Betting On Sports

The Supreme Court made a lot of important rulings earlier this year.  One ruling that got a bit lost in the shuffle may end up having an important impact on states across the country, colleges that play big-time sports, and professional sports franchises, too.

300px-eight_men_bannedIn May, the Supreme Court struck down a federal law that effectively banned gambling on sports, with some exceptions, in all states but Nevada.  The federal law, called the Professional and Amateur Sports Protection Act, was based on concern that allowing widespread gambling might undercut sports as a form of wholesome entertainment.  Nevada, which already permitted gambling on sports, was allowed to continue, but other states were largely barred from doing so.  New Jersey passed a state law allowing gambling on sports and then challenged the federal law, and the Supreme Court sided with New Jersey, ruling  that while Congress has the power to regulate sports betting at the federal level, it can’t dictate to states what their individual laws must be.

Why did New Jersey decide to challenge the federal law?  Do you really need to ask?  Of course, the answer is money.  New Jersey’s casinos were struggling, and it objected to Nevada having a federally sanctioned monopoly on sports gambling.  If sports gambling were allowed in its casinos, New Jersey reasoned, it might promote tourism and increase tax revenues.  And these days, states are all about increasing their revenues.

With the Supreme Court ruling, Ohio legislators are now looking at whether Ohio, too, should legalize gambling on sports.  One argument made in favor is that many Ohioans already bet on sports through the underground economy — so why not take the activity above ground and get some tax revenue from it?  But the existence of the illicit sports betting also poses a challenge, because states that want to legalize the activity in order to earn revenue have to figure out how to make legal gambling as easy and attractive as calling the local bookie.  One issue for legislators to consider, for example, is whether Ohio should allow on-line gambling, so long as the website has some Ohio presence and the state gets a cut of the action.  Or, should such betting be limited to licensed casinos?

And colleges, universities, and professional sports leagues are holding their breath, too.  They opposed New Jersey’s effort to overturn the federal law, because confining legal sports gambling to Las Vegas kept it separate and apart from 99.9 percent of campuses, stadiums, and sports arenas.  Now legalized gambling on sports will be out in the open, and there are concerns that gamblers hoping to get an edge might bribe professional and amateur athletes to throw a game or do something to affect the point spread.

College sports administrators and professional sports leagues are worried about another Black Sox scandal — who can blame them?  After all, it’s been 100 years, and the 1919 American League champions from Chicago are still called the Black Sox.

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