Bloomberg: States should not push sports betting laws before SCOTUS decision
The American Gaming Association, as it has the past few years with every major sporting event, used the start of March Madness to point out the failure of the federal ban on sports betting imposed by the 1992 Professional and Amateur Sports Protection Act (PASPA).
This year’s effort is particularly significant, as the U.S. Supreme Court prepares to issue its ruling in Christie v. NCAA, a ruling that could partially or completely overturn PASPA’s sports betting ban.
In a press release and subsequent press briefing last week in Atlantic City, AGA President and CEO Geoff Freeman reported AGA’s estimate that Americans will wager more than $10 billion on the upcoming 2018 NCAA men’s basketball tournament. Of that $10 billion, only about $300 million—or 3 percent—will be wagered legally through Nevada sports books.
Thanks to PASPA, “a failed federal prohibition on single-game sports betting,” said Freeman, Americans illegally bet at least $150 billion annually on sports. “The Illegal wagering is often done through bookies, on illegal offshore websites or through sports pools, like popular March Madness basketball bracket pools,” he said.
According to a recent legal analysis, roughly two-thirds of states’ laws make it illegal to participate in sports pools, including filling out an NCAA tournament bracket, if there is money involved. Despite this, 10 percent of American adults, or nearly 24 million people, reported spending nearly $3 billion in the past year on college basketball pools alone.
“Our current sports betting laws are so out of touch with reality that we’re turning tens of millions of Americans into criminals for the simple act of enjoying college basketball,” said Freeman. “The failed federal ban on sports betting has created an illegal, unregulated sports betting market that offers zero consumer protections and generates zero revenue for state and tribal governments.
“As the Supreme Court considers the constitutionality of PASPA, AGA is focused on working with all stakeholders to put the illegal market out of business and enable a safe, legal way for American consumers to participate in next year’s office pool without fear of prosecution.”
At last Monday’s press briefing in Atlantic City, Freeman asserted that PASPA actually does what it was intended to prevent—it harms the integrity of sports by banning the ability to wager on sports “in an above-board manner.”
“Obviously, it’s time for a change,” Freeman said. “We have a unique opportunity to give consumers a safe way to do exactly what they’re doing without making them common criminals in the practice.”
Freeman added that 18 state legislatures nationwide have introduced 48 pieces of sports betting legislation, in case the Supreme Court lifts the ban. Representatives of the National Basketball Association and Major League Baseball have been lobbying those state legislatures to include an “integrity fee” that would give each league 1 percent of all wagers on its games.
While no state lawmakers have yet included such a fee in bills, Bloomberg Tax reported last week that such a fee would be particularly problematic for the NCAA, the collegiate sports body that remains staunchly opposed to any legal sports wagering.
“Even though it would be a huge windfall for the NCAA in terms of revenue, it’s also directly contrary to its stated purpose of the student athlete first,” Justin Sievert, founding partner of Sievert Werly LLC, which specializes in collegiate sport cases, told Bloomberg Tax.
Kate Lowenhar-Fisher, a Nevada-based gaming attorney with Dickinson Wright PLLC, told Bloomberg Tax such a fee could result in corruption.
“For amateur players to be put in the position who don’t have the lure of the multimillion-dollar contracts to be playing in games where the oversight authority is getting a piece of the action, I can think of a million scenarios that could do grave damage to the integrity of amateur sports,” she said.
While the NCAA declined comment for the Bloomberg article, the organization’s opposition to sports gambling is plainly stated on its website: “The NCAA opposes all forms of legal and illegal sports wagering, which has the potential to undermine the integrity of sports contests and jeopardizes the welfare of student-athletes and the intercollegiate athletics community.”
Meanwhile, as lawmakers in 18 states continue to consider sports-betting legislation, a gaming and sports law attorney commented that they are putting the cart before the horse in a way that could negatively impact the outcome of the SCOTUS case.
“I wonder what the court is thinking, seeing all of these states jump the gun and effectively telling the court how it will rule,” Daniel Wallach, an attorney with the South Florida firm Becker & Poliakoff, said during a panel session on sports betting at the International Masters of Gaming Law Conference in Las Vegas. “I think a little bit less aggressiveness would have been called for.
“All of this state activity certainly can’t be helpful (to) the ultimate outcome.”
Robert Stocker II, the Michigan gaming law attorney who moderated the panel, added that a congressional repeal of PASPA is not going to happen any time soon. “It’s not on the top 25 list in Congress and, absent something dramatic and unanticipated, Congress is not going to do diddly,” Stocker said. “There are elections this year, so nobody is going to do anything, and then there’s the presidential election in 2020. The next three years we won’t see anything at the congressional level.”
