Several states are closely watching the results of a Supreme Court challenge from New Jersey that could legalize sports betting.
Members of the administration of Delaware Governor John Carney last week indicated that the First State is aiming to be the first state outside of Nevada to offer full-blown sports betting.
The Carney administration is drafting a plan to offer bets on all professional and out-of-state college sports events, including prop bets and single-game events, within weeks of any decision from the U.S. Supreme Court that repeals the federal ban on sports betting imposed by the 1992 Professional and Amateur Sports Protection Act (PASPA), reports Delaware’s News Journal.
“If we can get to market faster than some of our neighbors, there could be some real upside,” state Finance Director Rick Geisenberger told the newspaper. “We’re working to roll it out as quickly as possible.”
Delaware is one of four states with grandfathered sports-betting programs in place, but the program is limited to three-game parlays on NFL games. Only Nevada offers full-blown sports books.
Of course, nearby New Jersey—whose 2014 sports betting law is being challenged by the major sports leagues in the Supreme Court case—would be just as likely to be first with a sports betting program following a repeal of PASPA. The sports-betting law is already in place. However, some argue that Delaware also has a sports-betting law in place, one that would have established full sports books in the state’s racinos. It was struck down by the courts as a violation of PASPA.
Meanwhile, more prominent professional sports owners have come out in favor of legalized sports betting. Ted Leonsis, owner of the NHL’s Washington Capitals, the NBA’s Washington Wizards and minor-league teams covering several sports, told ESPN 980 host Bram Weinstein last week that the National Football League—whose officials are most adamantly opposed to sports betting—will face “implosion” due to eroding fan interest, unless sports betting is introduced.
“To me, (sports betting) is the only thing that will save the NFL,” Leonsis said.
Leonsis joins Commissioner Adam Silver, Dallas Mavericks owner Mark Cuban and other NBA officials in publicly favoring legalized sports betting.
In Massachusetts, Stephen Crosby, chairman of the state Gaming Commission, told the Boston Globe: “There is a school of thought that there’s going to be a competitive situation. Which states are going to get going and try to get a piece of this action? If the Legislature wants to move quickly, we’d like to tee it up for them and say, ‘Here’s what the issues are.’”
The commission has instructed its staff to prepare a briefing paper to lay out the options for sports betting to the state legislature.
Three casinos have been licensed in the state. Of these, Penn National Gaming is making the most positive noise about the prospect of offering sports book. Penn operates the first—and so far, only—casino in the state, Plainridge. However, that monopoly will end in September when the $950 MGM Springfield opens. Penn is working with a task force organized by the American Gaming Association that wants to have legislation available for states that want to enter the market without delay.
The association estimates that Americans illegally bet $150 billion on sports book annually.
Robert DeSalvio, president of Wynn Boston Harbor, the $2.4 billion casino rising in Everett, told the Globe “Our industry supports legalized and regulated sports betting, but the ultimate decision rests with the courts, state and federal lawmakers, and the Massachusetts Gaming Commission.”
Crosby, who says his commission is cooperating with other jurisdictions on this issue, calls the anticipated ruling a “new hand grenade coming over the wall,” that no one except New Jersey is prepared to deal with. “We don’t want to have, as we do in [casino] gaming, a whole bunch of different jurisdictions with different regulatory requirements. We’re trying to figure out if we can standardize going forward,” he said.
He notes that currently people in the state are betting on an activity that he calls unsafe, and unregulated—not to mention untaxed.
In Indiana, state Rep. Alan Morrison announced he will sponsor a measure to legalize sports betting in the state, if the U.S. Supreme Court rules in favor of New Jersey in the case Christie v. National Collegiate Athletic Association. The state has sued to have the Professional and Amateur Sports Protection Act declared unconstitutional. The 1992 law makes sports betting illegal in most states. More than 10 states are poised to allow sports betting if the high court decides for New Jersey.
In Indiana, however, the Indianapolis-based National Collegiate Athletic Association has declared its opposition to all forms of sports gambling. In fact, the organization does not allow any of its championship events to be played in Nevada. Its website states, “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.”
At a recent Indiana legislative preview conference, Morrison said, “I understand where they’ll be coming from. But it’s also important for the NCAA to understand that the landscape of gaming is changing throughout our country. I think they would hopefully have some understanding that Indiana would have rights just like the other states.” He stated restricting college bets in Indiana “would be a pretty big burden” for gaming facilities in the state.
In 2016, Morrison was involved in making Indiana the second state to pass a law regulating daily fantasy sports. Today DFS betting is legal in 18 states. At that time the NCAA lobbied to have DFS contests based on college events excluded from the Indiana law under an agreement with DraftKings and FanDuel.
Still it seems the NCAA has been considering its options if the Supreme Court strikes down the ban. The topic was a subject at the annual meeting of the Division I Athletic Directors Association in September. NCAA President Mark Emmert said, “We’ll cross that bridge when we come to it. Obviously, if you wind up with sport gambling everywhere in the country then we’re not going to stop playing championships. We’ll play wherever we have to. But we’ll cross that bridge when we get to it.”
Emmert has floated a proposal, similar to the Indiana law, to lobby states to exclude collegiate sports if federal sports-betting ban is lifted. But observers said it’s unlikely the NCAA could win a similar carve-out for championship events in any state the passes a sports betting law.
Michael Pollock, a consultant at Spectrum Gaming Group who also attended the preview conference, noted, “Sports betting is simply far more acceptable than it ever was and that’s only going to continue. Whether it happens with a dam bursting, through a Supreme Court decision, or it happens more gradually, it’s going to happen.”
Indiana Gaming Insight Editor Ed Feigenbaum, who also attended the legislative conference, added the NCAA has “this ‘too big to fail’ influence here with all of the Final Four events. Is this something that will influence the legislature one way or another? Will they be able to use this as leverage by saying, everyone else is going to have sports betting, it’s going to be online so you don’t need to do it in Indiana.”
About a dozen states–including Indiana’s neighbors Kentucky and Michigan–have introduced sports-betting legislation in anticipation of the Supreme Court decision, and several have passed bills requiring state gaming boards to set rules for licensing and registration. Several of the dozen-plus casinos and racinos located in Indiana have indicated they would be interested in offering sports wagering if the Supreme Court strikes down the federal ban.
The American Gaming Association estimates every year at least $150 billion is illegally wagered on sports.
Texans are unlikely to be able to plunk down Super Bowl or Final Four wagers with legal neighborhood bookies for the foreseeable future, even though the U.S. Supreme Court could open the door for sports betting nationwide as early as this spring by overturning the federal law that bans it in most states.
Observers consider it a long shot that Governor Greg Abbott or the legislature would support legalization of sports betting in Texas if given the opportunity—despite a jackpot, in terms of economic impact, that’s potentially large.
A legal, regulated sports gambling market in Texas could boost the state’s economy by about $1.7 billion annually and create more than 9,300 jobs, according to a study touted by the American Sports Betting Coalition, a lobbying group.
Critics counter that it also could bring negatives, such as a need for more social services to help people with gambling-related problems, as well as increased government bureaucracy to oversee the industry.
Regardless, it’s a debate that faces steep odds against getting off the ground in Texas — no matter how the Supreme Court ends up ruling in an ongoing challenge by New Jersey to the federal Professional and Amateur Sports Protection Act, which effectively outlaws full-fledged sports gambling in every state but Nevada.
“The biggest base of opposition (to the expansion of legal gambling in Texas) is a moral one and comes from political conservatives — and they are a powerful constituency in the state right now,” said Jim Henson, director of the Texas Politics Project at the University of Texas. So “you have to look at the chances being pretty slim at this point.”
Republicans control Texas state government, and the official Texas GOP platform states flatly that “we oppose the expansion of legalized gambling.”
A spokesperson for Abbott, a Republican who is running for re-election in 2018, didn’t respond to requests for comment regarding his position on sports gambling in Texas if the federal ban is overturned.
The Supreme Court heard oral arguments in the New Jersey case — dubbed Christie v. NCAA — on Dec. 4, and a decision is expected in the spring. If the court finds the federal law to be unconstitutional, each state might be able to decide for itself whether to legalize and regulate sports gambling within its borders, although a narrower ruling also is possible.
Texas has strict anti-gambling laws that limit legal gambling mainly to the state lottery, some pari-mutuel wagering on horse and dog races and so-called “social” gambling, such as charity bingo. A small number of casinos operate on Native American lands in Texas, although the state has periodically mounted legal challenges to some of those facilities.
Still, Texas Attorney General Ken Paxton has joined attorneys general and some governors from 20 other states in signing onto a Supreme Court brief supporting New Jersey in its fight to overturn the federal law prohibiting sports betting in most places. Paxton appears to have done so based solely on the issue of states’ rights, however, and not because of a desire to see sports gambling flourish in Texas.
Paxton, a Republican who also is running for re-election next year, has previously taken a hard line against even the hint of sports wagering in the state, issuing an opinion in 2016 that commercial fantasy sports leagues constitute chance-based gambling — instead of games of skill — and thus are illegal under Texas law.
Participants in commercial fantasy sports leagues pay entry fees, pick teams from rosters of athletes and then compete to win prize money based upon the statistical performances of their players, such as yards gained and touchdowns scored in football.
Through a spokesperson, Paxton declined to comment on his support for New Jersey in the larger sports-gambling case, although in October he called the federal law unconstitutional and said that “it tramples on state sovereignty.” He made the comments to members of the American Sports Betting Coalition, an offshoot of the American Gaming Association formed to muster political momentum to convince Congress to repeal the ban, and his quotes are included in advocacy material on its website.
“By ending (the federal ban), states can rightfully decide whether they want regulated sports betting or not,” Paxton said then.
The Professional and Amateur Sports Protection Act prohibits states from enacting new laws to regulate sports gambling — which basically bars any from legalizing it if they hadn’t already done so before the act was approved in 1992. Nevada is the only state with full-fledged sports gambling because it had previously been established there, although Delaware, Montana and Oregon can have sports gambling in limited forms.
Casey M. Clark, an American Gaming Association spokesman, said his organization is happy to have allies in its bid to kill the law.
“We aren’t pushing states to pursue (sports) gaming,” said Clark, whose organization has also weighed in to support New Jersey in its Supreme Court fight. “We just want them to have the opportunity. Our goal is to remove the failed federal ban on sports betting and allow states and tribal sovereign nations to decide what is right for them.”
The American Sports Betting Coalition contends that lifting the federal ban and allowing states to legalize gambling on sporting events would be a financial boon, with a potential nationwide economic impact of up to $26.6 billion annually that would generate combined new tax revenue of up to $5.3 billion a year for federal, state and local governments.
Such a move also would pull a large but illegal sports betting market out of the shadows and allow it to be regulated and monitored, the group says. Because of the current ban in most states, the gaming association estimates that U.S. gamblers place almost $150 billion annually in illegal wagers on sporting events.
The federal prohibition “has perpetuated a massive (illegal) market,” Clark said. “It hasn’t done what it was purported to do, which is stop sports betting.”
Still, a serious push in Texas to make it legal to wager on sporting events — provided the Supreme Court overturns the federal ban and renders it possible — might be about as likely as drawing a straight flush.
Texas lawmakers have shown little appetite for expanding the various forms of gambling that they already can control. For instance, a number of proposals in this year’s legislative session to allow more casinos in Texas didn’t gain traction, nor did a measure that would have legalized the operation of commercial fantasy sports leagues.
“I think a pretty good chunk of the (Texas) Senate and the House would be against” legalized betting on sporting events, said JoAnn Fleming, executive director of Grassroots America-We the People, a tea party-aligned organization that has the ear of conservative Texas lawmakers. “It would face an uphill battle.”
Fleming said she personally opposes gambling and considers legalizing it to be bad public policy, saying, among other things, that it fuels increased government spending on regulation and social services.
