Opinion: Banning In-State College Betting Is Pointless And Performative

Written By John Holden on August 22, 2022 - Last Updated on August 23, 2022
college betting

If you like college sports betting but live in a state without legal sports betting and still want to wager, that probably means you have to do so in an unregulated market.

The unregulated market might be a guy down the street or someone running a book offshore. One thing we know about bettors is that even if sports betting is not legal in a state, it is still happening. People will find a way to bet — they always have.

The fact that people will find a way to bet on the sports that they want to bet on makes decisions like that of Massachusetts to exclude wagering on in-state college teams from regulated markets in the name of integrity all the more preposterous.

You’re not stopping college betting

Despite the fact that restricting college betting on certain teams almost certainly does not eliminate the wagers (it just pushes them into other markets,) states continue to line up to exclude wagering on in-state teams.

The decision to exclude wagering on in-state teams is nothing short of bad policy. In the worst-case scenario, it forces bettors to wager in unregulated markets.

In a slightly less bad scenario, it forces bettors into neighboring states sending money out of state. Neither does anything to improve the integrity of sporting events.

Why is this still happening?

The simple answer is, no one is listening to me.

But the decision to exempt in-state teams dates back to Nevada. Back while PASPA was still in force, it did not allow wagering on in-state teams for a while.

It was not until college sports betting caught the eye of the “Maverick” John McCain that Nevada realized it was a bad look to claim that wagering on college sports in regulated markets was not an integrity threat while saying that betting on the UNLV Rebels and Nevada Wolf Pack had to continue only in the shadows. In 2001, Nevada changed its tune and allowed wagering on in-state teams just like it had taken bets on colleges from every other state.

Jersey sure, but wrong

While Nevada changed its tune, New Jersey legislators planned to exclude wagering on in-state teams from the get-go. Indeed, it was one of the hypocrisies of the litigation and something that the plaintiffs’ lawyers, representing the NCAA, possibly should have attacked with greater ferocity.

Presented with a new opportunity to allow betting on Princeton, Rutgers, or March Madness darling St. Peter’s, once again New Jersey elected not to allow the practice, this time the voters.

Integrity, shmntegrity

While there are certainly justifiable public policy reasons for not allowing wagering on certain events (things where someone might know the outcome, like the NBA Draft Lottery or professional wrestling,) we also probably do not want betting associated with events principally participated in by minors.

So while betting on the Little League World Series is probably not something that we should see in the regulated market even if some unregulated markets allow it, it is a different story when we already allow betting on competitions in the same sport, in the same league, just only on teams from out of state.

If it is not an integrity threat to bet on Rutgers in Philadelphia, then it is no more an integrity threat to be able to bet on Rutgers in Camden or anywhere else in the Garden State. Unfortunately, a lot of the collegiate representatives who have lobbied hard for these exceptions are actually hurting the underlying integrity of the games.

Regulated markets work

For several decades, the first line of defense against manipulation of sporting events was Nevada sportsbooks. It was Nevada sportsbooks who uncovered the Tulane point-shaving scandal, the Arizona State point-shaving episode, and the Toledo point-shaving scandals involving the men’s basketball and football teams. In all these situations, unusual activity was detected and the proper authorities were alerted.

In contrast, if you look at how NBA referee Tim Donaghy‘s improper betting was detected or how the Boston College scandal unfolded, both of those were effectively found fortuitously because of where the bets were being placed.

The regulated market works because sportsbooks in the regulated market have interests that align with the sports leagues in terms of integrity. For all the fancy algorithms that are out there, it is still the sportsbooks themselves that serve as a primary means of defense.

Algorithms cannot replace human intelligence. But human intelligence is only useful if it is allowed to exist.

Will in-state college betting bans stop?

It is unclear if states will stop this nonsensical practice. Massachusetts has banned betting on in-state teams, and though North Carolina failed to pass a bill expanding sports gambling in the state, efforts included a ban on wagering on in-state teams.

If legislators want to protect collegiate athletes, they should be working to ensure that some of the tax money that comes in is being used to educate college athletes, and provide services to college athletes and others that may suffer from problem gambling tendencies. The solution is not to confine the wagering to an unregulated market.

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John Holden

John Holden J.D. / Ph.D. is an academic. His research focuses on policy issues surrounding sports corruption.

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