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US Sports Leagues Hedging Their Bets on Legal Gambling

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Published on:
Nov/27/2017

WASHINGTON (Associated Press) — In court, all four major U.S. sports leagues are fighting New Jersey’s challenge to the federal ban on sports gambling, which the Supreme Court will hear next week.

Outside of court, leaders of three of the four leagues have made public comments that suggest they wouldn’t mind losing the case. Only the NFL has been steadfast in its opposition to gambling, a stance that critics see as hypocritical, especially as the Raiders plan a move to a billion-dollar stadium just off the Las Vegas Strip.

As the Supreme Court prepares to hear a case that could lead to the federal ban on sports betting being struck down, the leagues are hedging their bets — preparing for a future of expanded gambling and hoping to have a say in how legalization takes effect.

The NBA and Major League Baseball see gambling as something that could enhance fan interest and open up new revenue opportunities. However, the leagues insist that appropriate regulations should be put in place to prevent corruption— something that a court ruling in New Jersey’s favor wouldn’t do, at least not right way.

Much has changed since 2012, when the leagues and the NCAA sued New Jersey Gov. Chris Christie to stop him from legalizing sports betting at the casinos and racetracks in his state. At the time, MLB and the NBA were led by old-school commissioners who bore the scars of gambling scandals in their leagues, including Pete Rose in baseball and referee Tim Donaghy in basketball. Baseball’s Bud Selig said in a deposition that gambling was “evil, creates doubt and destroys your sport.”

Selig and the NBA’s David Stern have since been replaced, respectively, by Rob Manfred and Adam Silver, both of whom have taken a fresh look at gambling.

Silver argued three years ago in a New York Times op-ed that sports gambling should be legalized. Manfred said earlier this year that gambling “can be a form of fan engagement, it can fuel the popularity of a sport” — and he raised the prospect of people betting during games on whether the next pitch will be a strike. He’s also said MLB wants a seat at the table if Congress considers legalization.

NHL commissioner Gary Bettman has said gambling isn’t a major concern because so little money is wagered on hockey compared to other sports. The NHL this season became the first major U.S. league to place a franchise in Las Vegas, where sports gambling is legal, and the NFL will follow in 2019. For the past several years, the NFL has also played games in London, where people can bet on sports online. Commissioner Roger Goodell has conceded that his position on the issue has “evolved.”

“I think there are multiple signs of the sports leagues, including the NFL, taking a fresh look at this issue. You don’t place a team in Nevada, in Las Vegas, without an understanding that the issue is changing. Frankly, you don’t play games in Wembley Stadium, where most of the people in the stands are betting on their phones during the game, without an understanding that things are changing,” Geoff Freeman, CEO of the American Gaming Association, told The Associated Press. “For those that want to see sports betting, the trajectory is in their favor.”

The leagues have also embraced fantasy sports, which Goodell has argued is not gambling because players win based on the performance of individual athletes, not the outcome of games. Rep. Frank Pallone, a New Jersey Democrat and a longtime proponent of legalized sports betting, doesn’t buy that distinction.

“The NFL teams have invested in daily fantasy sports even though the NFL itself hasn’t. It’s just so inconsistent,” Pallone said. “How do you make the case and say that’s not gambling?”

New Jersey is challenging the constitutionality of the federal ban on sports betting that Congress approved in 1992. The ban only allowed sports betting in the four states that had previously authorized it, and only Nevada’s law at the time allowed bets on individual games. In Delaware, casinos offer parlay bets on NFL games.

“I go through Delaware and they allow it, and I come to my own state and they’re not allowed to do it. It’s just ridiculous,” Pallone told AP. “I think there’s a good chance that the court is going to say you can’t say to one state they can have sports betting and another state that they can’t, and then dictate what state has what.”

Opponents maintain that state-sponsored gambling preys on vulnerable people and creates a variety of social ills. A coalition of anti-gambling and religious groups argued in a brief that legalized gambling would open the door for casino companies to further “target and exploit the financially desperate, exacerbate crime, cultivate addiction, and force even those citizens who rarely or never gamble to foot the bill for the enormous social costs and state budget problems they leave behind.”

While legal sports books could entice more people to place bets, the practice is already widespread. The AGA estimates that Americans bet $150 billion on sports annually, and only 3 percent of those bets are made legally.

The technology that allows more people to place bets has also enabled data collection that makes game-fixing more difficult because suspicious betting patterns can be seen in real time. With most pro players making millions, it’s unlikely they would risk careers and jail by throwing games.

Game-fixing is much easier to stop and prosecute in countries with legal betting than in places without it, said Andreas Krannich, an executive at Sportradar, a London-based gambling security firm.

“In a well-regulated market, the risk of manipulation is less,” Krannich said, because bookmakers “participate in the detection and the follow-up of criminal cases.”

The leagues are concerned that the Supreme Court could allow sports gambling to become legal without those protections in place. NBA spokesman Mike Bass said the league “prefers a comprehensive federal approach to legalized sports betting, as opposed to a hodgepodge of state-by-state laws.”

If the court rules against the leagues, it would be up to the states to regulate gambling themselves until Congress steps in.

“The integrity of the games — and I know from my discussions — is the No. 1 priority of the leagues,” Freeman said. “We share that desire for integrity. I think increasingly, people recognize that the surest way to guarantee integrity is in a regulated market.”

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