Opinion: Where US Sports Betting Stands Three Years After The Fall Of PASPA

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US sports betting

Monday, May 14, 2018, was probably the biggest date for sports betting in the United States in the last 100 years.

The 2018 Supreme Court calendar had a number of high profile cases to decide. They touched on major social issues like Masterpiece Cakeshop. They addressed important commercial issues like the internet sales tax case, South Dakota v. Wayfair.

But for the readers of this site, it is likely that no Supreme Court case was bigger that year than the decision in Murphy v. NCAA.

The end of a long fight

The Supreme Court ruling that the federal government could not dictate to states which laws they had to keep on the books sparked the end of a legal battle that officially began toward the end of 2011. The only win the state of New Jersey had was the only one that mattered in the end.

In the three years since that May morning, a lot has changed. There has been a lot of good, some bad, and still a lot of questions about what is to come.

Unrealized fears

For decades, the major American leagues argued that legalized sports betting would harm sports. It was the reason that the NCAA and the four largest sports leagues in the country sued Governor Chris Christie and the other defendants in the New Jersey case.

The quintet of sports organizations argued they would suffer irreparable harm if US sports betting were to be legalized. Many of the same arguments were made to support the passage of PASPA back during the 1990 and 1991 congressional hearings. There was also the fear of a raging epidemic of gambling among children.

Three years on, and the four major sports leagues all have mated with the gambling industry. The leagues now have found what academic research had long noted: sports bettors are among their most engaged consumers. They watch more sports than people who have not created an interest in the contest.

By and large, the rollout of sports betting has been a positive for the sports leagues. While the NCAA remains reluctant to embrace sports betting, individual colleges have seen an opportunity to make new friends and patch some budget holes without having to raise tuition or fees.

Efforts for uniformity

One of the most interesting factors of the expansion of sports betting is the desire of states to go it alone, meaning that every state has effectively passed its own unique sports betting laws. Normally when a subject is as hot as sports betting, we see model laws or even the Uniform Law Commission put out legislation.

While there are similarities and some stakeholders have tried to distribute model legislation, states have largely done their own homework, for better or for worse.

Of course, some of this is the result of the differing gaming landscapes across the country, but there has seemed to be little interest in a collective approach.

The absence of a collective approach to regulating sports betting is not for lack of want, at least from the perspective of some of the sports leagues, who have occasionally pushed Congress to pass legislation with favorable provisions. Federal legislation has, so far, gone nowhere.

A slowdown to come?

The expansion of sports betting seems like it is due for a slowdown. The rapid expansion seems to have exceeded even the most bullish expectations, but one factor lending support to a slowdown is the fact that many remaining states face substantial obstacles.

While a deal in Florida between the state and the Seminole Tribe shocked the gaming world, there are a number of questions that linger about the new deal. That could spell trouble for hoped expansion in states like California, or for mobile betting in Oklahoma.

Is the money real?

Another fact that has come to the sports betting world quickly is that it paid to be known to consumers. FanDuel and DraftKings used their daily fantasy platforms as a quick launching pad to sports betting recognition.

The head start with consumers has proved beneficial with both other established brands and upstarts lagging behind.

While the Barstool brand has emerged as a new kid on the block (taking over for Penn National,) worth watching is the question of just how many brands will survive. With states like Ohio proposing upward of 40 licenses be available, the question is where is the money going to come from to support these 30-35 other brands.

Sports betting did roughly $1.5 billion in revenue in 2020, according to the American Gaming Association. As giants like DraftKings are still not turning a profit, the question is how many competitors can the market support.

Problem gambling

There have been growing concerns in the UK about mounting problem gambling incidences. With many states seeming to neglect proper funding for problem gambling treatment from newly passed sports betting legislation, it seems that without change, much of the regulated sports betting market could be headed on a collision course.

One of the benefits of the regulated market was that it was supposed to shine a light and enable resources for the treatment of problem gambling; to date, this has not been sufficiently realized.

More to come

In the coming years, we will likely see upward of 40 states with sports betting in some form. The speed of the expansion has been truly remarkable, but there remains work to be done.

There is a need to provide greater protections to those people with gambling addictions, as well as a need to modernize protections around match-fixing and pass legislation that promotes rapid response to threats instead of siloing information.