports Betting

The current barrier to sports betting in the U.S. is the Professional and Amateur Sports Protection Act. Also known as PASPA, the legislation was passed in 1992 largely due to pressures from professional sports leagues in the United States. The law allowed for sports betting to continue fully in Las Vegas, and for limited betting to continue in three states where it had been legal in 1992, namely Delaware, Montana and Oregon.

The Current State of Sports Betting

With sports betting being completely illegal in 46 states and greatly limited in three more, one would expect sports betting to be uncommon in the U.S.; however, the American Gambling Association reports that sports betting is alive and well. Nevertheless, only about 1 to 3 percent of the revenue is going to Nevada, where legal sports betting is fully legal. In the meantime, it is estimated that around $148.8 billion is being spent each year on illegal offshore sports betting sites, which readily accept wagers from Americans. Furthermore, the U.S. is pretty much powerless to put a stop to it.

A Source of Tax Revenue

In an interview with a Pittsburgh newspaper, AGA spokesperson Geoff Freeman went on the record saying that he believes the next U.S. President will sign a law that will overturn PASPA and make sports betting legal. He believes that within the next 4 years, U.S. lawmakers will realize that states are missing out on considerably large amounts of revenue because their residents are gambling illegally rather than on legal websites that could be regulated and taxed accordingly. With so many states facing big deficits, clearing the way for them to regulate sports betting and to begin to bring in tax revenues could help make up for some of their budget shortfalls, and as Freeman explains:

“Prohibition, we’ve found in this country, doesn’t work very well. Let’s begin to look at this, regulate it, bring some of the tax dollars that could be had back to the local communities and the states. Let’s look at the ways of reinventing this (casino) industry by having good policy.”

New Jersey Already Fighting

The desire among states to legalize sports betting is growing, and New Jersey is already fighting for the right to do so. The Garden State has been caught up in a legal battle with the National Football League, the National Basketball Association, Major League Baseball, the National Hockey League and the National Collegiate Athletics Association, as they wish to allow their casinos to accept spots bets. New Jersey is arguing that PASPA flies in the face of the commerce clause of the Constitution. So far, New Jersey has lost their appeals, but they do have one last chance to make their case before an en banc panel in the 3rd Circuit Court of Appeals.

As mentioned, any expansion of sports betting beyond Nevada depends of the federal government’s willingness to amend PASPA. Weighing in on the issue, editor of the Gaming Law Review, Sue Schneider, said that one option may be to give states a limited amount of time to decide whether to adopt sports-betting, similar to the grace period given ahead of PASPA coming into effect in 1992. Currently, sports betting bills are before legislatures in four states, namely California, Delaware, New York and Pennsylvania, with the emphasis now on what regulations should be in place when sports betting does eventually spread across the country. As Schneider then comments:

“You don’t have to reinvent the wheel. All you have to do is look at 50 other countries around the world that have been doing it for decades.”