Legalized Sports Betting – The Time Has Come

If you have been a reader here for more than a month or so, you surely realize that I am a proponent of legalized betting on all sporting events. My advocacy on this issue is based on two realities:

1. Having sports betting in an “illegal status” does not mean that it does not happen – as I will try to demonstrate later in this rant.

2. Legalizing it – and regulating it – will create a new source of tax revenue for governments at various levels of our society. These new tax revenues would not be imposed on anyone against their will; people who do not bet on baseball or football games would not be paying any of the new taxes that would flow to the coffers of governments. It would be a consumption tax.

I would like to welcome a former opponent of sports betting to my side of the aisle. David Stern – as the NBA Commissioner – did not think that betting on NBA games was a good idea and surely did not embrace the good folks in Las Vegas who set lines on all of his games. However, he recently spoke to a convocation called the Global Gaming Expo held in Las Vegas where he addressed the benefits of legalized sports betting and – more importantly – how legalized sports betting would ultimately become a protector of the integrity of the games themselves.

Mr. Former Commissioner, welcome aboard the Wagering Wagon…

In his remarks, Stern said, inter alia:

“The belief that gambling will lead to bad things is an outdated notion.”

And ,,,

“Let’s not talk about the ‘evils’ of gambling when it comes to sports. The industry has come to accept that a properly run gaming association will be protective toward sports.”

The Global Gaming Expo is an event sponsored by and hosted by the American Gaming Association (AGA). This is a trade organization; it is made up of people and entities directly involved in the casino industry; it cannot possibly be seen as a neutral observer when it comes to opinions and positions with regard to gambling issues. Nevertheless, it is not a criminal entity either; it does not exist to destroy the fabric of Western Civilization. In early September of this year, the AGA released a report that had the following estimate in it:

For the second year in a row, betting on football games (NCAA games and NFL games combined) Americans would wager something slightly north of $90 billion dollars. That is billion with a “b”.

The legalized sports betting industry would handle about $2B this year and the rest of the betting would be done illegally. Approximately 97% of all that money wagered only on football games this year will happen in an underground economy that is illegal, unregulated and untaxed. So much for the idea that passing a law to make gambling illegal will stamp it out…

I have said before and I will repeat it here. The various pieces of legislation at the Federal, State and Local levels that make sports betting illegal should be called the Local Bookies’ Full Employment Acts.

I am sure that someone else can point to another study where the amount of illegal wagering is not nearly as high as what the AGA has put out there. However, if you read a study that says it is only a trivial amount of money or that this entire issue is under control by the authorities, you can surely dismiss that report as fanciful – even if that is your fondest desire.

I recall reading a report about a year ago that said that the FBI estimated that almost $4B had been wagered illegally on the Super Bowl that year. Like the AGA, you might argue that the FBI might inflate that figure a tad to justify some sort of budget submission to the Congress. On the other hand, they would not have a figure to inflate if in fact the “problem” of sports betting was under control…

One of the major Impediments with regard to legalizing, regulating and taxing sports betting is Federal legislation that does not allow States to decide individually if they want to allow sports betting or not. In plenty of States, it is currently illegal to bet on the Jets +3.5 points against the Patriots but it is not only legal people are encouraged to play the State run lottery games. That fact alone denies a moral stance against sports betting. The most offending Federal legislation here is something known as PASPA – the Professional and Amateur Sports Protection Act of 1992. While well-intentioned, this needs to be repealed and then replaced with something far more rational. PASPA demonstrates clearly the kernel of truth in the old aphorism:

The road to Hell is paved with good intentions.

The State of New Jersey has – so far unsuccessfully – tried to initiate sports betting there. The US Conference of Mayors has joined with the AGA in calling for a “national discussion” to change the ways that sports betting is regulated. Legislators in Pennsylvania have passed a resolution calling on the US Congress to repeal PASPA. I mention these actions here not because they have changed the way things are but to demonstrate that I am not alone in thinking that the time has come for a major change here.

Finally, since all of this is about legalizing a form of gambling, let me close with a comment from Greg Cote in the Miami Herald related to another form of gambling that has been legalized:

“World Series of Poker final table getting close, the annual popular gathering spot for egomaniacs wearing sunglasses indoors.”

But don’t get me wrong, I love sports………