American Gaming Association Still Predicts Regulated Sports Betting In Four Years
Legal Sports Report

NBA Supports Sports Betting Regulation, But Will Continue To Refrain From Direct Legislative Lobbying

NBA sports betting

Sports betting will be broadly legalized in the US in approximately four years and one of its highest profile proponents, the National Basketball Association, will continue to call for a regulatory framework for wagering, American Gaming Association president and CEO Geoff Freeman said Wednesday.

Those calls, however, will likely continue to stop short of direct legislative lobbying.

NBA spokesman Michael Bass told Gambling Compliance that while his league maintained its position in favor of a law regulating sports betting, it was not going to become more aggressive in directly advocating for such a law.

Freeman told those assembled that he met personally last month in New York with NBA commissioner Adam Silver, who he referred to as a “partner” in the effort to establish a legal sports betting framework in the US.

Bass characterized the meeting as “informational only.” His remarks followed Freeman’s, which came at a gaming event in Mississippi.

NBA a partner on sports betting, in words

The comments indicate sports betting proponents might need to lean on someone other than their most high-profile champion to spearhead the literal action of amending or repealing the Professional and Amateur Sports Protection Act, the 1992 federal framework outlawing all forms of sports betting in all but four states.

They also create a delicate distinction between the NBA speaking publicly about the need for updated federal legislation and not advocating for it with federal lawmakers.

It’s unclear exactly how the NBA would support whichever legislator, independent group or other actor that chose to take up the sports betting mantle in Washington, D.C.

In late 2015, Silver told FiveThirtyEight that legal sports betting made sense from a financial perspective.

“One of the reasons I’ve been pushing to legalize sports betting is not because that I’m necessarily an advocate of sports betting, it’s because all the research shows that it’s a multi-hundred-billion dollar business just in the United States right now,” Silver said.

But Silver has also been clear on the NBA’s role on the ground for such efforts. “I’m not going down to Washington, D.C., to lobby, which ultimately will be what’s necessary, meaning there needs to be a change in federal law if we’re going to have widespread legalized betting in this country,” he said in March of 2015.

The long honeymoon for the NBA

Of the four professional American sports leagues — each of which have traditionally opposed sports betting—Silver and the NBA have been by far the biggest proponents of a legal sports betting framework.

Silver wrote an op-ed in The New York Times in November 2014 calling for a legal sports betting framework in the US. The op-ed was so seismic that it is still referenced by sports betting proponents 21 months later, despite the association’s outspoken words not yielding any federal or legislative action.

Silver’s stance also clashed with his league’s longstanding opposition to the state of New Jersey’s interminable quest to offer legal sports betting.

Instead of attempting to affirmatively authorize sports betting, the state wishes to repeal its ban on sports wagering. The result would likely lead to de facto legal New Jersey sports betting. Its attorneys have argued that PASPA is unconstitutional.

A decision by a Third Circuit Court of Appeals en banc panel in the case, which pits the four leagues and the NCAA against New Jersey, is expected soon. 

Who leads the charge for sports betting?

Freeman appeared to signify that change in sports betting’s legality will come by way of eliminating its main federal barrier, PASPA.

On Twitter Wednesday, he predicted the law would be fully repealed, and he told Gambling Compliance the “antiquated” law has “failed miserably.”

Silver has said that wagering only becomes “bad news” for his league when it thrives in the underground. The AGA estimates that sports bettors wagered $145 billion illegally in 2015, compared to the $4.2 billion wagered legally in Nevada in that same time span. The first half of 2016 saw several high-profile busts of illegal sports betting rings.

But without the direct lobbying support of the leagues or the NCAA, five of the parties that can bring action via PASPA against sports betting, the question remains: Who will lead the charge to amend or repeal the federal ban, and bring sports betting back into the light?

The AGA itself is in the process of establishing a coalition of stakeholders to push Congress for an emendation or repeal of PASPA. The effort is set to begin early next year.

Congress, however, might not be particularly inclined to act.

A recent hearing on daily fantasy sports conducted by a House Energy & Commerce subcommittee didn’t just presage further federal inaction.

It was an unequivocal bust, drawing widespread criticism throughout the sports gambling industry when lawmakers appeared clueless as to the most basic characteristics of the industry.

Another way forward: PASPA

A congressional cutting down of PASPA might be the most straightforward way of achieving widespread sports betting in the US. But it is likely not the only way.

Silver noted in his FiveThirtyEight interview that a patchwork of state laws addressing sports betting individually would be less preferable than a wider-ranging, simpler federal framework.

His predecessor, David Stern, said the same thing in regards to DFS, prior to that industry’s early 2016 legislative blitz that saw laws enacted in seven states this year.

And yet, such an outcome in the face of a recalcitrant or disinterested Congress is at least plausible.

As a handful of states consider legalizing various forms of gaming, attorney Daniel Wallach said that more states could become restless, and file lawsuits challenging PASPA similarly to New Jersey. 

Wallach said that these types of challenges from states could eventually prompt a judicial repeal of PASPA, as opposed to a legislative repeal.

Freeman noted Wednesday that if the federal government “got out of the way” in regards to PASPA, states like Mississippi could decide for themselves whether or not they wished to offer sports betting.

He also noted that other professional sports leagues, such as the NHL and the NFL, are moving closer to the NBA’s position on sports betting, although no professional sports league has yet changed its official policy on single-game wagering, or removed themselves as parties in the New Jersey case.

More questions than answers on sports betting

If such an effort were eventually successful, other federal laws could still pose distinct challenges to legal wagering.

The Wire Act, for instance, prohibits the transfer of wagering information across state lines, and could potentially result in a uniform “federal” framework still needing to be operated on a state-by-state basis.

The Illegal Gambling Business Act, meanwhile, declares any operator of a gambling business that involves at least five employees, takes in at least $2,000 in daily revenue, and violates state wagering law, guilty of a federal crime.

Even the face of a federal sports betting framework, the act could open up susceptibility to operators conducting wagering that is still illegal under yet-unamended state laws.

Citing indirect evidence of the NHL’s development of a lucrative Las Vegas franchise, some have implied that the eventuality of federally allowed sports wagering is a certainty, a matter of “when” and not “if.”

That may yet be the case. But at this stage, there remain more questions than answers about how, or when, such a result will come to pass.

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Will Green
- Will formerly worked as a writer and producer at Sports Illustrated, where he covered the sports gambling and daily fantasy sports industries, and moderated several panels with industry experts on the future of gaming in America. He is now a contributor at SI, as well as Fortune.com, Legal Sports Report, and many other destinations. His weaknesses are wine, coffee and college football.