On November 13, 2014, Adam Silver – NBA Commissioner – penned an op-ed in the New York Times endorsing legalized sports betting. This opinion was a shock to many: previously, all major sports leagues and the NCAA were diametrically opposed to sports betting. After all, the 1992 PASPA (or “Bradley Act”) defined sports betting at the Federal level, exempting sports “lotteries” in Oregon, Montana, and Delaware plus already-legal sports betting in Nevada. Only parimutuel horse racing, dog racing, and jai alai were excluded from the typical list of spectator sports. The latter two industries (jai alai and dog racing) have since declined, making them almost irrelevant.
Silver’s thesis was nothing new. He argued some “$400 Billion” was wagered illegally on USA sports annually, disappearing into the shadows of offshore sports betting websites and organized crime. If sports betting was legalized, much of this money could be recaptured and support local economies. He also stated what many already know: gambling is a more acceptable leisure activity compared to decades past. Nearly every state has some form of legalized gambling, including Native American casinos, race tracks, bingo halls, and lotteries.
…nearly $400 billion is illegally wagered on sports each year. Times have changed since Paspa was enacted. Gambling has increasingly become a popular and accepted form of entertainment in the United States. Most states offer lotteries. Over half of them have legal casinos. Three have approved some form of Internet gambling, with others poised to follow.
Source: Adam Silver New York Times Editorial
Immediately, some took issue with his “$400 billion” figure. It seemed to large to be true. Slate.com researched and debunked this number, believing the actual figure was closer to $80 billion at most. Still, Silver’s hyperbole worked, and the internet was ablaze with chatter. Sports bettors rejoiced with hope, while the NFL, NHL, and NCAA were left to consult their lawyers.
Silver also cited sports betting’s wide acceptance in Europe. While “Europe does it, too” is a tough sell to most Americans, this issue is different. Civil libertarians and advocates of small government might actually agree legalizing sports betting (like Europe) is a matter of personal liberty, provided it is well regulated and beneficial. The English can literally place bets on the Premier League from their smartphones as they walk into a football stadium. This level of accessibility – certainly frightening to more Puritan Americans – speaks to a larger paradigm shift with reasonable success in other jurisdictions. Surely the USA can do the same?
San Jose, California. NOT San Jose, Costa Rica
Silver threw some red meat to paranoid, nationalist Americans: if sports betting was fully legal stateside, the days of offshore sports books would be numbered.
More importantly, sports bettors would be placing their bets with licensed USA companies, adding an extra level of security and regulation. In other words, the horror stories of people winning big NBA bets, only to be stiffed by an offshore website, would largely disappear. Conceivably, sports bettors would have some legal recourse if something went wrong; compared to none at present.
Will the NFL, NHL, MLB and NCAA play ball?
That remains to be seen. To be honest, the NFL already has a form of sports investment. Fantasy Football websites like DraftKings.com and FanDuel.com regularly operate tournaments and leagues with cash prizes. Participants are ostensibly betting on NFL games already. FanDuel.com takes it a step further with one day fantasy football. This is ostensibly single-game football betting, disguised as a “game of skill” according to Fan Duel’s legal mumbo-jumbo.
The NFL hasn’t sent cease and desist letters to these websites yet, so we’re under the impression it’s fully legal until decided otherwise. Herein lies a critical question: is traditional sports betting such a big leap from one-day fantasy leagues? We don’t think so. In fact, one could argue one day fantasy sports are a perversion of sports betting, and not some newfangled creation of brilliant marketing minds. Penny auction sites come to mind as a quasi-legal analogy.
Will Silver strike Gold?
Not yet, although the NBA stands to profit if they allow USA based sports books to advertise during their games. They would charge a special premium, of course, because sports gambling is generally a profitable enterprise.
Silver closes his editorial with a promise to ensure “the integrity of the game”[paraphrased]. This is a CYA statement for any pro-gambling propaganda. In reality, it isn’t usually the sports books that are buying off referees or paying basketball players to shave points. More often than not, it’s gambling syndicates, the players themselves, and organized crime. Of course, it wouldn’t be the purview of the NBA to police betting activity. They would only collect their advertising dollars, and occasionally banish someone “Pete Rose” style if caught betting on the game.
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