Sport

US paves way for sports gambling but not everyone is happy

Supreme Court has struck down the law banning sports betting in most states

Sports betting will now become legal across the US, opening the door to a hugely lucrative market for bookies. (Photo: Michael Zagaris/Getty Images)

Adam Liptak
Kevin Draper
Tue May 15 2018 - 09:46

The Supreme Court in the US struck down a 1992 federal law on Monday that effectively banned commercial sports betting in most states, opening the door to legalising the estimated $150 billion in illegal wagers on professional and amateur sports that Americans make every year.

The decision seems certain to result in profound changes to the nation’s relationship with sports wagering. Bettors will no longer be forced into the black market to use offshore wagering operations or illicit bookies. Placing bets will be done on mobile devices, fueled and endorsed by the lawmakers and sports officials who opposed it for so long. A trip to Las Vegas to wager on March Madness or the Super Bowl could soon seem quaint.

The law the decision overturned — the Professional and Amateur Sports Protection Act — prohibited states from authorising sports gambling. Among its sponsors was Senator Bill Bradley, Democrat of New Jersey and a former college and professional basketball star. He said the law was needed to safeguard the integrity of sports.

But the court said the law was unconstitutional. “It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals,” Justice Samuel A Alito Jr said, writing for the majority. “A more direct affront to state sovereignty is not easy to imagine.”

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Across the country, state officials and representatives of the casino industry greeted the ruling with something like glee, nowhere more than in New Jersey, which anticipated the decision and had been prepared to quickly take advantage of it.

In 2011, the state’s voters passed a constitutional amendment in favour of legalising sports betting, and three years later, the Legislature repealed its law against sports betting. Both were challenged in court. But now the Legislature only has to pass a law establishing the rules and regulations for sanctioned sports betting to begin at casinos and racetracks in the state.

A spokesman for Governor Philip D Murphy said his office sent a proposed bill to the Legislature weeks ago and has been negotiating behind the scenes in anticipation of a favourable ruling from the court. Stephen M Sweeney, the State Senate president, said people in New Jersey would “definitely” be able to bet before June 30th.

That would give the state a head start in joining Nevada, which was granted an exemption under the 1992 law, in allowing sports betting. But five states — Connecticut, Mississippi, New York, Pennsylvania and West Virginia — have recently passed sports betting laws, and similar legislation has been introduced in at least another dozen states.

“This is a dry constitutional issue about states’ rights, but it will likely change how we have viewed sports for the past 100 years,” said Gabriel Feldman, the director of the sports law programme at Tulane Law School.

“It’s called the gamblisation of sports,” he added. “Fans will become much more focused on gambling than following a team. It will make every second of every game of every week interesting to fans as it will give everyone something to root for.”

The American Gaming Association, a trade group that represents casinos, predicted that the ruling would generate revenue without endangering the integrity of sports competitions.

“Through smart, efficient regulation, this new market will protect consumers, preserve the integrity of the games we love, empower law enforcement to fight illegal gambling and generate new revenue for states, sporting bodies, broadcasters and many others,” the group said in a statement.

The ruling in Murphy v. National Collegiate Athletic Association, No 16-476, is also likely to be a boon for media and data companies that have existing relationships with the major sports leagues. They include television networks like ESPN, which is likely to benefit from more fans having a more deeply vested interest in the action — resulting in higher ratings.

In addition, an entire industry has been created anticipating this kind of sweeping change. It includes data companies like Sportradar, which compiles and distributes instant information. Sportradar already has a relationship with the NFL and the NBA, as well as the International Tennis Federation.

Not everyone was enthusiastic about the decision.

“The court’s decision is monumental, with far-reaching implications for baseball players and the game we love,” Tony Clark, the executive director of the Major League Baseball Players Association, said in a statement. “From complex intellectual property questions to the most basic issues of player safety, the realities of widespread sports betting must be addressed urgently and thoughtfully to avoid putting our sport’s integrity at risk as states proceed with legalisation.”

But the ruling confirmed what professional sports leagues like the NBA and Major League Baseball have come to accept in recent years — that no matter how hard they resisted, legalised sports wagering was inevitable. The leagues and their teams long fought efforts to make it so, because, among other reasons, they were not assured of being able to directly tap into the new, vast revenue stream.

Officials across sports have for years complained that legalised wagering would lead to the corruption of their games through match-fixing, though there is no indication that is a realistic concern. Sports betting is legal and wildly popular in Britain, for example, but the integrity of the Premier League has not suffered. In fact, legalising gambling allows companies and leagues to monitor gambling patterns and flag betting irregularities that could suggest corruption.

In recent years, the professional sports leagues have taken varying positions. Nominally, they are all against it: When New Jersey repealed its law against sports betting, the NBA, the NFL, the NHL, and the MLB, as well as the NCAA, which governs college sports, joined together to sue the state. They were on the losing side of Monday’s ruling.

While the NFL and the NCAA have been the most steadfast in their stance against legalised sports betting, the NBA long ago concluded that public opinion had shifted, that bringing the gray- and black-market betting into the legal market would be the best way of preventing match-fixing, and that there is money to be made for the leagues.

In 2014, Adam Silver, the NBA's commissioner, wrote an Op-Ed for The New York Times advocating the legalisation and regulation of sports betting. In an appearance for a New York Senate committee in January, a league official laid out the NBA's opinion on its ideal sports betting legislation that would, among other things, establish monitoring to detect unusual betting activity; impose a one percent "integrity" fee on bets that would be paid to sports leagues; and authorise digital betting platforms in addition to brick-and-mortar casinos.

In the months since, the NBA and the MLB have toured state legislatures lobbying lawmakers for the rules.

The leagues are not the only stakeholders trying to shape legislation. Unions representing professional athletes like the baseball players’ association have demanded a seat at the table, while casinos and gambling trade groups have opposed any calls for an integrity fee. Native American tribes, which generate over $30 billion in casino revenue annually, have mostly taken a wait-and-see approach to sports betting, but will surely want a say in how laws are crafted.

Finally, there is always a chance Congress could get involved.

“Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own,” Justice Alito wrote in his majority opinion.

In statements released after the Supreme Court’s ruling, both the NBA and the NFL called on Congress to pass a federal sports betting law, and Senator Orrin G Hatch of Utah, one of the original authors of the law struck down on Monday, said he planned to introduce federal legislation regulating sports betting.

Justice Alito said there were good policy arguments on both sides about whether to legalise sports betting.

“Supporters argue that legalisation will produce revenue for the states and critically weaken illegal sports betting operations, which are often run by organised crime,” he wrote. “Opponents contend that legalising sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports.”

But the question for the Supreme Court, Justice Alito wrote, was whether Congress had crossed a constitutional line in forcing states to do its bidding. Five justices agreed with every part of his opinion, and Justice Stephen G Breyer with much of it. Justice Ruth Bader Ginsburg, joined by Justice Sonia Sotomayor, dissented, saying the majority had ruled too broadly.

“The court wields an ax,” Justice Ginsburg wrote, “instead of using a scalpel to trim the statute.” –New York Times service