Regulated Sports Betting In The USA – Why We Need It

One of the things we like to talk about the most at LegalSportsBetting.com is government regulated sports betting, which we are positive is coming soon. Betting on sports has grown from an occasional hobby to one of the most impactful economic activities in the world. Sports betting is a multi-billion dollar industry across the United Kingdom and in countries such as Spain, Australia, and Macau. In the United States, only Nevada and Delaware offer legal sports betting opportunities to residents, leaving billions of dollars to be spent at offshore sportsbooks.

According to a report * http://gaming.unlv.edu/reports/NV_sportsbetting.pdf * by UNLV’s Center for Gaming Research, the total amount bet on sports in Nevada from 1984 to 2016 was $76,993,984,000 ($77 billion). While this may initially seem like a large handle, it is pennies compared to the illegal sports market. The American Gaming Association (AGA) estimates that over $10 billion was wagered illegally on March Madness alone in 2017. The same group also estimated that about $88 billion was wagered illegally during the 2016 NFL and NCAA football seasons.

The figures above prove that by not expanding government regulated sports betting, the United States is depriving itself of billions of dollars in potential tax revenue. Americans want to bet on sports and their spending behaviors show that the activity will be done with or without being regulated. It is time for the USA to overcome the obstacles that currently prevent state governments from regulating sports betting.

Why Is There Not Regulated Sports Betting In The USA

A 1992 federal ban on sports betting is the reason why state governments have not been able to implement their own regulatory regimes. The Professional and Amateur Sports Protection Act of 1992 (PASPA) limits sports betting to four states – Nevada, Oregon, Montana, and Delaware. These four states were grandfathered into PASPA due to pre-existing sports betting laws. Nevada had legalized single-game wagering at sportsbooks, while the remaining three states had sports lotteries.

Even with sports betting being banned in the 46 other states, US sports fans still manage to wager at offshore sports betting sites. These sites are licensed in countries such as Costa Rica, Antigua, and Panama where remote sports betting is legal. As they operate outside of the United States, they are not subject to the limitations of PASPA or other federal laws. While many of these sites are safe for US players to use, unregulated sportsbooks hold no accountability to operators, are not overseen by law enforcement, and there is an absence of consumer protections.

Reasons To Regulate Sports Betting In The USA

Regulating sports betting in the United States presents benefits from state, federal, and consumer standpoints. One main argument against PASPA is that it violates the constitutional rights of the states. A report by the Competitive Enterprise Institute explains how the ban on sports betting undermines the 10th amendment by infringing on state sovereignty. With all other forms of gambling (casino gaming, poker, horse racing betting, etc.) states have been able to determine legality and regulation. Allowing government regulated sports betting would restore power where it arguably belongs.

Numerous research studies and reports have shown the economic impact that a government regulated sports betting market would have on the US. GamblingCompliance, an international gaming research firm, projected that a US betting market with legal casino, online, and retail betting locations would produce $12.4 billion in tax revenue. This would make the American sports betting market more than 10 times bigger than that of Italy. Tax revenues could, in turn, be used for education programs, healthcare, and other public services. In terms of overall economic impact, Oxford Economics * https://static1.squarespace.com/static/5696d0f14bf118aff8f1d23e/t/593dd28ee58c62c93bcfff94/1497223822296/ASBC_Oxford_Economics.pdf *estimates that legal sports betting would generate $21.9 to $26.6 billion dollars. The estimate accounts for the after effects of the money spent by consumers on sports betting.

Sports enthusiasts want more legal sports betting options for their enjoyment, but there are consumer advantages that would address other issues in the industry. Many of the sports leagues have argued that the widespread regulation of sports betting would damage the integrity of the games. In reality, regulated bookmakers would be more incentivized to report any questionable betting behaviors or corrupt practices. As it currently stands with PASPA, there is no line of communication between offshore online sportsbooks and law enforcement. Regulated markets would also make it easier to handle the issue of problem gambling. The government would be able to establish programs that better monitor problem gaming patterns and also implement more effective treatment protocols.

Current Initiatives For Legalized And Regulated Sports Betting

Though the options to bet on sports in the United States are still limited, proponents of government regulated sports betting have been taking legal action to push the agenda. The state of New Jersey has been on a five-year journey to bring legalized sports betting within its borders. Since 2011, the state has attempted to pass sports betting laws that have continuously been struck down by the U.S. Third Circuit Court of Appeals. Though the courts have continued to rule in favor of the NCAA, NFL, NBA, MLB, and NHL who filed suit against the state, NJ recently had their request for an appeal granted by the U.S. Supreme Court. New Jersey will now get to argue the unconstitutionality of PASPA and justify why sports betting should be legal in the state. SCOTUS is expected to hear the case during the fall.

With the prospect of the federal sports betting ban being lifted, many states have introduced sports betting legislation in preparation. Connecticut has already passed a bill that would allow for sports betting regulation should the activity become lawful. South Carolina and Michigan have proposed bills that would serve as amendments to existing laws that prohibit or simply do not mention regulated sports betting. Pennsylvania has two sports betting bills in the works, while Maryland has a bill that lays the framework for regulating sports betting. If passed, the sports betting provisions included in the laws would only go into effect should SCOTUS repeal or amend PASPA.

Lobbying efforts for government regulated sports betting have also ramped up in recent year. The American Gaming Association, the largest lobbying group for the casino industry, has created a group dedicated to bringing legalized sports betting to the US- the American Sports Betting Coalition (ASBC). The ASBC consists of industry influencers that come from diverse areas including the gaming industry, law enforcement, politics, business, and other organizations. The Coalition Advisory Council will work with policymakers to ultimately submit a report to Congress that will detail how to create and sustain a thriving legal sports betting environment. Outside of the ASBC, there has been support for government regulated sports betting from politicians, judges, and even the sports leagues. If the cause continues to gain legal traction, sports betting may become legal in the United States by the time the Raiders move to Vegas in 2020.