Legalized sports gambling just got one step closer
So is America finally going to have legalized sports wagering – a book on every street block taking NFL action, just like in Europe, or online bets done with taxable companies inside our borders?
Or is this just the latest in decades of big teases?
On Tuesday, the United States Supreme Court announced it would hear an appeal to reinstate a 2012 New Jersey law that would legalize sports wagering at the state’s casinos and racetracks.
While there is still a long, long way to go, it is as significant of a development in the legalization of sports betting as there’s been in years.
A series of lower courts said the state law, championed by New Jersey governor Chris Christie, was in conflict with the federal Professional and Amateur Sports Protection Act of 1992 (PASPA). That law prohibits sports wagering outside of Nevada and, in limited ways, three other states.
Officially filed as New Jersey Thoroughbred Horsemen’s Association v. NCAA, et al, oral arguments will likely be heard during the court’s fall session. A decision is expected in 2018.
Efforts at legalizing sports wagering have always stalled, even as leagues such as the NBA and NHL have rescinded public opposition to it and began to see both the folly of the arguments against it as well as potential revenue and fan interest benefits. Even the staid NFL has softened its rhetoric and prepares to open a franchise just off the Las Vegas Strip and continues to eye another in London, where sports books dot the landscape.
There is certainly no guarantee the Supreme Court will rule in favor of New Jersey; every lower court has sided with the federal government. The 3rd U.S. Circuit Court of Appeals out of Philadelphia ruled 10-2 in favor of the feds. Christie, a former federal prosecutor, knew there would be a considerable legal fight, although he likely never anticipated losing every time.
The case will not be decided based on the public argument of why sports wagering should be legal, such as how the PASPA was based largely on unfounded fears of game fixing, how law enforcement actually sees legal wagering as its best tool against compromised games and how illegal wagering, an industry estimated to be worth hundreds of billions of dollars, is boon to no one but organized crime.
Instead it will focus on whether PASPA unfairly grandfathered in four states, most notably Nevada, at the expense of others, thus violating state sovereignty protections under the 10th Amendment.
There is considerable hope, though, because the Supreme Court decided to hear the case despite strong opposition from the Trump Administration, whose Solicitor General filed a brief this spring arguing the Supreme Court not hear the appeal. There had been hope within the gaming industry that the administration of Donald Trump, a former casino owner himself, would be an advocate. That hasn’t occurred.
Yet the Supreme Court took the case anyway, suggesting it has something to say on the issue.
“We are pleased the Supreme Court appears to have responded favorably to our arguments as to why they should hear this important case,” said Geoff Freeman, CEO of the American Gaming Association. “[PASPA] has failed to protect sports and fans … and is fueling an unregulated $150 billion illegal gambling market that continues to deprive states of vital public funding.”
The tax money argument is one thing. Protection for gamblers who now have to skirt the law is another. And the fact so much of illegal sports wagering either goes offshore or to organized crime, which the FBI says uses the cash to fund more nefarious operations such as human trafficking and street narcotics sales, is another.
Mostly it’s just outdated. In 1992, the major professional sports leagues, as well as the NCAA, used fear mongering to a socially conservative public to argue that legalizing sports wagering would lead to a rash of match fixing and point shaving scandals. Back then, casinos were almost exclusively in Las Vegas and Atlantic City, New Jersey.
Twenty-five years later, casinos are nearly everywhere (39 states), filled with aging baby boomers pulling slots. You can play Keno while waiting in line at 7-11 in many places. Forty-four states have a government-run lottery, with some games crossing lines. Poker is ubiquitous on television. Pro sports franchises take sponsorship money from casinos, lend their logos to scratch tickets or have owners as investors in daily fantasy sports that are essentially a form of sports gambling.
It’s why there is far less opposition now, even from pro sports leagues. While wagering on games is different than blackjack tables or mindless lotteries, the culture has accepted gambling in general.
“Times have changed since PASPA was enacted,” NBA commissioner Adam Silver wrote in the New York Times way back in 2014, officially changing the league’s course on the issue. “I believe that sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”
The ultra-conservative NCAA may never end its opposition, but it’s common for college sports programs to hold 50-50 raffles during games and conference college basketball tournaments have been staged in casinos in Nevada, New Jersey and Connecticut.
The New Jersey law would simply establish sports books in Atlantic City and at the state’s three horse racing tracks. However, by ending Nevada’s near monopoly on the sports wagering business, the floodgates would open as other states seek to tap into the tax revenue and economic activity of sports wagering.
If that happened, “Congress will have to step in to regulate the market,” Freeman said.
Freeman believes the mere fact the Supreme Court took the case will spur congressional action that could repeal PASPA.
“This Supreme Court decision signals to everyone that a new day is coming,” Freeman said.
We’re still a ways from that. The date in front of the Supreme Court guarantees nothing.
Except, they wouldn’t have gone against the arguments of the Trump Administration and taken the case if they were simply going to uphold the status quo and agree with the lopsided decisions of the lower courts, would they?
What are the odds of that?