States are lining up at the chance to allow sports gambling, wagering that the Supreme Court will overturn a law that effectively banned betting on sporting events for more than 25 years.
At least 18 states are in various stages of passing legislation that would allow people to gamble on sporting events, hungry for the chance to bring in revenue through taxing and regulating it. The bills aren’t uniform: They vary on the excise tax amount, or whether betting can occur at a casino, racetrack, or online. Some of the bills specify that a law would become active pending a Supreme Court decision. States are hoping sports gambling will bring in money, and even sports leagues are lobbying for a share.
Legal observers say the Supreme Court is likely to overturn the Professional and Amateur Sports Protection Act, the federal law that prohibits states except Nevada from allowing sports betting. The pending case, Christie v. NCAA, was brought by former New Jersey Gov. Chris Christie, who argued that the law was unconstitutional because it violated the 10th Amendment on states’ rights.
New Jersey wants to allow sports betting at its casinos and racetracks. It also has prepared a “nuclear option” that would repeal all state laws against betting if the Supreme Court does not rule in its favor. Connecticut, Delaware, New York, Pennsylvania, and Mississippi have enacted legislation with the expectation that the limits on sports betting will be overturned.
Now, even more states are looking at the option. Their goal is the same: State lawmakers hope that legalizing and regulating sports betting will result in more revenue and bolster job opportunities. In Massachusetts, the estimated value to state coffers is as much as $61 million; in New York, an estimated $225 million; and in Connecticut, up to $80 million.
Nevada had already legalized sports betting before the law was passed in 1992, so the state was grandfathered in, as were more narrow operations in Oregon, Delaware, and Montana.
States that want to join their ranks are seizing on information that sports betting is already widely practiced, albeit illegally. The public spends an estimated $150 billion a year illegally betting on sporting events, according to the American Gaming Association.
Indiana state Rep. Alan Morrison, a Republican, who introduced a sports betting bill in his state, says if his legislation becomes law, it would “bring people out of the shadows and bring sports wagering into the mainstream.”
“We won’t capture all of the money that’s in that play, but we want to set up a structure that people will want to wager on sports,” he said.
The Indiana bill contains a provision that some professional sports leagues want to see replicated across the country. Sports leagues are plaintiffs in the New Jersey case, but several of them, including the National Basketball Association and Major League Baseball, are supporting the passage of sports gambling legislation as long as states include an “integrity fee.”
The fee would be a 1 percent tax on total bet amounts, which they say would go toward ensuring the integrity of sporting events, such as making sure referees aren’t intentionally making calls for betting purposes or that players don’t throw the game. The money would pay to oversee bets, investigations, and consumer education, the leagues say.
The NBA also has indicated it believes it should be allowed to secure some of the new funding. “Without our games and fans, there could be no sports betting,” NBA general counsel Dan Spillane said in remarks before a New York committee.
In West Virginia, the MLB asked Republican Gov. Jim Justice to veto the state’s bill without the inclusion of the fees and is pushing to have them added in more states. MLB Commissioner Rob Manfred said the league supports sports betting as long as as it “creates a framework that protects the integrity, recognizes the variety of interests at play here, and quite frankly puts the state in a position to maximize the revenue return from it.”
Morrison noted his Indiana bill might change, but said he believed the integrity fees would serve an important purpose.
“It is important that we have some sort of a check and balance to make sure that any wagering on our sports is being done above board and legally,” he said.
The American Gaming Association, however, opposes the integrity fee, saying it could cause more illegal gambling to thrive as it causes sportsbooks to lose money. On average, sportsbooks keep about 5 percent of the total amount wagered after taxes and winnings have been dispensed, according to the association.
Geoff Freeman, president and CEO of the American Gaming Association, said in a statement that he was pleased the NBA was becoming engaged but that the fee would result in “transferring money from bettors to multi-billion sports leagues.”
“Their proposal would replace a failed federal law with bad state policy – robbing law enforcement, regulators, and state taxpayers of additional resources,” Freeman said.
Connecticut state Rep. Joe Verrengia, a Democrat, echoed similar sentiments when presented with the possibility of the fee in his state. He said he would want to make sure that it went toward vetting integrity of sporting events.
“What I’m not for, quite frankly, is legislation that in some way, shape or form would line the pockets of, whether it’s Major League Baseball or NBA, or any other major league sports’ owners,” he said, according to the Connecticut Mirror.
