Millions of Americans spend billions of dollars each year on illegal sports betting. It’s time to make it legal.
I haven’t placed a bet in years, but I have vivid memories about illegal betting.
Back then, the states didn’t run lotteries; the mafia did.
My first encounter came when I was six or seven years old. My grandparents ran a neighborhood convenience store, and one day I heard them talking about “the numbers” and something they called “The Black Hand.” That conversation made no sense to me, but their faces told me they were concerned.
With age, I realized that my grandparents were associated with illegal gambling—certainly not by choice, but by requirement. Local mafia guys, “The Black Hand,” forced them to sell what we now call “lottery tickets” (i.e., the numbers game).
About 15 years later I had another run-in with illegal gambling. Hungry after driving for hours, I stopped at a small town convenience store that had this sign out front: “Sub Sandwiches Served.”
I went in, sat down at the counter, and asked the waiter for “a roast beef sub, please.” He looked around and then reached underneath the counter. What I got wasn’t a sandwich. It got a parlay card, instead—a list of that weekend’s college football games replete with point spreads and boxes to check for preferred teams.
“Roast beef sub,” I soon realized, was code for sports gambling.
I laughed at first, telling the guy I really did want a sandwich. But, truth be told, I took the card and made my picks while munching on a ham and cheese sub (they didn’t serve roast beef after all).
I lost that weekend and never played “the cards” again. But I did come away from those two experiences flummoxed by a question: “Why does America tolerate illegal marketplaces when it could (and really should) legalize those activities?”
For decades I’ve believed that the government shouldn’t tolerate illegal marketplaces when the underlying acts are widespread in society. I was an early proponent of the public lottery system (even though I’ve never played). I hope that America will soon legalize recreational marijuana use (even though I’ve never “smoked”).
Courtesy: GGB Magazine
And, so, as you might expect, I was pleased this week when the Supreme Court paved the way for establishing a public alternative to the estimated $150 billion dollar-per-year illegal sports betting industry. (Note: Ohio State University economist, Jay L. Zagorsky, believes that the industry isn’t that large.)
No matter the market size, what really gives me hope—delight, is a better word—is the legal underpinnings of the SC ruling.
As T.J. O’Hara writes, the Court did NOT legalize sports betting in Murphy v. NCAA, the case on which the Court ruled. “It ruled,” O’Hara continues, “that the decision of whether to authorize sports betting resides with the states.”
The Court based the majority opinion on its interpretation of two planks—The 10th Amendment and The Anti-Commandeering Doctrine—provisions that could come into play in the quest to legalize other domains of interest, including the recreational use of marijuana.
The 10th Amendment reads thusly: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” In its majority opinion, SCOTUS concluded that the prohibition of sports gambling had not been delegated by the Constitution or sufficiently restricted by Congressional action. Consequently, the Court ruled as unconstitutional The Professional and Amateur Sports Protection Act (PASPA) of 1992. That Act had outlawed betting nationwide except in four states—Oregon, Montana, Delaware, and in licensed sports parlors in Nevada.
The State of NJ brought the suit heard by SCOTUS (language courtesy of Rockefeller Institute of Government)
The Anti-Commandeering Doctrine is based on two other rulings—New York v. United States (re radioactive waste disposal) and Printz v. United States (re gun distribution and use). It declares that the Federal government can’t impose itself via coercive means on state legislators and/or state-level executives. This doctrine protects states against possible Federal overreach.
I know there are plenty of details to be worked out to make legal gambling a reality, including the very real possibility that different states will enact different policies. For that reason, Congress appears to be motivated (finally!) to enact Federal legislation regarding gambling oversight.
Another gigantic political issue to be ironed out involves who gets what cut of the considerable financial action that will follow, including whether sports leagues will be included. Those entities fought in public against gambling legalization but, behind the scenes, several pro leagues–the NBA and MLB–worked diligently to pave its way.
Courtesy: newyork.cbslocal.com
NBA commissioner Adam Silver has been the most outspoken about getting a cut, arguing that gambling on pro basketball is only possible because of property held by the league. Calling the potential NBA cut “an Integrity Fee” (Don’t you love language?), Silver asserts that “as intellectual property creators, a 1% fee (to the NBA) seems very fair to me.”
But at the end of the day, the most important issue never changes—millions of Americans spend billions of dollars each year betting on sports illegally. Legalizing that activity, which includes regulation, oversight, and legal sanctions, is the way to go—and the only way to go, as I see it. It’s time for change.
And what impact might this “big change” have on America? To get a handle on the answer, a comparison to legalized sports betting in the UK seems reasonable. Tariq Panza of The New York Times has done that. Panza reports that sports wagering in Britain totaled nearly $20 million dollars last year, and there are as many as 500 different betting lines on a single game. Even Queen Elizabeth is known “to fancy a flutter.”
For me, I like the way Jason Gay of The Wall Street Journal put it:
“Be wary of the hyperbole from both sides. The court has made a significant ruling and the potential money is inarguable. But it’s probably not the end of the world or the dawn of a brilliant new one. More likely it’s something in between. At least that’s my bet. That and the Celtics in 6.”
