Legal sports betting in the United States is being called inevitable by some high-profile movers and shakers in the sports and legal worlds. But the timeline and the path to legalization are still uncertain.
The backstory of US sports betting
With New Jersey suffering yet another defeat in its quest to overturn PASPA (the 1992 Professional and Amateur Sports Protection Act) and legalize sports betting, supporters of legalization have headed back to the drawing board.
Make no mistake about it, the fight for New Jersey sports betting will continue, with the possibility of taking the case to the Supreme Court. Legal experts have indicated it’s unlikely SCOTUS will hear the case; if it does, upholding the previous ruling is the most likely outcome.
Other states, most notably New York, have hinted they could bring their own PASPA challenges in the near future. How these potential cases would differ from New Jersey — other than being heard in different federal courts — is unclear. State efforts to legalize sports betting will likely languish in the court system for years, and as New Jersey has discovered, these cases face an uphill battle.
Nothing short of the so-called “nuclear option” (allowing entirely unregulated sports betting) seems likely to survive a PASPA challenge at the state level, which has advocates reassessing where this battle should be fought: at the state or federal level.
The simpler fix is for Congress to repeal or amend the roadblock that is PASPA. This might sound simple in theory, but getting Congress to vote on anything — let alone revisiting a law that would lead to the largest expansion of gambling in the nation’s history — is no small task.
What needs to happen for federal action to occur
To force congressional action three things will need to occur.
Win over the professional sports leagues, or at least have them step aside
For many years, the NCAA and professional sports leagues have staunchly fought against legal sports betting, largely on the grounds that it could undermine the integrity of their games.
The NCAA continues to be completely opposed to legal sports betting, but some professional sports leagues are starting to crack — most notably, the NBA.
In a 2014 op-ed that appeared in The New York Times, NBA Commissioner Adam Silver said the following:
“In light of these domestic and global trends, the laws on sports betting should be changed. Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards.”
Following the Third Circuit’s recent en banc ruling against New Jersey, NBA spokesman Mike Bass repeated Silver’s earlier comments, that legal sports betting needs to occur at the federal level:
“The Third Circuit reaffirmed that the appropriate path to legal sports betting is through Congress. We remain supportive of a federal legislative framework that would protect the integrity of the game and allow those who bet on sports to do so in a legal and safe manner.”
Silver isn’t the only commissioner of a major sports league that is softening on this issue.
In an appearance on ESPN’s Outside the Lines in February 2015, MLB Commissioner Rob Manfred said in part, “Gambling in terms of our society has changed its presence on legalization, and I think it’s important for there to be a conversation between me and the owners about what our institutional position will be.”
In November, Manfred went on the ESPN’s Mike & Mike and said the following:
“What I’ve said about legalized gambling is that the landscape is changing and that baseball, during this offseason, principally will take a look at its relationships with legalized gambling — whether it’s sponsorship, whatever — and re-evaluate given that the country has changed in terms of its approach to legalized gambling.”
In this same vein, each of the four professional sports leagues works with the sports data company Sportradar; the same company also works with bookmakers worldwide.
NHL Commissioner Gary Bettman and NFL Commissioner Roger Goodell have not been as supportive, at least publicly, of legal sports betting.
While efforts to repeal PASPA may not need the leagues’ outright support to be successful, they will need the leagues to at least allow it to happen.
Consensus among the casino industry
In addition to winning over the professional sports leagues, the American Gaming Association and the casino industry will have to lobby hard to get PASPA changed.
The AGA has made legalizing sports betting its top issue of late. It seems like the majority of its members, and the casino and gaming industry as a whole, are on the same page when it comes to sports betting.
One of the key points the AGA has been making — along with sports betting being an untapped market worth billions — is the false notion of sports betting prohibitions ensuring game integrity. Billions are already being wagered illegally, and taking this money out of the shadows and cleansing it with sunlight would improve game integrity.
Essentially, the “integrity” issue is becoming less defensible — if it ever was — as Las Vegas will soon have an NHL team, and the Oakland Raiders could move the storied franchise to Sin City, as well.
For Congress to listen, the AGA and the casino industry will need to present a clear, unified message. Such a lobbying push is slated to begin soon.
Continued pressure from states
Pressure can come from the states in one of two ways.
First, states could take the New Jersey approach and challenge PASPA through the courts. The other option is doing what Pennsylvania has done: writing language into its proposed gambling expansion package that would allow the state to offer legal sports betting if and when federal laws change.
Second, states can continue to legalize online gambling and daily fantasy sports. Both of those activities obviously share traits with sports betting; they could help normalize the idea of legal sports betting, paving the way for congressional action.
The DFS industry’s legislative battles in 2016 allowed New Jersey Congressman Frank Pallone to call for congressional hearings on DFS. At the hearing, Pallone brought up his state’s efforts to legalize sports betting, and noting the hypocrisy of the distinction between DFS and sports betting:
“I must also mention the hypocrisy of those arguing that daily fantasy sports is readily distinguishable from traditional sports betting, while quietly applying for and receiving gambling licenses in the United Kingdom, DFS operators continue to argue to interested states in the U.S. that — unlike sports betting — DFS is not gambling.
“Their reliance on the arbitrary distinction of skill and chance is also unconvincing, especially since both the Department of Justice and the NFL have asserted that sports betting also is a game of skill.”
What would a PASPA amendment look like
If Congress does decide to revisit PASPA (and potentially the Wire Act if the conversation turns to interstate sports betting) a full repeal might be unlikely. PASPA could just be amended.
One possibility is to leave PASPA as is, but give states a second chance at a PASPA exemption. In effect, this would simply reopen the window for a predetermined period of time, and allow states like New Jersey the chance to legalize sports betting.
When PASPA was passed in 1992, the bill authored by New Jersey Senator Bill Bradley grandfathered in four states: Nevada, Delaware, Montana and Oregon. (The latter three were partial exemptions.)
It also threw a bone to Bradley’s home state. PASPA gave any states that had operated licensed casino gaming for the previous 10-year period a one-year window to pass a law legalizing sports betting. The New Jersey legislature declined, and the window was closed on the Garden State.
Alternatively, Congress could leave the window open in perpetuity. PASPA could be rewritten to allow any state with licensed casino gaming (with or without a minimum number of years threshold) to legalize sports betting, but still prohibit it in states without casino industries, thereby ensuring sports betting is overseen by seasoned gaming regulators.