Sports leagues dance a little closer to gambling
Monday, January 29, 2018
As gamblers, both serious and casual alike, prepare to lay down some $5 billion in wagers on this weekend's Super Bowl, a tectonic shift in sports wagering is taking place under foot. Once outwardly opposed to relaxed sports gambling laws, the major sports leagues in the U.S. are rethinking their positions — led by the NBA, which recently made its pro-wagering stance quite clear.
Last week, an NBA attorney proposed to New York state lawmakers a set of legalized gaming rules that would include 1 percent of each wager passed back to the league. It's the latest, and boldest, move by the NBA to support a change to the Professional and Amateur Sports Protection Act (PASPA) of 1992.
With the NBA throwing its support behind legalized sports wagering, will the other leagues follow?
Sports and gambling — the uneasy dance
Professional sports leagues in the United States have long held gambling at arms' length, publicly opposing wagering on games while showering in the interest it brings to the sports. There's a reason the NFL has a stringent policy on teams reporting injuries, and it isn't so the 24-hour news channels have something to discuss.
If you don't think gambling drives interest in games, look into the amount wagered on University of Hawaii home football games. It isn't because that many people are huge Hawaii football fans — it's because the midnight Eastern kickoff gives gamblers one last chance to save, or cap off, their wagering day.
The leagues are well aware of how deeply wagering plays into interest. Even so, the four major sports in the U.S. — NFL, NBA, MLB and NHL — all supported and testified for the current law that prohibits it. PASPA, also commonly known as the Bradley Act, essentially outlawed sports gambling in all states but Nevada, though it allowed certain provisions in Oregon, Delaware and Montana.
In recent years, there have been a number of challenges to the law, perhaps most notably in 2011 when New Jersey voters passed a constitutional amendment allowing wagers on sports. The major sports leagues opposed it and filed suit to halt it. The courts routinely ruled against the state.
But a groundswell of support for repealing — or at the very least revisiting — PASPA has advocates thinking the tide may have turned. In fact, a Washington Post poll in August 2017 found that, for the first time, a majority of Americans support legal wagering on professional sports.
Attitudes may be changing in front offices of leagues as well, and the carrot of massive revenue windfalls could have the leagues pivoting faster than a Steph Curry crossover.
NBA steps forward
The NBA has led the charge of the big four. Current NBA commissioner Adam Silver took to The New York Times opinion pages in November 2014 arguing in support of legalized and regulated sports wagering.
"For more than two decades, the National Basketball Association has opposed the expansion of legal sports betting, as have the other major professional sports leagues in the United States," Silver stated, before making a case that "Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards."
Other leagues have also started to show signs of loosening their stance of opposition.
In February 2017, Major League Baseball Commissioner Rob Manfred told Yahoo Finance that betting "can be a form of fan engagement, it can fuel the popularity of a sport," while admitting that a legal, regulated approach to sports gambling might be favored to all the illegal betting action that takes place.
With the establishment of franchises in Las Vegas, the NHL and NFL have both thawed their hardline stance on keeping the respective leagues out of sports gambling's Mecca — no small symbolic gesture.
But the NBA's clear move forward this past week will likely soon force the other leagues to take a more firm stance, and the lure of direct revenue from sports wagering will most probably result in their stances coming as little surprise.
The pros and cons
As pro sports leagues deal with declining TV ratings and fragmentation of audiences, a steady stream of revenue from wagering would be welcome, but age-old questions arise.
How can a league with direct ties to wagering on its events ensure the legitimacy of its outcomes? Match-fixing scandals have infiltrated European soccer leagues as well as tennis in recent years. American sports leagues aren't void of their own scandals. Would the likelihood of tampering increase if wagering became legal?
Legal sports wagering already exists in places like England, where you can even bet on soccer matches at the games themselves. Other countries have had legal sports wagering for years, so the precedent exists, even in countries that send a portion of the action back to the leagues.
This begs another question: Why do the leagues need or deserve a piece of the action?
The American Gaming Association (AGA), a lobbying outfit that has advocated for legal sports gambling for years, not only poses that question but also answers it. In a statement clarifying its position on the NBA's recent proposal, the AGA noted, "Let's get real about eliminating the illegal market, protecting consumers and determining the role of government — a role that most certainly does not include transferring money from bettors to multibillion-dollar sports leagues."
The NBA retorted with its own statement: "Sports leagues provide the foundation for sports betting while bearing the risks it imposes, even when regulated. If sports betting is legalized federally or state by state, we will need to invest more in compliance and enforcement, and believe it is reasonable for operators to pay each league 1 percent of the total amount bet on its games to help compensate for the risk and expense created and the commercial value our product provides them."
Of course, the leagues aren't the only ones that stand to profit from a legalized and regulated gambling industry. Tax revenues could incentivize the government to look differently at sports wagering this time around.
Several states are already putting wheels in motion to pursue sports gambling should the federal government overturn or repeal PASPA. Sara Slane, vice president of public affairs for the AGA, noted that 15 states have introduced or enacted legislation to authorize sports gambling if the ban is overturned.
With so much money at stake, it's easy to see changes coming. Consider that the AGA estimated $4.7 billion was wagered on the Super Bowl last season. The NFL and the other pro sports leagues would benefit greatly from a cut of that action.
But how swiftly will organizations that have always opposed partnering with the gambling industry advance these potential interests, and how much will they spend to do so?
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