By: Jack Meyer
New NBA commissioner Adam Silver made headlines recently when he wrote in a New York Times op-ed piece that he was in favor of the legalization of sports gambling.[1] This came as a surprise to some NBA fans, as this is the same sport that was previously rocked by a points shaving scandal involving former referee Tim Donaghey. Silver’s essential thesis was that since sports gambling is already widespread despite its illegality, a push toward legalization is long overdue. Though little hard data exists, some estimates suggest that nearly $400 billion is illegally wagered on sports each year,[2] including $9 billion wagered on the NCAA Men’s Basketball Tournament alone.[3] With the emergence of the internet and fantasy sports, sports betting has perhaps never been more widespread and Silver’s call for legalization certainly does not fall on deaf ears. Proponents of sports gambling have called for legalization so that the industry can be regulated and corruption eliminated. According to Commissioner Silver, “I believe that sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”[4] While sports gambling is currently illegal under Federal law, its eventual legality appears likely in the near future.
Sports gambling was made illegal under Federal law with the passage of the Professional and Amateur Sports Protection Act of 1992.[5] This legislation made sports gambling illegal in all but four states- Nevada, Oregon, Montana, and Delaware. With the advent of the internet however, gamblers no longer have to travel to one of the few states which allow gambling and sports betting. The result is that sports gambling has become as commonplace as it has ever been. The proliferation of the internet on mobile phones, coupled with the increasing popularity of fantasy sports has led to an age where “all it takes is a credit card, internet connection, and a cell phone to place a bet.”[6] Sports betting is so widespread and seemingly acceptable to the American public that sports television outlets such as ESPN frequently mention point spreads on the air and offer advice to bettors under a sarcastic “for entertainment purposes only” disclaimer.[7]
Fantasy sports betting services such as DraftKings and FanDuel have dramatically increased the opportunities for sports gamblers by provding a wide variety of sports related gambling options. In seasons past, fantasy football was played primarily between friends and co-workers for relatively nominal amounts of money. Today web-based companies such as DraftKings and FanDuel have transformed fantasy sports by offering new options such as one day fantasy leagues, some of which have turned sports gamblers into millionaires overnight. Fantasy sports has expanded from solely the NFL several years ago to now including the NBA, Major League Baseball, the NHL and the PGA Tour. Thus more opportunities exist for the sports gambler than ever before and the notion that the practice is illegal is largely ignored by the American public.
The primary battle cry for those in favor of the legalization of sports gambling is twofold. First is the argument that gambling will exist regardless of whether the government chooses to legalize it, and as it exists right now, states are losing out on millions of dollars of potential tax revenue that either leaves the state or goes to criminal enterprises. Second, the legalization of sports gambling could help eliminate corruption and provide consumer protection by giving bettors the outlet of legal recourse. California State Senator Roderick D. Wright proposed legislature in his state where a gambling enterprise could operate under the supervision of the Department of Justice and the Gaming Control Board. According to Mr. Wright “This process gives bettors assurances that they are on a fair playing field with proper legal recourse. It also allows the state to bring in millions–in the long run, billions–that would have otherwise gone to those engaged in criminal enterprise.”[8]
A principal concern with the legalization of sports betting is that it will lead to the risk of point shaving and a loss of the integrity of the game. Points shaving certainly has occurred in the past, with notable examples being the 1919 Chicago White Sox who were accused of intentionally losing the World Series in exchange for money paid to them by organized crime bosses. A more recent example is the Boston College basketball scandal of the 1980s where players were accused of fixing games under the pressure of the mafia. It is crucial to keep in mind however that the risk of game fixing is far greater when the athletes themselves are financially vulnerable. In other words, the 1919 White Sox were not compensated in salary anywhere near to the level of today’s Major League players. Thus, a contemporary baseball player is highly unlikely to be influenced by money from gamblers because he is already highly compensated in salary by his team.
Gambling in collegiate athletics is arguably more susceptible to points shaving due to the fact that college athletes are not compensated beyond their free tuition. Despite this, the legalization of sports gambling will likely bring an increased attention on point spreads meaning that it is highly likely that an attempt at points shaving would be noticed immediately, where in the past it may have flew under the radar. Adam Silver echoed this theory when he referred to the Tim Donaghy points shaving scandal, “The Donaghy controversy also made me aware how important it is that we have a way of monitoring irregular activity on our games,” Silver said. “But for the FBI knocking on our door and notifying us about Donaghy’s betting, none of the systems that we then had in place had captured any betting by Tim Donaghy.”[9] Additionally, the legalization of sports gambling would place the gambling industry in the hands of legitimate businesses and would eliminate the potential influence of organized crime.
A noteworthy concern with sports gambling legalization is that it will lead to more gambling addicts. The argument is based on the premise that sports gambling is viewed as a “gateway drug” to other types of gambling. According to a 60 Minutes investigation, the number of younger gambling addicts is nearly double that of the older generation.[10] This could perhaps be due to the fact that younger people tend to be more technologically astute and therefore are more likely to engage in gambling on their mobile devices instead of gambling at formal casinos. While the risk that gambling poses for addiction cannot be ignored, the argument can be made that legalizing sports gambling removes the stigma from the activity and therefore makes it more likely that problem gamblers will seek professional help before it is too late.[11]
Though there are arguments both for and against the legalization of sports gambling, it appears inevitable that the practice will be legalized in the coming years. Legalization would provide both states and consumers with tangible benefits, and since sports betting seems highly likely to continue regardless of government intervention, regulation through legalization appears to be in the best interest of all parties. Thus, the inevitable legalization of sports betting is far from a long shot; it is a close to a sure thing as one can get.
[1] Adam Silver, Legalize and Regulate Sports Betting, New York Times, (Nov.13, 2014), http://www.nytimes.com/2014/11/14/opinion/nba-commissioner-adam-silver-legalize-sports-betting.html?_r=0
[2] Id
[3]David Purdum, Will Sports Betting Legalization Increase Gambling Addiction?, ESPN (Mar. 25, 2015), http://espn.go.com/chalk/story/_/id/12555614/betting-sports-betting-legalization-cause-more-problem-gamblers
[4] Id
[5]Sports Protection Act, US Gambling Laws (Mar. 5, 2007) http://www.gambling-law-us.com/Federal-Laws/sports-protection.htm
[6]Todd Fuhrman, Legalize Sports Gambling, Fox Sports (Feb. 2, 2015). http://www.foxsports.com/college-football/outkick-the-coverage/legalize-sports-gambling-020215
[7]Gary Payne, Sports Betting Already Happens; Government Might as Well Regulate it, US News & World Report (Jun. 6, 2012) http://www.usnews.com/debate-club/should-sports-betting-be-legal/sports-betting-already-happens-government-might-as-well-regulate-it
[8] Roderick D. Wright, Making Sports Betting Legal Protects Bettors from Fraud, Theft, US News & World Report (Jun. 6, 2012) http://www.usnews.com/debate-club/should-sports-betting-be-legal/making-sports-betting-legal-protects-bettors-from-fraud-theft
[9] Jeff Ma, 5 Myths of Sports Betting Legalization, ESPN (Feb. 26, 2015) http://espn.go.com/chalk/story/_/id/12386494/betting-dispelling-top-five-myths-legalizing-sports-betting
[10] John Warren Kindt, Sports Betting Means Crime, Addiction, and Cost for Taxpayers, US News & World Report (Jun. 12, 2012) http://www.usnews.com/debate-club/should-sports-betting-be-legal/sports-betting-means-crime-addiction-and-costs-for-taxpayers
[11] Jeff Ma, 5 Myths of Sports Betting Legalization, ESPN (Feb. 26, 2015) http://espn.go.com/chalk/story/_/id/12386494/betting-dispelling-top-five-myths-legalizing-sports-betting