Update: The US Government Has Made Sports Betting Legal!

While the US government has made sports betting legal, the remainder of this page – written before the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA, 1992) – will stay up (albeit edited for chronological clarity) as a point of reference. This is because the battle for legal sports betting in the US is not over. Indeed, PASPA is gone, freeing all the states to pass their own sports wagering legislation. However, the federal government is not sitting idly by, and there have already been efforts from several high-profile congresspersons to reestablish federal control over the states and their sports wagering initiatives. So that a repeat of unconstitutional abuse like PASPA does not occur, it is critical that states – and the US citizenry – understand and speak out against federal involvement in the states’ sports betting affairs.

After all, the oversight simply isn’t needed. While there’s no charter for it in the first place, the states that have so far legalized their own sports betting industries have obviated the “need” for the federal government to act as “watchdog” over the industry. By the end of 2018 (PASPA was overturned in May 2018), seven states joined Nevada in offering legal sports betting at brick-and-mortar locations: Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island, and New Mexico. Other states like Arkansas, New York, and Connecticut (plus Washington D.C.) have legalized or partially legalized the pastime and awaiting further congressional action on refining their approved frameworks. More states are slated to take up the issue and act decisively within the next few congressional sessions. Without federal interference, it is estimated that 30-40 states should have front-facing retail sports betting up and running within the next 2-3 years.

Why The US Government Needed To Legalize Sports Betting

There are many reasons why the US government needed to make sports betting legal, and these are our thoughts on the matter. For nearly 25 years (1993-2018), there had been a very limited amount of legal sports betting in the United States. On October 28th, 1992, former President George H. W. Bush signed the Professional and Amateur Sports Protection Act (PASPA) into law, which effectively made sports betting illegal in all but four states: Nevada, Delaware, Montana, and Oregon. Of these, only NV had full-service single-game sports wagering, while the others could only offer very basic sports-themed lottery and bingo products (and all of whom gave these up after they proved unpopular). Thus, PASPA effectively granted Nevada a land-based sports betting monopoly in the United States.

While PASPA was in effect, though the number of states with legal sports betting could not grow, the popularity of betting on sports did – and continues to do so. Today, Americans spend hundreds of billions of dollars wagering on sports each year (some estimates claiming $300-400 billion annually!), though less than 3% of this is spent via legal sports betting in Las Vegas and other NV locales. Instead of making the trip to Sin City from all corners of the country just to place a few wagers on the games of the day, sports fans simply opted to use foreign-based sportsbooks over the Internet. These books, of course, remain the most common way for Americans to wager on sports, despite PASPA’s overturn. Still, though legitimate offshore online sportsbooks are totally safe and legal themselves, they do present issues that make a case for why sports betting should be legalized everywhere in the US. (Indeed, while the US government has made sports betting legal, it is now up to each state individually to legalize the pastime for its own residents.)

Naturally, there are those puritanical menaces in government who make arguments opposing the wide legalization of sports betting, but there are hundreds of research studies that present the undeniable benefits of legalizing the practice:

– More state tax revenue
– Increased education funding
– Increased infrastructure funding
– Greater employment rates
– Greater local economic impact

Some will argue that the US government making sports betting legal would cause several large, unwieldy problems. However, issues concerning the integrity games, “problem” gambling, and consumer protections can all be resolved when considering certain aspects of why sports betting should be legalized. Indeed, all the states to so far legalize the practice have had no trouble whatsoever in adequately addressing these very concerns, as – legal or not – they’ve always been central to the industry of sports wagering.

Sports Betting Is Already Happening In The USA

Even Donald Trump has been quoted multiple times expressing a similar sentiment about why sports betting should be legalized, but this blanket statement actually has several deeper layers. Sports betting is more than “just happening” – it is a multi-billion dollar industry. According to the American Gaming Association, Americans place nearly $150 billion in illegal sports bets per year, and other research suggests figures north of $300 billion. This isn’t penny ante stuff. In fact, $88 billion is said to be spent on just NFL and NCAA football games each year. It is clear that sports betting is wildly popular amongst American sports fans, so why not regulate sports betting rather than having bettors turn to illegal or offshore channels where tax and sportsbook revenues don’t stay in the country?

The Integrity Of Sports Can Be Protected

History has shown that sports betting was once connected with the criminal underworld, which is why it makes sense that maintaining the integrity of games was a real issue 25 years ago. In today’s day and age, there is enough technology to prevent interference and provide adequate protection. In the United States, we can look to other international sports betting markets as models for future regulation. The United Kingdom is one such example of a successful betting market that has had no major issues concerning maintaining integrity (and if anyone could budge or bilk a line, it’d be those soccer hooligan ne’er-do-wells!). Being able to better protect the integrity of games is one of the important reasons why sports betting should be legalized nationwide. In fact, MLB Commissioner Rob Manfred expressed a similar thought in a 2017 interview:

“Sports gambling has changed a lot. The old vision of betting illegally with a bookie somewhere is not today’s world. And, we’ve begun a conversation, educating people about what’s out there, what sports leagues in other countries have done, in an effort to make sure that Major League Baseball’s ready to join in what I think is going to be a dialogue about how sports gambling regulation in the United States should be changed.”

Public Attitudes Have Changed With Legal Sports Betting

Simply put, Americans want to be able to bet on sports and have proved this with their spending habits. There have also been polls showing that the overall attitude toward sports betting is positive amongst citizens. A poll conducted for the American Gaming Association by Greenberg Quinlan Rosner (GQR) presented concrete evidence that Americans believe in sports betting. 72% of avid sports fans believed that the federal ban on sports betting should be lifted (as it eventually was). The study also found that should sports betting become legal, about 28 million people would be more inclined to wager on sports, generating even more local economic impact. Indeed, since the GQR poll, the American Sports Betting Coalition (ASBC) has updated its optimistic outlook (which you can check out here).

Sports Leagues Have Changed Their Stance On Legal Sports Betting

While the NCAA and other major professional sports leagues have taken legal action against sports betting in the US (the Supreme Court case that resulted in PASPA’s overturn is Murphy vs. NCAA, for example), their overall attitudes are more favorable than in the past. League executives are able to see the reasons why sports betting should be legalized and have become more open to discussing regulation. Heads of players’ unions have been meeting regularly to discuss how regulated sports betting would impact their players. Though only one major sports commissioner has come out in outright support of legalized sports betting (Adam Silver of the NBA), you can see from the statements below that the professional sports leaders have all relaxed their stance. Only the NCAA remains concerned, although those concerns are predicated on the college athletic system’s many player abuses and are therefore difficult to take seriously. (Fortunately, these proved ultimately uncompelling, as the US government has made sports betting legal despite the NCAA’s complaints).

Adam Silver, NBA Commissioner, in November 2015 & July 2017:

“…[T]he laws on sports betting should be changed. Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards… [S]ports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”

“If there’s going to be a change in the regulatory structure with respects to sports gambling, we [need] to be in a position to meaningfully engage and shape…what the new regulatory scheme looks like. We’re in the process of talking to our owners and figuring out where we want to be in the event that there is, in fact, a significant change coming.”

David Stern, Former NBA Commissioner (And Original PASPA Advocate), in October 2015:

“There should be federal legislation that says, ‘Let’s go all the way’ and have betting on sports. It’s OK. It’s going to be properly regulated. …I think that gives a way for states to make more money, for leagues to be compensated for their intellectual property, and for the federal government to take [away] illegally bet money and put it through the federal coffers.”

Rob Manfred, MLB Commissioner, in March 2017:

“The fact of the matter is, those rules are actually easier to enforce if it’s all aboveboard, regulated federally and everybody knows what’s going on. [Legal sports betting] can actually improve the integrity issue.”

Gary Bettman, NHL Commissioner, in June 2015:

“I don’t worry about the integrity of the game… Our players are professionals. Their integrity, their values are right on, so that’s not the issue from our standpoint…”

Note: Though PASPA is no more, it is important to keep in mind that the commissioners (save Bettman, who has the only correct response on the issue of integrity) all speak for the idea of federal sports betting oversight. Right now, remember, the states are each in charge of their own policies and sports wagering structures. Part of why the major leagues want federal management of nationwide sports betting is because they believe they can coax congress into unilaterally awarding them a cut of the take at every US sportsbook in the form of the so-called “integrity fee.” (The premise that legal, state-regulated sports betting is a larger risk to the “integrity of the game” than existing gray market and black market wagering avenues is absurd on its face, but the leagues are after a cash-grab here.)

Economic Benefits Of Making Sports Betting Legal

In America, it all comes downs to what makes the most financial sense. By not capitalizing on the hundred-billion-dollar-plus sports betting industry, the US is losing out on local, state, and federal tax revenues. According to a report by Oxford Economics for the ASBC, the United States could generate anywhere between $4.8 billion and $5.3 billion in tax revenue off of legal sports betting annually. Not to mention that regulated sports betting could have a total economic impact of $26.6 billion per year! The same report found that legalized sports betting would improve employment in the US, creating an additional 125,000 jobs and over $6 billion in total wages.

By some credible estimates, the US (between its federal and state governments) has lost over a trillion dollars in tax revenue over the last 25 years, all because of PASPA. It that context, PASPA is one of the biggest financial boondoggles in US history, and even though the US government has made sports betting legal, it will take years – if not decades – to redirect all the gambling habits of the populace back to their individual states of residence. But it has to start somewhere, and it has. Hopefully, the federal government will not step in and slow state adoption. They couldn’t be trusted to manage US sports betting with PASPA, and they shouldn’t be trusted to do any better now. Support your state’s own sports betting initiatives, and happy betting!