AGA: Legal market could replace 0 billion in illegal wagers
A new study published by GamblingCompliance.com predicts that, should the U.S. Supreme Court strike down the federal ban on sports betting, the U.S. sports betting market would reach $2 billion in annual gross gaming revenue within five years of the end of the ban.
The U.S. Supreme Court is scheduled to hear arguments this fall in the appeal of a lawsuit challenging a New Jersey law authorizing a state-regulated sports betting program. The state—as well as the American Gaming Association, which filed an amicus brief in the case—argues that the 1992 Professional and Amateur Sports Protection Act (PASPA) is unconstitutional, in that it violates states’ rights by forbidding states from passing sports-betting laws.
PASPA bans sports betting in all but four grandfathered states. Of those states, only Nevada has full single-event sports wagering; the others have multi-game parlay bets.
The Gambling Compliance report, titled “Outlook: U.S. Sports Betting,” maps the likely size and scope of the sports-betting market should the justices strike down PASPA. It predicts a state-by-state rollout of sports betting, with Pennsylvania likely the largest market initially, followed by Illinois, Massachusetts and New Jersey, all surpassing the current size of the Nevada legal sports-betting market. The study predicts that California, potentially the largest sports-betting market, would experience more difficulty in passing a sports-betting law.
The report uses $2 billion as a baseline prediction, but includes a second, more optimistic projection stating that a best-case scenario could see sports-betting revenue reach as high as $5.8 billion within five to seven years. The revenue projections are based on data from Nevada and from established sports-betting markets in Europe.
The AGA, meanwhile, has predicted the income from sports betting could ultimately be much higher than $2 billion, citing the fact that some $150 billion is wagered illegally on sports in the U.S. every year.
The case before the Supreme Court is a lawsuit initially filed by the major sports leagues and the NCAA after New Jersey Governor Chris Christie signed a bill into law authorizing sports books at Atlantic City casinos. Lower courts sided with the leagues in ruling that New Jersey’s law violates PASPA.
Most of the leagues have softened their stance on sports betting, with commissioners of the NBA and NHL in particular stating that the federal ban should be re-examined. The National Football League, however, has been steadfast in its opposition to legal sports betting. After NFL TV ratings were down 13 percent for the first week of the season, media analysts commented that legal sports betting could be a remedy to sagging viewership. (The NFL blamed the recent hurricanes for the dismal debut week.)
Roughly a dozen states have introduced legislation this year that deals with sports betting. Gambling Compliance assumes 21 to 37 states will offer legal sports betting within five to seven years after PASPA is lifted, producing the revenue range of $2 billion to $5.8 billion.
