Why Isn’t Sports Betting Legal
Last week, football fans across the country committed a crime: they bet on the Super Bowl. Billions of dollars was wagered on the game, almost all of it staked by people who live in states where sports gambling is against the law. Like participating in an N.C.A.A. office pool, betting on the Super Bowl is an all-American pastime. But in most of the country it’s illegal.
New Jersey voters want to change that. In 2011, they overwhelmingly approved an amendment to the state constitution making sports betting legal, and early last year the state legislature passed a law to that effect. Dennis Drazin, the lawyer who advises the Monmouth Park racetrack, announced plans to set up a sports book. There’s just one hitch: the federal government. In 1992, Congress passed a law banning sports betting everywhere in the U.S. except in the four states that already had some form of it (Nevada, Delaware, Oregon, and Montana). Now the four major professional sports leagues, the N.C.A.A., and the Justice Department are suing to prevent New Jersey from going ahead with its plans. Drazin told me that he’d like to be able to offer some kind of betting in time for March Madness. But that can happen only if the judge overturns the 1992 law as an unconstitutional infringement on states’ rights.
The constitutionality of the federal ban on sports gambling may be an open question. But there’s little doubt that permanently, and arbitrarily, dividing the country into “betting states” and “non-betting states” was terrible public policy. “It’s completely irrational,” I. Nelson Rose, an expert on gambling law at Whittier Law School, says. “It’s as if in 1929 Congress had decreed that a dozen states would be allowed to have sound in their movie theatres and all the other states would be able to show only silent films.” That irrationality may reflect the country’s deep ambivalence about gambling. Rose points out that, historically, the U.S. has oscillated between periods of permissiveness toward gambling and periods of crackdown. We’re now in one of those permissive eras, which Rose calls “the Third Wave” of legal gambling. Betting has become ubiquitous, and a major source of revenue for states. Forty-three states and the District of Columbia have lotteries. All the states except Utah and Hawaii have commercial gambling in some form. And more than forty have racetrack betting. But sports betting-which, ironically enough, is much fairer than lotteries or slot machines and involves more skill-allows politicians to express their inner puritan.
Of course, politicians are also responding to the influence of the major professional sports leagues. The leagues insist that legalized betting will make people suspect that games are fixed, thus harming their brands. Yet in Vegas billions are wagered legally on sports every year, apparently without ill effect, and legal sports betting in Great Britain doesn’t seem to dim anyone’s passion for Premier League soccer. Moreover, as Drazin said to me, betting is already an integral part of sports in the U.S.: “If gambling is really hurting the leagues, why does every sports show talk about point spreads and favorites and underdogs? And why does every office in America have a pool on the N.C.A.A. tournament?” Indeed, it’s likely that gambling makes sports more popular, not less. “We know that the debut of ‘Monday Night Football’ really fuelled an explosion in sports betting,” Rose told me. “And that in turn made ‘Monday Night Football’ more popular.” Even the leagues seem to recognize this. They happily condone fantasy sports, which are, in effect, an attempt to predict on-the-field outcomes, and which have become an industry with more than a billion dollars a year in revenue.
The ban on sports betting does exactly what Prohibition did, and we all knew prohibition never works. It makes criminals rich. People still gamble, after all: the National Gambling Impact Study Commission estimates that more than three hundred billion dollars is bet on games annually. Legalized sports betting would bring in significant tax revenues for the states-Drazin estimates that Monmouth Park could take in a billion dollars in bets in its first year-and it would leave cops and prosecutors free to go after crimes with real victims. As for the concern that legalization would encourage shady behavior, the truth is that legal and regulated betting makes it easier, not harder, to spot things like point-shaving. One of the biggest college point-shaving scandals of the past twenty years was uncovered when Vegas bookies noted unusual betting activity on certain games and reported it to the authorities.
Rose says that the 1992 law is “plainly unconstitutional,” and Drazin expresses confidence that it will be overturned. But, even if it’s not, Congress should amend the law, and make it possible for states that want to legalize gambling to do so. As Rose notes, “Gambling has typically been a state issue, not a federal one.” And, while states’ rights has been used as an excuse to justify plenty of bad policies, the idea that certain matters are better handled at the state level remains an important one. Overriding states’ rights and insisting on national legislation makes sense in many circumstances-but not when one state’s decision has no obvious negative effects on other states or on the national economy. There’s an obvious parallel here with the current wrangling between the federal government and states that have legalized marijuana. If New Jerseyans want to be able to place the occasional bet on an N.F.L. game, or Coloradans want to be able to get high, the rest of us should let them. There’s no need to make a federal case out of it.
If New Jerseyans want to be able to place the occasional bet on an N.F.L. game, or Coloradans want to be able to get high, the rest of us should let them. There’s no need to make a federal case out of it.