Issue heats up ahead of SCOTUS case; Trump administration supports leagues
As the U.S. Supreme Court’s hearing of New Jersey’s case challenging the federal ban on sports betting nears, a new report shows that a legalized sports betting market in the U.S. would be worth between $2 billion and $5.8 billion annually.
GamblingCompliance released a report on a study predicting those revenue numbers would result if anywhere from 21 to 37 states implemented sports betting programs at casinos, racetracks, retail outlets and mobile phone applications. Estimates concentrated on states with casino gambling.
The report’s release comes shortly before a major gaming industry conference on the subject, Clarion Gaming’s Sports Betting USA Conference in New York City November 14-15. Stakeholders from across the industry will focus on the federal sports-betting ban—the 1992 Professional and Amateur Sports Protection Act (PASPA)—and the merits of a nationwide repeal of the law.
The conference also will test the market demand for a legal sports betting market, and will focus on integrity in sports, which is PASPA’s key aim, and present opportunities for gaming growth against the harm currently being caused by the illegal betting market.
“This conference, the first of its type to be held in the United States, will hopefully be a guide for future forums and in the process achieve the legalization of sports betting across the U.S.A.,” said US Fantasy’s Vic Salerno, one of 50 “thought leader” panelists who will speak at the event.
PASPA prohibits sports betting in all states except those with pre-existing sports bet legislation—Oregon, Delaware, Montana and Nevada. Only Nevada has full-blown, single-event sports betting. The other three states offer only parlay wagers.
On December 4, first arguments are scheduled in the appeal of the lawsuit filed in 2014 by the four major professional sports leagues and the NCAA challenging a New Jersey law authorizing state-regulated sports betting at Atlantic City casinos. Lower courts ruled the law violated PASPA.
New Jersey has appealed those rulings to the high court on the basis that PASPA is itself an unconstitutional violation of states’ rights.
Last week, New Jersey Governor Chris Christie, who signed the New Jersey sports betting bill into law, lambasted the sports leagues who filed the lawsuit for what he called their hypocrisy.
“The hypocrisy is just so overwhelming,” Christie told Andrea Kremer of HBO’s Real Sports with Bryant Gumbel. “They say because we have the Giants and the Jets and the Devils that somehow we shouldn’t be allowed to have gambling here, because somehow it will threaten the integrity of the game. Well, are you kidding? How isn’t it threatening the integrity of the game in Las Vegas for the NHL and the NFL?
“I mean that’s why they no longer have moral high ground on this. They cannot make the integrity-of-the-game argument anymore… because they have now gone to the sports gambling capital of America with two of the four major sports now having teams in that city. It’s over.”
The report from GamblingCompliance estimates that if 21 states allow legal betting through land-based casinos alone, the market could produce $2 billion in gross gaming revenue annually. If 37 states introduce the legislation and if betting is extended to online and retail outlets and stadiums, that predicted value jumps to $5.8 billion. It adds that just five states could account for three quarters of this revenue: Nevada, Massachusetts, Pennsylvania, Illinois and New Jersey.
The report notes that a legal market would still face restrictions, such as those set by the 1961 Wire Act. This would prohibit bets that cross state lines, so each state would be responsible for its own players.
Meanwhile, the Trump administration has come down on the side of the leagues and against New Jersey’s sports betting law. Trump Solicitor General Noel Fransicso filed a brief with the Supreme Court last week holding that New Jersey’s law violates PASPA, and that PASPA itself falls within the bounds of the federal government’s “supremacy” over state law.
The solicitor general’s brief also contends that it is not necessary for the high court to rule on the constitutionality of PASPA in whole or part, which is what is being sought by New Jersey.
Regardless of the Supreme Court’s ruling in the New Jersey case, there is a movement in Congress to repeal PASPA through legislation. The American Gaming Association, which is lobbying heavily for a legislative repeal of the law, last week observed the 25th anniversary of the law’s passage with a statement from President and CEO Geoff Freeman.
“PASPA is a failed law that has driven everyday sports fans into an unregulated, illegal sports betting market that offers zero consumer protections and fails to benefit communities or strengthen the integrity of the sports we love,” Freeman wrote.
“Much has changed in the 25 years since PASPA was enacted. Today, casino gaming is omnipresent, American attitudes toward regulated gambling are extremely favorable and there is a newfound ability to use data from legalized sports wagering to protect the integrity of games. For PASPA to remain the law of the land is to place our collective heads in the sand and willfully ignore criminal activity, the will of the people and the power of technology.
“PASPA’s days are numbered. The American Gaming Association is dedicated to working with the regulated gaming community, sports leagues and other stakeholders to finally provide sports fans with the wagering options and protections they desire and deserve.”
