Can Purdue Really Ban Students And Faculty From Sports Betting?

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Purdue University’s Board of Trustees adopted a new sports wagering policy last week that applies to faculty, staff and non-student athletes. The legality of that policy at a public institution remains an open question.

The news from Purdue that students and employees were banned from betting on Boilermakers’ sporting events follows a similar ban from Pennsylvania’s St. Joseph’s University. That school released an interim policy in late September that banned students from betting on St. Joe’s contests.

There is a key distinction between St. Joe’s ban and Purdue’s ban: Purdue is a public institution; whereas, St. Joe’s is a private institution. Legally, public institutions typically have less leeway dealing with constituents, which may change the analysis of this type of ex-post regulation.

Aside from the obvious question of whether this type of ban is enforceable, there are questions over whether a university can implement this type of regulation.

What Purdue’s new policy says

There have been a number of different takes on whether Purdue and St. Joe’s can ban students and professors from betting, but there are actually several considerations that need to be looked at before reaching even a tentative conclusion.

The press release from Purdue states:

“The policy bans faculty, staff and non-athlete students across the university system from gambling on sporting events involving any Purdue teams, coaches or student-athletes. The policy was developed at the urging of some faculty members, as well as the Department of Intercollegiate Athletics, after sports betting became legal in Indiana earlier this year. The policy applies to wagers placed worldwide and online.”

Punishments for faculty and staff are noted to be up to and including termination. The policy for potential student punishments appears to still be under discussion.

Can Purdue impose this on their professors?

Let’s begin by looking at whether Purdue can punish faculty of staff for betting on Purdue contests.

If Purdue faculty or staff are members of unions, it is possible that this type of regulation would be found to be within the realm of activities to be considered as part of their employees’ “working conditions.”

The negotiation of terms surrounding working conditions are mandatory subjects of collective bargaining. This means that assuming this type of restriction is a part of the working conditions, any unionized workers at Purdue would need to agree to this restriction as part of the collective bargaining process.

Different without the union

For non-unionized workers at Purdue and St. Joe’s, there are real questions as to whether this type of restriction is akin to a new contractual term, which would require a new agreement with faculty and staff. Now, whether a faculty or staff member would be willing to walk away from a job over not being able to bet on (or against) the Hawks or Boilermakers is a very personal question.

Marc Edelman at Forbes has noted that this type of policy can be viewed similarly to university policies that ban sexual relationships between students and faculty, conduct that is otherwise not in violation of any law but nonetheless may give rise to favorable (or unfavorable) treatment that should be discouraged by the university.

What remains uncertain is what happens when this type of policy banning lawful activity comes in midway through a relationship? Are lovers required to end their relationships? Possibly.

What about the Purdue librarian who has gone to Las Vegas every year over Labor Day weekend for the last 25 years to wager $1,000 on a Boilermakers national championship? Is she forced to cancel her trip for next year? Possibly.

Now, depending on the language used in contracts with faculty and staff this type of restriction may be found to fall within a morals clause, which would mean its implementation is far easier and could likely be done without faculty and staff approval.

Can Purdue ban students from betting on games?

Students bet on sports, this we know. It follows logically that students would also likely bet on sports involving the school they attend. The bans from Purdue and St. Joe’s raise questions about schools’ abilities to restrict wholly legal student conduct.

Schools have a long history of punishing off-campus conduct, even minor violations of the law off-campus. For instance, until the 2000s, the University of Virginia’s Honor Committee dealt with discipline for students who passed bad checks off-campus.

But banning students from wagering on sports played by athletes representing the school they attend involves a lawful activity (assuming boxes are checked for age, not on the self-exclusion list, etc.) unlike bouncing a check.

A constitutional right to gamble?

In 1993, the Supreme Court stated in United States v. Edge Broadcasting that gambling does not implicate a constitutionally protected right.

But there are a few qualifiers that could be placed around this decision now. The case, which centered around Virginia-based lottery advertisements being broadcast into North Carolina, a state without a lottery. The federal government alleged this violated federal law; Edge Broadcasting defended, saying that they were protected by the First Amendment’s free-speech protections.

While the Supreme Court upheld the federal law’s restrictions on commercial speech, we are dealing with a very different set of facts.

Firstly, the broadcasts into North Carolina were advertising an activity not legal in the state. In the case of sports betting, the Indiana and Pennsylvania legislatures have legalized sports betting, so there is no purported surrounding illegality.

By contrast, there would be little constitutional issue in arguing that a 17-year-old freshman could be punished for betting on Purdue games. That conduct violates Indiana law, much like if the university punished the student committing an armed robbery off-campus.

Secondly, there was another Supreme Court decision that might be relevant. This one concerning the spending of money on elections by corporations called Citizens United v. Federal Election Commission. The 2010 Supreme Court decision paved the way for corporations to receive First Amendment protections in association with indirect election spending.

It is perhaps not an extreme extension to argue that spending money generally is a form of protected speech or expression, where it is being spent lawfully.

What to make of this

The decision to ban sports betting by students on university sports involving the school at Purdue and St. Joe’s is intriguing and potentially one that operators wish was not in place.

Is there a possibility that students, faculty, and staff could have inside information? Of course. Are there rogue bad actors who might pressure a student for information or hold a bad performance against them, consciously or unconsciously? Sadly, there might be.

But this restriction seems unnecessarily overbroad when the alternative would be to forbid and punish the misuse of inside information or the threats themselves.

We let people who work at Apple own Apple stock. Couldn’t everyone at Apple have access to valuable inside information and the opportunity to misuse it? Yes, of course. But we only punish the misuse of that information, not the possibility that someone has potential access to the information which could be misused.

We have regulated financial markets punishing the misuse of inside information by statute since the 1930s. It seems likely an effort is being made to create unnecessarily burdensome restrictions on wholly legal activity.

Of additional note, it is unclear as to whether daily fantasy sports would be implicated in this ban. While the Indiana daily fantasy law signed by then-Gov. Mike Pence banned college sports games, those games could still be accessed by Purdue students outside of the state.