How To End Illegal Sports Betting

The question of how to end illegal sports betting in the United States is more prevalent now than ever before. This is in part to sports gambling growing from a $40 billion industry in 1991, to an estimated $150 billion to $400 billion today. While such a number would typically indicate economic growth, this is not the case as today’s figure represents how much is spent on the illegal sports betting market. With the sports betting in the US being limited to Nevada and Delaware, citizens are spending billions of dollars at offshore sportsbooks or underground bookmakers. The growth of the sports betting industry even after the passage of the Professional and Amateur Sports Protection Act of 1992 (PASPA) proves that the federal law has failed. At this point, the US is simply losing billions of dollars that could be better spent stimulating the economy and improving local communities. Sports betting could be a major source of tax revenue used for public programs such as healthcare, law enforcement, and education. Rather than repealing an archaic and arguably unconstitutional law, the federal government has opted to keep the sports betting ban active for nearly 25 years.

Legalizing sports betting has gone from a mere discussion to a major initiative of industry leaders. There are states such as New Jersey, West Virginia, Arizona, Mississippi, and Wisconsin advocating for regulated sports betting. Trade organizations such as the American Gaming Association (AGA) have created coalitions that are dedicated to presenting sports betting legislation to Congress. Making it legal to bet on sports is about more than consumer enjoyment, it is about benefiting the economy and giving each state their right to choose. In assessing how to end illegal sports betting, it is clear that several factors will need to be considered. Three ways to end the ban on sports gambling include re-evaluating state sovereignty, protecting game integrity, and providing transparency.

Let The States Decide Whether Or Not To Legalize Sports Betting

No state has spent as much time trying to figure out how to end illegal sports betting than New Jersey. The state has taken two different approaches to bring legalized sports betting to its borders. The first attempt was a voter referendum that approved legalized sports gambling by an overwhelming margin. After the court sided with the sports leagues that filed lawsuits, New Jersey then repealed its laws that expressly prohibited sports betting. Again, the court ruled that NJ was in violation of PASPA. Now, the constitutionality of the federal law is being scrutinized as it seems to disregard state sovereignty. The Tenth Amendment to the U.S. Constitution reads:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

States have not been able to determine the legalization and regulation of all other forms of gambling being that the activity is a form of commerce. Making it impossible to create or repeal laws that would permit this particular type of gambling could be construed as federal overreach. Determining how to end illegal sports betting begins with giving states the power to choose what best fits the interests of their people and their economy.

Protect The Integrity Of The Games

One of the main justifications for enacting PASPA was to protect game integrity from match fixing and point shaving. Though this may have been an acceptable rationalization 25 years ago, research has shown that in today’s day in age the federal law may actually be counteractive. A study by University of Liverpool professor David Forrest and UK Sports Integrity Panel Chairman Rick Parry found that there are two conditions that are most likely to increase corruption: low paid athletes and officials, and a market with high liquidity yet minimal regulation.

Athletes are paid more now than ever before, which makes it highly unlikely to be tempted by bribes. Though college athletes are unpaid and are more vulnerable to point shaving schemes, the risks of participating in the crime far outweigh the benefits. With the integrity policies that athletic programs now enforce, players know that they are liable to lose financial aid, scholarships, and their eligibility to play at the professional level. The bribery and other illicit schemes of the past are far less prevalent today.

Though there is no way to 100% corruption in sports, there are more ways to monitor illicit activities in legal sports betting markets. Bookmakers are incentivized to share any suspicious betting activities with authorities. For example, after a match-fixing incident in German soccer, the German Federation and the Bundesliga signed an agreement with Sportradar that would serve as an early alert system to the leagues and authorities. FIFA has also signed a contract with the betting odds data company in order to improve the integrity of the game. In the United States, however, there is no information on suspicious betting patterns because bettors use unregulated sites. If a bettor were to notice something questionable, there would be no desire to share with law enforcement due to the risk of being personally investigated.

When considering how to end illegal sports betting, protecting the integrity of sports is essential. State licensed sportsbooks in a regulated environment will make it easier to implement an early warning system for corrupt betting trends.

Transparency In The Sports Betting Industry

With the mix of legal sports betting, unregulated betting sites, and illegal bookmakers, there is a definite lack of transparency in the market. To end illegal sports betting, the market will need to be regulated with clearly defined goals and laws. There will need to be mandatory auditing and reports that will pick up any unusual line movements. Each state should have its own licensing requirements and application process for operators wishing to enter the market. Geolocation and other verification systems should be in place to prevent underage sports gambling. Various consumer protections, such as the separation of operational and player funds, should be in place. Problem gambling is an important issue to address, which is why there will be an abundance of responsible gaming resources and treatment programs available in a regulated sports betting environment. Transparency is key in all aspects of creating a regulated sports betting environment.