On Monday, the Supreme Court struck down a 1992 federal law and in the process paved the wayfor states across the country to legalize sports betting. The end of the Professional and Amateur Sports Protection Act (PASPA) could fundamentally change how Americans interact with the sports they love. It will be great news for some and bad news for others.
Winner: The gaming industry
The American Gaming Association, the main lobbying group for the country’s casinos, has been pushing for legalized sports gambling for years. Casinos stand to make a lot of money once states across the country start making sports betting legal. There’s a ton we still don’t know about what legal sports betting will look like, including which states will offer it and how much of it will be online. But it’s a good bet that brick-and-mortar casinos will be among the first places allowed to offer it. They stand to make lots of money.
“I think it’s gonna be interesting,” says Richard McGowan, a Boston College management professor who has written six books about the gambling business. “I think most states originally are gonna say, ‘Alright, we’re just gonna allow at the casinos.’ And then they’ll do it a little bit online, and then there’ll be all kinds of different ways of doing it, so we’ll see.”
Loser: The big sports leagues
The NCAA was officially the other party in the case New Jersey brought to the Supreme Court. The NFL, NHL, NBA, and MLB had all sided with the NCAA. The leagues have maintained for ages that sports betting poses a threat to the integrity of their games. They have never been fans of outside groups — like casinos and offshore bookmakers — making money off their sports without giving the leagues a cut.
Winner: Also the big sports leagues
Whatever moral or integrity case the leagues had against sports gambling might fade to the background quickly, because they’re positioned to make lots of money on it. That money could come from different sources. The leagues are likely to push Congress and/or states to impose what’s commonly called an “integrity fee,” basically a tax on sports bets that sportsbooks would pay to the leagues for hosting bets on their sports.
Even if the leagues don’t get an integrity fee built into state or federal legislation, there are a million potential revenue streams. Legal sports gambling would create a lucrative advertising market for leagues, where betting operators pay them for public exposure.
In the right legal environment, leagues could attach betting software to their online offerings, like baseball’s MLB.tv or football’s NFL Game Pass. There might also be licensing revenue for leagues to make from sportsbooks. There are plenty of cash-grab opportunities.
Winner: Sports media outlets
Including SB Nation. When people have money on sporting events, they’re more likely to watch them and look up information about them. Legal sports betting should lead to more people risking money on games, which should drive up TV ratings and story clicks.
Like the leagues, media companies are free to hunt other lines of business that might come with sports betting’s legalization. That could include starting their own betting apps in places that allow it and writing more about gambling news, to name a few ideas.
Loser: Las Vegas, at least a little bit
Vegas has been the hub for legal American sports betting for decades, much more than the other three states that had varying forms of legal sports betting after PASPA passed in 1992. It will hurt Nevada casinos and sportsbooks when other states open their borders to legal sports gambling, according to basic supply-and-demand principles. On the other hand, Vegas has survived the expansion of casinos in other states. Maybe its gaming industry will adjust again and avoid losing too much revenue to outside sports betting.
Winner: New Jersey
Speaking of other states getting sports gambling: New Jersey is going to have it soon. Voters in the Garden State decided in a 2011 referendum that they wanted sports betting to bolster struggling casinos in Atlantic City. Federal courts had blocked the state from implementing its voters’ will, arguing that PASPA prohibited Jersey from legalizing sports betting. It’ll be in local casinos soon. Both Chris Christie and his Democratic successor as governor, Phil Murphy, have hailed the court’s decision as a huge win for their state.
Loser: Offshore and black-market sportsbooks
The spread of legal sports betting will not kill the black market. Under-the-table bookies still have one big advantages legal casinos don’t: They can offer credit to bettors and not require bets to be paid and settled up front. Does that encourage people to take on terrible gambling debts that can ruin their lives? Yes. But it’s a boon to illegal bookmakers, and they’ll still be able to capitalize on people’s addictions in this new climate.
But illegal sportsbooks will still lose some business, as will offshore operations based in Latvia, Costa Rica, or wherever. Just as there are still illegal cigarettes and illegal marijuana in places where cigarettes and weed are legal, there will still be illegal sports betting. But there will be less of it where people are allowed to participate without any legal risk.
Winner: Sports’ integrity
Legal sportsbooks can tell leagues when a weird, inexplicable betting trend starts right before a game. Illegal sportsbooks can’t. The leagues might be the ones getting a fee, but bringing more sports betting into the light should limit opportunities for cheating.
Loser: Federal power
Winner: States’ rights advocates
At its core, New Jersey’s case wasn’t about sports betting. It was about states’ and the federal government’s regulatory authority. New Jersey argued (and a majority of the Supreme Court justices agreed) that by banning states from legislating an issue Congress hadn’t, the federal government was “commandeering” New Jersey’s state regulatory power.
That explains in some part why the solicitor general for the administration of President Donald Trump — a former casino operator who almost certainly has no moral objections to gambling — filed a brief with the court in support of the sports leagues. This ruling invalidated PASPA and effectively told Congress to figure out something new if it cares about sports betting. As Samuel Alito wrote for the court’s majority:
Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA “regulate[s] state governments’ regulation” of their citizens.” ... The Constitution gives Congress no such power.
This decision could easily impact other walks of American life. It was about a lot more than whether you can walk up to a window in Indiana and bet on a Pacers game.
https://www.sbnation.com/2018/5/15/17353228/sports-betting-legalized-supreme-court