The Future of Sports Betting in America
30 Nov, 2017 by Shaun Lowrie
On Monday, the Supreme Court will begin hearing the oral arguments of New Jersey in their quest to legalize sports betting. Their opponents? Every major sports league in America.
It's a tough matchup, and I won't get into which side will win, but what I do want to talk about in this week's column is the downright ridiculous notion that sports betting is better off illegal than legal, and what the long term situation is likely to be.
Here's my handy, cut out and keep guide to our near future in the world of sports betting. Let me know your thoughts in the comments below.
Sports betting is happening, legal or otherwise
One of the worst elements of PASPA, the act that prevents most residents of the US legally engaging in sports betting, is that it was created in a bygone era and seems wholly inadequate to deal with the prevalence and reality of online betting, which is now done with impunity.
I get the notion that in the 70s and 80s, betting was more problematic than it is today. It certainly wasn't as easily regulated as it is today, with back-street bookies and mafia controlled institutions providing a shadowy underworld that wasn't particularly wholesome for either fans or the sports leagues. The money in sport at the time was simply not at a level that provided an adequate defense against the incentives offered by those who might want to fix a game.
But the world has moved on.
First off, over $150bn was wagered last year on sports, the majority of which was done online, and went to offshore bookies. To all intents and purposes, sports betting is happening and nobody is trying to stop it in any serious manner, except when it intersects with other crimes such as drug dealing or money laundering, neither of which seriously hurt the end-user. You, as a bettor, are in no danger of being prosecuted for 'illegal' betting unless you use a shady bookie rather than going offshore.
Online betting is sanitized, it is simply part of life in every other place in the world, and in case you haven't noticed, it hasn't hindered the growth of the EPL, La Liga or any other European sports leagues. No longer do nefarious interests have a monopoly on the industry, and everyone is better off for it because the scrutiny of today's world largely prevents the outright corruption that has long been cited as a reason to stop betting in the US.
And because betting is happening even today, in your state, regardless of where you live, it is head-in-the-sand stuff to suggest that PASPA has worked. Put simply, making sports betting illegal was just a veneer of legislation that doesn't actually have any impact in practice, now that the means of betting have changed beyond person-to-person interaction.
The professional sports leagues want sports betting to be legal
Wait, that's confusing? After all, they're collectively fighting New Jersey to stop sports betting right?
Wrong. They're fighting New Jersey because they believe that a piecemeal, state-by-state legalization of sports betting is worse than going through Congress to achieve a nationwide, federal position that is aligned with their own interests.
It doesn't help the NFL, MLB, NBA, NHL or NCAA to see sports betting administered in different ways for different fans. They like homogeneous rules that they can tailor their business models around, and that means that for now, they find themselves at odds with Chris Christie and New Jersey, who have spent millions and achieved a considerable victory just to get in front of the SC and be heard.
But for me, the Raiders moving to Las Vegas in two years time was simply confirmation that the NFL knows what is around the corner, and wants to be one of the key sponsors of the legislation that changes the US sports market.
New Jersey is not the only state that will legalize sports betting if they win
There are currently 17 other states waiting to immediately open up their states to sports betting. The benefits are obvious. That $150bn wagered could be taxed, and big businesses will spring up that bring other revenue to states that have legal sports betting.
Again, this is currently happening regardless of whether they want it to, therefore for most states, it will be a simple equation of whether they want to continue allowing sports betting to happen under their noses with no benefit to them, or whether they want a slice of the pie.
The sports leagues and everyone connected with them will be better off with a legal betting industry
Everyone? Yeah, even those who like gambling just a bit too much.
Why? Because it is regulated. Right now, those with gambling problems have nowhere to turn. The offshore bookies are not bound by any law to say, prevent them betting once they reach a limit they set, or to pick up on trends that suggest they may be compulsively betting. These are very real things in the European betting industry, and in Britain, bookmakers are legally obliged not to turn a blind eye to potential problems.
And the sports leagues themselves will win. Andrew Brandt of Sports Illustrated (and former Packers VP) cited a statistic that shows those who engage in sports betting watch on average 40 NFL games per year, while those who don't watch just 16. As he rightly says, this is not a number to be overlooked during a time of great strife for the NFL in terms of viewership.
I have long argued that the NFL and other sports leagues are better when they focus on the outcome of games, rather than fantasy football. I may bet on a game on MNF that has the Texans and Ravens, and that may actually cajole me into watching it too. Conversely, I am unlikely to have an offensive player from either team active in my fantasy leagues, making the game utterly meaningless from that perspective.
What the NFL has done badly in the rise of fantasy football, is convince viewers that the outcome of the real world games matters as much as those of their fantasy teams. Put it this way, once your fantasy season is over (and for more than 50% of us, that will be around this time every year) you need to convince people to stick with the NFL. If you've told them for weeks that the only thing that matters is their fantasy performance, then you'd better believe that's a lot harder to do than if they're interested in who actually wins in reality.
WAIT, THAT'S SPORTS BETTING'S MUSIC!
I have a friend who hates soccer. He doesn't play it, he doesn't watch it, he doesn't have any interest in the outcome, beyond one crucial thing: He will place a small bet on any match he is being forced to watch at a social gathering. I have heard him cheer for teams where he couldn't name a single player, or frankly, say some fairly libelous things about those players or teams who cost him his wager.
The point is, he cares. He's part of the Premier League's business model. The NFL, MLB, NBA and NHL are ignoring this and telling you that the only thing that matters is if <interchangeable running back who will be out of the league in 2 years time> helps you win in fantasy football. It doesn't matter who wins the game. Hell, he might even be playing against the team you are a fan of.
Sports betting is not the solution to all of life's ills. It has issues in terms of how it is regulated in Europe, but I can tell you this: I feel more comfortable with the idea of US legislation being written today, fully aware of those pitfalls, than the way European legislation has evolved to react to the problems.
Do you agree or disagree? I love hearing from our readers on this subject, and whether you get in touch by email, in the comments below, or on twitter, I'll always engage with a good debate on the matter.
Shaun Lowrie is the founder and editor of Pickwatch, a site designed to give you a new perspective on experts in the NFL media by tracking their performance when picking games or predicting draft picks, team performance, or player potential. You can contact him at [email protected] or on twitter at @pickwatch