The Supreme Court’s Ruling On Sports Gambling Just Opened Pandora’s Box
Imagine watching the NBA finals and hearing Marv Albert say, “Lebron James steps up to take a free throw he currently has $1.17 odds that he will make this shot, and $1.08 odds to be the highest scoring player tonight.”
Kevin Harlan quips in, “Right you are Marv, but place a bet now for the trifecta for the top three scoring players, and you could win $25,000 tonight, brought to you by BetGame.”
Lebron makes the shot and now here comes a commercial break with Samuel L Jackson yelling at you to place bets on all your favorite sports. This might seem like a dystopian satire, but it’s a world that could be right around the corner.
On May 14th, 2018 in a decision of 6 to 3 with one dissenting half vote from Justice Breyer the 1992 Professional and Amateur Sports Protection Act (PASPA) was ruled unconstitutional. From the court’s own words,
The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA “regulate[s] state governments’ regulation” of their citizens, New York, 505 U. S., at 166. The Constitution gives Congress no such power. [pdf cite]
To paraphrase, we as Americans have opened the pandora’s box of legal sports gambling and are allowing states to self-regulate.
In its decision, Justice Ginsburg noted that the complete dismantling of PASPA may not have been the wisest course of action, in her dissenting vote she added, “The Court wields an axe to cut down §3702 instead of using a scalpel to trim the statute.”
During its inception, the original purpose of PAPSA was to protect athletes and teams from the corruption and pressures of gambling while also keeping the emphasis on the enjoyment of the game for spectators.
Senator Orrin Hatch of Utah, one of the original co-authors of the PASPA said shortly after the Court’s decision,
“The rapid rise of the internet means that sports betting across state lines is now just a click away,” he said. “We cannot allow this practice to proliferate amid uneven enforcement and a patchwork race to the regulatory bottom. At stake here is the very integrity of sports.”
For one of those rare occasions, I agree with a GOP senator, Sen. Orrin is correct. Regulatory approval in one state will undoubtedly have repercussions for residents of another state who want to gamble. Sports gambling has been around for a while, in fact, most of us can bet on our smartphones right now.
The core issue is not if gambling should be legal or illegal but instead about what kind of regulation and tax laws will govern sports gambling now that the floodgates are open. Congress has a fleeting opportunity to start fresh and introduce legal sports gambling to America by learning from the Supreme Court decision, and from the approach other countries made towards sports gambling.
In Australia, it’s not the crocodile or the snake that will get you
We can look to our cousins in Australia who have shown us how not to handle sports gambling. Little to no federal regulation in Australia has left the country bare-naked to the dangers of gambling. Australians gamble more per capita than any other nation on earth. Down under, sports gambling continues to grow rapidly, 13% from 2015 to 2016, as a lack of federal courage keeps giant gambling companies untethered.
For Aussies, losses have nearly reached $1,000 US dollars per person per year. Gambling advertising has become so prevalent that UNICEF is pleading to the Prime Minister to protect children from sports gambling. Associate Professor Samantha Thomas at Deakin University in Australia found that 75% of Australian children (aged 12-17) think gambling is a normal part of sports, and 15% of youths who gamble are already developing an addiction.
These kinds of dystopian statistics are not fictitious fear-mongering tactics but legitimate first world problems. One of the leading academics in problem gambling Dr. Charles Livingstone of Monash University says that regulating the gambling industry and advertising at a federal level would most certainly be a positive step to curb the growth of these statistics.
Remember Samuel L Jackson yelling at you to place bets? In Australia, it’s a reality.
Maybe at this point, you are thinking surely the sports leagues will try and save the sports from becoming gambling circus shows? Not quite, the sports leagues like the NFL, MLB, NHL, NBA, and NCAA are more focused on getting their cut of the pie.
‘Integrity fees’ is the new word on the street, which means the sports leagues are looking for around 1% of all bets made so they can ensure that the integrity of the sport isn’t compromised by gambling. If that sounds like the most counter-intuitive cash grab you’ve ever heard, you’re not alone.
Also, mind you, none of these leagues has ever asked for integrity fees before in Nevada where sports gambling has been legal for decades. As you can imagine none of the Nevada casinos and gambling corporations are willingly giving up 1% of revenue.
A quick move by Congress to pass a bill with some general guiding laws is desperately needed. With the introduction of regulation by Congress to blanket basic gambling principles taxes can be raised from the standard 12% for casinos and racetracks to a higher 25% normally seen on slot machine profits. Then we could use some of that money to create rehabilitation programs for those addicted to gambling and a federal gambling body that can enforce these new laws.
These laws should also extend to our college sports leagues. The NCAA and any collegiate sport need to be wholly exempt from sports gambling. Imagine being a perfectly average freshman division 1 college athlete, but you just missed a clutch tackle or layup. Right after the game you then have thousands of messages on social media from unhinged addicted gamblers about how you’ve ruined their life, and they want you to pay.
In my sports gambling dreams, people get to legally gamble on sports; teenage athletes are protected, we tax casinos and sports betting companies at a higher rate, then we use that money to create jobs for social workers and public servants to protect gamblers and the youth of America.
In 2018 is that so much to ask?
The faster Congress acts, the easier it will be to regulate. Once states begin to divide up their own rules the harder it will be to dismantle later down the road. Already first out the gate (pun intended) was the Mississippi State Gaming Commission which took only 3 days to introduce the first regulatory policy for sports gambling and is currently open for public comment.
New Jersey, Connecticut, New York, California and many other states are looking to follow suit as they race for the start of the NFL season in August. Many native American owned casinos are also looking to fast-track negotiations as soon as possible to avoid missing out on the gambling gold rush.
Sports gambling is about to go mainstream, and we are currently sitting in the calm before the storm. The director of the law program at Tulane Law School Gabriel Feldman aptly put the Supreme Court’s decision, “This is a dry constitutional issue about states’ rights, but it will likely change how we have viewed sports for the past 100 years.”
It is now up to our historically dysfunctional Congress to pass some meaningful regulation to prevent sports gambling from descending into chaos; this regulatory issue should be an easy slam dunk for both sides of the aisle.